Dispute Resolution in Qatar
"Mediation is one of the most effective tools of nonviolence. It can turn parties away from conflict, towards compromise." - Miroslav Lajcak
Qatar adopts a legal system based on the civil-law legal system, substantively and procedurally harmonized with Islamic law. Islamic Sharia is the source of law and a fundamental part of the legal and legislative culture, the essential source of law in commercial matters is the codified regulations, as established and published in the Official Gazette. Primarily, commercial matters are governed by the Commercial Code and the Civil Code, and secondary power to customary practices with Sharia principles in the absence of provisions in the codes. Model laws in commercial matters have been adopted from UNCITRAL model laws such as e-commerce law, arbitration law, and mediation law.
Categories of dispute resolution
Litigation is a process where the dispute is brought to the courts. A judge on the basis of evidence will decide and pass a verdict regarding the case. The involved parties can defend their rights with the assistance of a dispute lawyer. This is proven as a conclusive method for settling a disagreement between two parties. The dispute can be between individuals or companies.
Arbitration is a process where an arbitrator settles a dispute. A decision is not final until both parties agree. A third party is called an arbitrator who acts as a judge. The duty of an arbitrator is to analyze the arguments of each party with the evidence in their defense and also the arbitrator has to bring both parties to a mutual and conclusive agreement. The arbitrator should be guaranteed that the personal issues of the parties will be kept confidential.
Trends and developments
Compliance matters have turned into the pattern among companies in Qatar, especially because of the increased awareness of the risks of money laundering. The legislature has updated some anti-money laundering regulations and imposed specific obligations on companies, as well as their boards and managers, such as those imposed under the Decision of the Minister of Commerce and Industry No. 2 of 2022 on Fulfilling the Requirements for Combatting Money Laundering and Financing of Terrorism connected with the Commercial Companies. Clients are looking for legal guidance under the compliance requirements connected with corporate law. There have been a few disputes under the disciplinary councils and courts connected with the violations of the requirements of combatting money laundering/tax evasion.
In 2021, a few commercial legislations were issued. The significant of which was Law No. 21 of 2021 on Investment and Commerce Court Law. This will be the first commercial court. Usually, all commercial disputes are heard before the civil court. The Investment and Commerce Court has to be set up in all three levels of litigation. The clients should anticipate a superior quality of judgments and a level of specialization in the performance of judges. The new law managed the Investment and Commerce Court’s system with unique provisions, to shorten the length of proceedings and overcome the existing procedural challenges.
Moreover, a new Qatar Mediation Law, Law No. 20 of 2021 on Issuance of Mediation law for Settlement of Civil and Commercial Disputes. The Decree on Ratification Singapore Convention was the issuance of Qatar Mediation Law, Decree No. 79 of 2020 for rectifying the United Nations Convention. By this Decree, the Singapore Convention was ratified and granted the power of law in Qatar. The Singapore Convention covers the requirements for implementing and recognizing international settlement agreements. Clients might consider mediation as a pre-arbitration in Qatar.
Furthermore, Law No. 14 of 2021 for Amending Some Provisions of Qatar Financial Centre Law broadened the scope of jurisdiction of the Civil and Commercial Court of the Qatar Financial Centre. Before this update, the jurisdiction was limited over the Civil and Commercial Court of the Qatar Financial Centre. The scope of jurisdiction is extended as per the new laws. Law No. 15 of 2021 amends certain Provisions of Law No. 34 of 2005 regarding Free Zones, in the jurisdiction of the Civil and Commercial Court of the Qatar Financial Centre. All civil and commercial disputes between companies enlisted in the Free Zones, between the Authority, individuals, and companies enlisted with the Free Zones whatever the nature of the legal relationship might be except if the parties consent to resolve the dispute through alternative mechanisms.
Law No. 8 of 2021 for the Amendment of Some Provisions of the Commercial Companies Law Promulgated by Law No. 11 of 2015, was given. The amendments included legal provisions related mainly to combatting conflict of interest and enhancing transparency and administration.
Furthermore, the amendments changed some rules connected with holding companies and shareholders’ privileges with regard to the context of liability claims of boards of directors. For compliance purposes Clients are supposed to carefully consider the new amendments to the Commercial Companies Law.
The courts are transitioning into a different system after the issuance of the Law on Establishment of the Investment and Commerce Court. The new amendments became a challenge for clients to tolerate the uncertainty of judicial in this transitional phase. The new law has a number of provisions for reducing the length of proceedings, and unnecessary adjournments.
The process of negotiations to resolve disputes in a peaceful manner is called dispute resolution. Recently, Law No. 21 of 2021 on Issuance of the Law for Establishment of Investment and Commerce Court was passed establishing the first specialized commercial court in Qatar. The commercial matters which will fall within the sole jurisdiction of the Investment and Commerce Court are Disputes related to commercial contracts, Cases arising between traders in their commercial activities, Disputes between partners or shareholders in commercial companies, Disputes related to commercial assets, investing in foreign capital in economic activities, maritime sales, banking transactions, commercial papers, insurance companies, and investment and financing companies, bankruptcy and preventive reconciliation in the context of bankruptcy, patent, trademarks, industrial designs, commercial secrets and other intellectual properties rights, protecting fair competition, preventing monopolizing practices and combatting practices that harm national products in international trading, e-commerce and e-transactions and contracts of partnership between public and private sectors.