Oil prices are driving arbitration cases in Qatar

Qatar's construction sector is seeing more commercial cases seeking arbitration in the shadow of fluctuation oil prices

An increasing number of arbitration cases are being heard from the construction and energy sectors in the wake of falling oil prices.
An increasing number of arbitration cases are being heard from the construction and energy sectors in the wake of falling oil prices.

Qatar’s expanding economy is creating an environment for an increased need for arbitration, said Andrea Carlevaris, secretary-general, ICC International Court of Arbitration.

A growing number of cases requiring arbitration are being seen in Qatar, with more companies opting for out-of-court settlement to resolve their commercial disputes.

In 2015 about 30 cases of commercial disputes from Qatar reached International Chamber of Commerce (ICC) arbitration body, whereas as a decade ago, there were less than five cases.

Carlevaris pointed out rising numbers in cases “means growth in local economy and that there is more international business in Qatar.

The secretary-general was talking on the sidelines of the first International Arbitration Conference on Arbitration and Dispute Resolution organised by the International Chamber of Commerce Qatar last week in Doha.

He continued: “More cases also mean that Qatari parties are relying on the ICC as reliable dispute settlement mechanism.

“ICC arbitration system is considered reliable not only by international investors but also by Qatar’s private and public sector,” he added.

Arbitration is the globally preferred method in which to solve disputes and has substantial advantages over litigation in court.

The advantages include: parties have control of the process; there is lower cost and shorter time to resolution; the process affords flexibility and privacy. It is normal or companies locked in a commercial dispute to shun unnecessary publicity and to seek privacy in a settlement.

“Companies prefer an out of the court settlement through arbitration because this process is comparatively fast and companies get privacy,” said Thani bin Ali Al Thani, board member, Qatar International Center for Conciliation and Arbitration.

He added: “Unrelated persons do not come to know which companies are settling disputes and on what matter.”

Most of the cases from Qatar seeking arbitration came from the construction and energy sector, Qatar’s two most influential sectors affecting the economy.

With the mega-projects presently underway, involving many contractors and sub-contractors, it is inevitable that there will be areas of dispute.

In the main, the point of dispute were related to pricing or delay in the delivery of projects and Carlevaris commented: “Construction and energy sector exhaust most of the cases coming to arbitration.”

As the energy prices continue to fluctuate, more companies from Qatar are likely to go for arbitration according to Carlevaris who said: “Fluctuations in the energy prices has been a significant factor in the boom of these cases.”

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