A run-down of the new Qatari Arbitration Law
The new Qatari Arbitration Law should serve to increase efficiency and transparency, thus significantly benefitting the country’s construction sector
Designated under Law No 2 of 2017, the new Qatari Arbitration Law was unveiled recently. Comprising 38 articles, this piece of legislation has been designed to replace obsolete provisions found in the country’s commercial procedural law, which dates back 27 years.
The legislation reflects modern trends in arbitration, echoing several rules from the UNCITRAL Model Law on International Commercial Arbitration. With the potential to positively impact Qatar’s construction sector and, in particular, the resolution of disputes, it has been welcomed by entrepreneurs and arbitration practitioners alike. The law covers numerous salient topics, including the arbitrability of administrative contracts, the validity of written agreements, the authority of arbitrators, the role of arbitration centres, shorter time limits and settlement periods, evidence rules, and grounds for the setting aside of arbitral awards.
With regards to the arbitrability of administrative contracts – such as those tendered by Qatar’s Public Works Authority, Ashghal – the new law opens up the possibility of inserting arbitration clauses into administrative contracts, wherein one of the parties is a public entity. However, such agreements would still have to receive authorisation from the Prime Minister or his delegate, such as the Minister of Finance.
In line with the UNCITRAL Model Law on International Commercial Arbitration, the legislation has expanded recognised forms of written arbitration agreements to include either contracts signed manually, or through an electronic exchange of letters or e-mails. It will also be sufficient for a party to admit the existence of an arbitration agremeent in its pleadings, even if no other written record exists.
Arbitrators may now compel parties to take – or refrain from taking – specified actions by ordering them to continue the performance of contractual obligations; abstain from abusive calls of performance guarantees; or provide security for costs. Moreover, an arbitration panel may order employers to make interim payments when such measures are deemed necessary to enable contractors to remain in business, execute projects, or preserve evidence.
The updated legislation also reinforces the role of arbitration centres, which are now considered authorities. These bodies are responsible for the provision of support and assistance to address challenges associated with recalcitrant parties that abstain from appointing arbitrators, the replacement of arbitrators, and so on.
In addition, shorter time limits have been fixed in a bid to improve the efficiency of arbitration. For instance, requests to challenge arbitrators must now be made no later than seven days after his or her appointment. What’s more, in cases where an agreement has not been reached between parties, the legislation stipulates that the arbitration award should be rendered within 30 days of the closure of proceedings, and only one extension to this deadline – of a similar period – may be issued.
Parties are also now free to agree on the procedure to be followed by the arbitral tribunal in conducting the proceedings. This may include the application of rules of evidence, such as the International Bar Association (IBA) Rules on the Taking of Evidence in International Arbitration.
Finally, the new law acknowledges the finality of arbitral awards. While the losing party still has 30 days within which it can challenge an award through an annulment on the grounds of lack of procedural integrity, it may no longer appeal an award. The Qatar Financial Centre (QFC) International Court and the Qatari Court of Appeal are both permitted to hear actions for nullity. This innovation should help winning parties to ensure the enforcement of awards and collect their pecuniary rights.
By adopting a large part of the UNCITRAL Model Law on International Commercial Arbitration, which has gained broad acceptance on the international stage, the new Qatari Arbitration Law should serve to increase efficiency and transparency. In turn, it has the potential to significantly benefit the country’s construction industry.
Dr Minas Khatchadourian is an international arbitrator and legal consultant at the Qatar International Center for Conciliation and Arbitration (QICCA).