When entering into any contractual agreement, it is
important to carefully consider the dispute resolution clause
as this will determine where and how disputes will be heard.
Similarly, when entering into a facility agreement where one of
the parties is in Qatar or where the contract is performed
(partially or completely) in Qatar, it is important to
understand whether Qatari courts would uphold the parties'
choice of foreign law and foreign jurisdiction or arbitration
or dismiss them in favour of Qatari laws and courts.
In principle, parties may validly elect to have the laws of
another jurisdiction govern the terms of their facility
agreement. A competent Qatari court will likely uphold such a
choice provided that the provisions of the chosen foreign law
do not contravene public policy or morality in Qatar. However,
applying a foreign law through a Qatari court can encounter
challenges. A party arguing in favour of the application of
foreign law must produce a duly authenticated translation of
the relevant law(s) of the foreign jurisdiction, otherwise the
local court will apply Qatari law. Producing an authenticated
translation in a timely manner purports to be difficult,
particularly when the foreign governing law is an un-codified
law (ie, English law). If the party fails to provide the
authenticated translation, a Qatari court will apply Qatari law
regardless of the parties' agreement.
While the choice of foreign law is likely to be upheld in
Qatar subject to the above, Qatari courts would exercise
jurisdiction, notwithstanding the parties' agreement to
contract out of the Qatari courts' jurisdiction, by agreeing to
submit disputes exclusively to the jurisdiction of another
Qatari courts have historically ignored and dismissed
parties' agreements on foreign jurisdiction as a matter of
public policy and retained jurisdiction over disputes filed
before them. Most recently, a decision rendered by the Court of
First Instance on June 25 2015 confirmed the principle that no
parties will have the right to disregard Qatari courts in
favour of foreign jurisdictions (the Swiss courts in this
case). In making its decision, the Court of First Instance
relied upon previous Court of Cassation judgments confirming
that the jurisdictional issue is a matter related to public
policy. As such, if the Qatari court finds itself competent to
hear the case, the parties' agreement to refer their dispute to
foreign jurisdiction will not be upheld.
The approach of Qatari courts differs when it comes to the
parties' agreements to arbitrate rather than their agreement to
resort to a foreign court. If the parties to a facility
agreement agree on arbitration as the means of solving
disputes, a Qatari court would, in principle, defer the parties
to arbitration if, at the first hearing, one of the parties
raised an objection based on the arbitration clause and
challenged the court's jurisdiction.
The process of recognising and enforcing a foreign judgment
and a foreign arbitral award should also be taken into account
when considering a dispute settlement provision in facility
Enforcement of foreign judgments is subject to the principle
of reciprocity recognised under article 379 of the Code of
Commercial and Civil Procedure. A Qatari court would require
evidence that the competent court in the relevant foreign
jurisdiction would enforce Qatari judgments. In addition to the
reciprocity requirement, enforcement of a foreign judgment is
subject to various other conditions set out in article 380 of
the Code of Commercial and Civil Procedure.
Since Qatar formally acceded to the New York Convention on
the Recognition and Enforcement of Foreign Arbitral Awards (New
York Convention) on December 30 2002, Qatari courts have
confirmed that recognising and enforcing a foreign arbitral
award is subject to the terms of the New York Convention. While
recognition of a foreign arbitral award would be, in principle,
subject to the same requirements set out under article 380 for
enforcement of foreign judgments, the principle of reciprocity
does not come into play. Furthermore, Qatari courts have been
encouraging the enforcement of foreign arbitral awards under
the New York Convention.
Given this approach of the Qatari courts, parties entering
into facility agreements are recommended to either agree on
Qatari law as the governing law with Qatari court jurisdiction,
or alternatively, select a foreign law and arbitration.
Agreeing on a foreign law and a foreign jurisdiction entails
the risk of having a Qatari court dismiss the dispute
resolution clause in favour of Qatari courts.
Hani Al Naddaf