The Emir of Qatar, Sheikh Tamim bin Hamad al Thani, issued Law No 2 of 2017 on 16 February 2017 (the "New Arbitration Law"). The New Arbitration Law has not yet been published in the Official Gazette and implementing regulations are yet to be issued, but the New Arbitration Law will come into force 30 days after this occurs.
The New Arbitration Law replaces Articles 190 to 210 of the Qatari Civil Code, which previously governed arbitration proceedings seated in Qatar. In a positive step, it is substantially based on the UNCITRAL Model Law, which is the benchmark for arbitration legislation, and will apply to all ongoing and future disputes. Although other jurisdictions in the region (such as the UAE) have considered adopting or have adopted the UNCITRAL Model law (for example, the 2005 Arbitration Regulations are heavily based on the Model Law), Qatar will be the first in the region to implement them onshore. Nevertheless, it remains to be seen how these provisions will be applied in practice and the courts' approach when asked to exercise their supervisory jurisdiction.
We set out below the key provisions of the New Arbitration Law.
The New Arbitration Law expressly recognises the fundamental principle of competence-competence, which provides that it is the arbitral tribunal that has competence to decide on its own jurisdiction. Jurisdictional challenges must be brought before the defence is submitted; however, the tribunal has the discretion to accept late challenges if it decides the delay is justified. Decisions on jurisdiction are subject to review by the Qatari Courts, although review by the Courts will not stay the arbitration.
Procedural objections are deemed to have been waived if parties do not raise an issue about a law or violated procedure at the time it happens. Interestingly, the New Arbitration Law sets out a framework of procedural rules for arbitrations, encompassing matters usually covered by the rules of arbitral institutions. While the New Arbitration Law allows parties to adopt a different set of procedures under Article 19, it will nonetheless be intriguing to see the way in which certain provisions (which are drafted in a manner that may be construed as taking precedence over any agreed procedural rules) will be interpreted in practice.
The New Arbitration Law imposes a duty on arbitrators to observe the principles of impartiality and equality between the parties. Notably, arbitrators are granted a general immunity under Article 11, except in cases where they conduct their functions in bad faith, collusion or gross negligence. This will provide some comfort to foreign arbitrators considering appointment nominations in Qatar, particularly given the issues around the recent amendment to Article 257 of the Penal Code in the UAE, and instances in Qatar of parties seeking to hold arbitrators financially and criminally liable for their actions.
Parties are required to appoint an arbitrator from a list issued by the Ministry of Justice under Article 11, but can appoint their own arbitrators if the appointment complies with the following conditions: the arbitrator must be competent; not subject to any criminal convictions; and reputable. Although the conditions are fairly straightforward, we are yet to see the way in which these requirements will be interpreted and applied under the New Arbitration Law.
Awards under the New Arbitration Law are final and binding and the process of recognising and enforcing awards has to some extent been simplified. The award is final and capable of execution, with fairly limited grounds for refusal by courts (based on the New York Convention). An award can be annulled through an application to set aside the award, which must be filed within one month of the award; any court judgment on an annulment application is final and not subject to appeal. However, an award can only be enforced after the expiry of the one month period provided for challenging the arbitration award.
The New Arbitration Law provides that an award is to be kept confidential unless agreed otherwise, however, it also imposes a requirement that a copy of the award is sent to the Arbitration Affairs Department at the Ministry of Justice within two weeks of it being issued. It is unclear how these awards will be used by the Ministry and what duties of confidentiality will apply to the department. Nonetheless, it is hoped that this duty would implicitly remain applicable to those in the department who gain access to it.
Requests for additions or corrections to the award are to be submitted within 7 days, and if it is impossible for the arbitral tribunal to deal with these requests for any reason, the courts will have the jurisdiction to do so.
The introduction of the New Arbitration Law, incorporating much of the UNCITRAL Model law, is a positive step towards making onshore Qatar a more arbitration friendly jurisdiction, bringing onshore Qatar in line with the QFC. Given the current concerns being raised regarding arbitration in Dubai, Qatar's nearest arbitration hub, the introduction of a new law based on the UNCITRAL Model Law (in particular, the safeguards relating to immunity under the New Arbitration Law) will be welcomed by foreign arbitrators and practitioners alike. Nevertheless, it remains to be seen how the onshore Qatari courts will respond the New Arbitration Law.
+971 4 428 6350