The role of lawyers in a time of crisis
For general counsel based in Qatar the last few months have provided a crash course in crisis management. While life in Doha remains largely unchanged, the June 5 decision by Saudi Arabia, United Arab Emirates, Bahrain, and Egypt to suspend diplomatic ties with Qatar has plunged businesses and their advisers into a period of uncertainty.
The political isolation of Qatar has implications that go far beyond its borders: not only is the country the world’s largest exporter of natural gas, but The Qatar Investment Authority holds significant stakes in a number of major global businesses. There is also the small matter of preparing to host the World Cup in 2022.
As Dr Hussam Hafez of Gulf Legal Consultants observed in his introductory address, Qatar’s political isolation not only represents a political crisis within the Gulf Cooperation Council (GCC), but a broader crisis in the legitimacy of international public law.
To discuss the role lawyers are playing in the ongoing crisis, The Legal 500 and Gulf Legal Consultants gathered together a group of senior counsel representing some of the most important companies in the region.
The waiting game
‘The most difficult thing about the current situation’, commented one GC, ‘is that we are not sure if this is the beginning or the end of a crisis. Life could return to normal very quickly or conditions could get a lot harder for all of us. To a large extent the situation will be dictated by how political events unfold, but as legal advisers we are not in a position to wait and see, we need to know how to act now.’
With contractors affected locally, talk naturally turned to role GCs were playing in re-examining contracts and potentially invoking force majeure. The general view was that businesses in the country would revisit contracts and, where possible, relocate dispute resolution from the Dubai International Finance Centre (DIFC) and to Qatar. The possibility of making a claim to the Competition Commission on behalf of Qatari companies was also discussed with interest.
It was apparent that GCs are becoming increasingly involved in examining their business’ wider operations, for example by reassessing the use of cloud servers based in Saudi Arabia, United Arab Emirates, Bahrain or Egypt, or the decision to outsource core functions to companies headquartered in those nations. Stringent anti-money laundering and data privacy laws were also highlighted as concerns facing GCs in a range of sectors.
A blessing in disguise
In spite of the obvious difficulties faced by businesses in Qatar, most GCs were keen to emphasise the opportunities generated by the crisis. In particular, many felt that corporate governance had already become stronger as their businesses look to new trade partners outside the region.
‘The lesson is that we have to diversify our business away from the GCC’, noted one senior counsel. ‘Many businesses in the country have built close trade links with neighbouring nations, but there is a wider world out there we have overlooked and this is a good opportunity to rethink our strategy and to develop new internal procedures that are more in-line with global business norms.’
Such optimism is backed up by figures from The Qatar Financial Centre Authority (QFCA), which has seen a 40% increase in the number of new firms registered under the QFC Regulatory Authority in the first half of 2017 compared to the same period last year.
One thing is clear: GCs in Qatar are being asked to contribute beyond giving traditional legal advice. As one GC summarised: ‘In a situation like this there is rarely a precise legal answer to the questions business is facing. The board is not looking for a yes/no answer – they are no longer asking me “is it legal or not?” – but they are seeking my informed opinion as a business leader. For a lawyer, that is a very positive thing. As another commented, ‘for legal teams in Qatar, now is the time to approach your board with requests for extra budget and staff.’
Please scroll down to see pictures of the event: