Arbitration in Qatar, when and why?

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According to the American Bar Association arbitration “is a private process where disputing parties agree that one or several individuals can make a decision about the dispute after receiving evidence and hearing arguments.” A simple definition that is easy to understand by people not immersed in the commercial-legal field. In Qatar, Arbitration has grown significantly in recent years, both among domestic and foreign parties, the number of arbitration procedures held in Qatar is increasing, with many of them being international in the sense that at least one party is headquartered outside of Qatar.

In this article, answers to two essential questions are going to be illustrated, when to settle for Arbitration as a dispute resolution method and Why Arbitration in particular?

Arbitration definition in the scope of Qatari Legislations:

The Qatari legislator defined arbitration in the relatively new Law number (2) of 2017 promulgating the civil and commercial Arbitration Law in article (1) as “A legal consensual method to settle disputes in lieu of judicial proceedings, whether the arbitral proceedings are administered by a permanent Arbitration Centre or otherwise, according to the agreement of the Parties.” A broad definition that was supported with various articles throughout the aforementioned law, as the agreement mentioned in the definition is clarified in article 7 (1) of the law states that it “ is the agreement of the Parties, whether they are legal persons or natural persons having the legal capacity to enter into contracts, to refer to Arbitration, to decide on all or some disputes that have arisen or that might arise between them in respect of a defined legal relationship, whether contractual or non-contractual. The Arbitration Agreement may be a separate agreement or in the form of an arbitration clause in a contract.” moreover, Article (1) also determines and clarifies the terms used in the law such as: the parties , the arbitral tribunal, the competent court and arbitration centers,  To conclude, it is fair to claim that the Qatari Legislator committed to the common worldwide definitions of Arbitration and its main pillars and principles , as the Arbitration Law of 2017 itself is largely based on the 2006 UNCITRAL Model Law of 2006, unlike most of the other laws in the state of Qatar, an official English version of the law was published by QICDRC on the 12th of April 2017, in a realization of the importance of foreign parties in ADR cases in general and in arbitration in particular.

When to refer to arbitration?

To address the answer of this question properly, we must clarify the situations and scenarios where referring to arbitration is illegal, wouldn’t be considered binding or needs a special approval from certain authorities according to Qatari Laws, examples of such scenarios are as follows:

  • Agreement to Arbitration in administrative contract disputes shall be subject to the approval of the Prime Minister, or the person to whom he delegates.
  • Public juridical persons may not, in any case, refer to Arbitration to settle any disputes arising between them.
  • Arbitration is not permitted in matters in which conciliation is not permitted.

Legally speaking, arbitration is allowed in any other situation or relationship, regardless of the nature of the legal relationship which is the subject of the dispute, but it is with no doubt not always suitable or proper to refer to arbitration, firstly we must highlight that the  consent of the parties is essential, because of the fact that if one of the parties in a dispute wishes to go to arbitration, it does not preclude the other party from going to court. Arbitration takes place only when two parties agree to it, either before or after a legal disagreement arises. As a result, commitments to arbitrate conflicts are generally included in a written contract signed by both parties, only then, parties can refer to arbitration instead of usual litigation, however the consent of the parties is affected by several important factors that determine when to go to arbitration, those factors differ from a case to another but generally are as follows:

  • The importance of settling the dispute in relatively short periods of time.
  • The willingness of the parties to participate in the arbitration process in order to avoid hostility.
  • Privacy, if the parties prefer on settling their dispute privately, Arbitration proceedings are generally held in private.

Why Arbitration?

Is it better to use arbitration or litigation? You may find yourself in a position where you must choose between arbitrating and litigating your case, in this part of this article, we will tell you when we prefer you to refer to arbitration. One disadvantage of civil court litigation is that the parties have no control over the judge assigned to their case. Rather, the court clerk will assign a judge to each case at random, regardless of whether that judge is familiar with the subject matter of that specific action, in arbitration, the parties have the opportunity to select an arbitrator they mutually agree on. For example, if the parties’ disagreement includes construction, they might look for an arbitrator who has litigated building disputes in their previous profession before becoming an arbitrator. Arbitrators are usually comprised of both experienced attorneys and former judges; hence, the parties need not be concerned that their arbitrator lacks experience in contrast to a civil court judge, another important factor is that Arbitrations seem to be quicker than litigation and are usually settled in a shorter period of time. It can be completed in as little as 45 days, depending on the dispute and the kind of arbitration, Furthermore, unlike civil court judges, who are allocated a huge number of cases, arbitrators are often assigned a considerably smaller caseload. As a result, if a party decides to submit a motion, an arbitrator will almost certainly be able to hear it sooner than a civil court judge. Due to the judge’s overloaded docket.

Author: Mr. Mohammad Mufid Ratib Qurashi

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