Escolar Documentos
Profissional Documentos
Cultura Documentos
Bernard Barbour Head of Legal, Compliance & Shariaa Affairs/Company Secretary QInvest LLC
Two legal systems operate in Qatar: - Civil law - Common law (QFC)
1- Civil law
1- Civil law
Qatar is an Islamic state and the Permanent Constitution of Qatar provides at Article (1) that: The Islamic Shariaa shall be a main source of legislation in the state. In addition . Law no. (22) of 2004 (the Civil Code) provides in Article (1) paragraph (2) that: If no legislative provision is given, the judge will issue a ruling in accordance with Islamic
Shariaa
and Article (151) of the Civil Code provides that: If the object of an obligation is contrary to the public order or morals, the contract will be void ;
2- Recognition of Trust
2- Recognition of Trust*
The Laws of Qatar do not recognize the concept of a trust as commonly understood in common law jurisdictions, and may construe a trust as an agency relationship. A Qatari court may not, therefore, enforce any trust arrangements set out in the transaction documents or the Certificates in accordance with their terms and may, at its discretion, apply Qatari law agency principles to the relevant provisions of the transaction documents of the Certificates;
* QFC Jurisdiction recognizes Trust according to a specific regulation related to it.
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3- Conclusive Certificates
3- Conclusive Certificates
Any provision to the effect that any calculation, determination, certification, notification will be final, conclusive or binding might be set aside by courts of Qatar or might not be found to be conclusive, final or binding if the same were made or given unreasonably, fraudulently, incorrectly, arbitrarily, in the absence of good faith or in the event of manifest error. Further, the courts of Qatar may not accept the calculation, determination, certification, notification of one party to be final, conclusive or binding without further enquiry, notwithstanding provisions to the contrary.
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(real estate laws are of public order, real estate tranactions cannot be subject to a foreign law).
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5- Currency Issues
5- Currency Issues
No clear text exists as to whether a judgment in a foreign currency would be awarded by Qatari courts in relation to the transaction documents or whether any judgment obtained in another jurisdiction in a foreign currency would be enforced by the Qatari courts in relation to that currency. In the event that the Qatari courts were to make an award in Qatari Riyals, they would not necessarily calculate the award on the basis of any conversion provisions set out in the transaction documents. The basis of the calculation of any such award would be at the discretion of the court. Further, currency indemnity provisions contained in the transaction documents may not be enforced by the Qatari courts;
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6- Late Payment
6- Late Payment
- The courts of Qatar may not allow the charging of more a reasonable percentage simple interest or profit rate despite any agreement by the parties for higher and/or compounding rates. - Penalties are void and liquidated damages are recognized but are subject to the Civil Code, which provides, under Articles (265) and (266) that: the contracting parties may specify in advance the amount of compensation by stipulation in the contract or in a subsequent
agreement. Liquidated compensation shall not be due if the debtor proves that the creditor did not suffer any damage. It may be reduced if the debtor proves that the estimation was excessive or that the original obligation has been partly performed. Any agreement to the contrary shall be void. If the damage exceeds the liquidated compensation, the creditor shall not claim more that his liquidated amount unless he proves that the debtor has committed fraud or gross negligence.;
In Addition the Civil Code provides under Article (256) that: Should it become impossible for a contractor to perform his obligation he shall be liable to compensate for failure to fulfill his
obligation, unless he proves that the impossibility of performance arose from a foreign cause beyond his control. The same judgment shall apply if the party under an obligation delays in the performance of his obligation.
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7- Set - off
7- Set - off
Article (395) of the Civil Code provides that set-off may not prejudice the rights of third parties, and Articles (265) - (267) of the Civil Code which set out how a judge may determine the value of any loss and award the consequent damages, and is based on Article (390) paragraph 1 of the Civil Code which states, A debtor will have
a right of set-off between what he owes the creditor and what is owed to him by the creditor, even if the cause of the two debts is different, if the object of each is free from any dispute, payable and demandable in law ;
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8- Force Majeur
8- Force Majeur
Article (258) of Civil Code stipulates
It may be agreed that the debtor shall assume the risk of unexpected events and force majeure.
Accordingly where any relevant document contains a force majeure clause which specifies the exclusive events that constitute a force majeure, then such force majeure clause will be valid, legally binding and enforceable in accordance with its terms between the parties to that document and no such party will be entitled to seek relief pursuant to the Civil Code in respect of any event that does not fall within the exclusive definition of force majeure contained in that document.
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9- Foreign Law
9- Foreign Law
The Civil Code recognizes the contracting parties freedom of contract including the parties freedom to have a choice of law. Although this choice may be restricted in certain circumstances, the restriction is usually related to issues of public morals and policy.
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10- Insolvency
10- Insolvency
The obligations of the parties under the transaction documents will be subject to any limitations arising from (to the extent the following are applicable) bankruptcy, liquidation, insolvency, administration, and other terms and general principles relating to or affecting the enforcement of creditors rights; According to Companies Law No. (5) of 2002 a liquidator of a company shall pay the debts of a company after deducting liquidation expenses including the remuneration of the liquidator by first paying amounts payable to the companys employees, then the amounts due to the state of Qatar and then rents payable to the owner of any real estate leased by the company and then other amounts due in accordance with priorities according to law. Article (375) of the Civil Code gives Qatari courts discretion to grant a grace period for repayment of debts. Article (664) of Law No. (27) of 2006 (the Commercial Code Law) provides that the adjudication of Bankruptcy shall not automatically terminate the contract, unless the contract was based on personal considerations (i.e., the unique characteristics or qualifications of a natural person). Subject to approval of a Qatari court, a bankruptcy administrator has discretion as to whether or not to implement contracts, and where the bankruptcy administrator does not implement a contract, the other party can terminate the contract and participate, with the other creditors, in the compensation resulting from termination;
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11- Immunity
11- Immunity
Law No. (18) of 1996 amending certain provisions of Law No. (10) of 1987 in respect of the Public and Private Properties of the State of Qatar provide that the assets of the State which are used for a public service or as public utility will be immune from enforcement. For all other properties, the immunity can be waived contractually. The waiver of sovereign immunity has never been tested before a Qatari court or any other authority in Qatar.
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14- General
14- General
- All documents submitted to Qatari courts must be in Arabic language. Documents originally in a language other than Arabic are binding; however they should be translated into Arabic for submissions to a Qatar court and are then deemed to be the definitive and binding version for the purposes of all proceedings before these courts. - Any term of an agreement may be varied, amended or discharged by the parties thereto by a further agreement that may be effected orally, in writing or by a course of dealing, notwithstanding provisions to the contrary. - Where any person vested with discretion or may determine a matter in its opinion, Qatari Law may require that such discretion is exercised honestly, in good faith and not capriciously or that such opinion is based on reasonable grounds. - The effectiveness of any provision exculpating a party from a liability or duty otherwise owed may be limited if they are unreasonable, if the act causing such liability was intentional or the party causing such liability was grossly negligent or fraudulent. - No stamp, registration or other taxes, duties, assessments or governmental charges of any nature are payable on or in relation to the execution, delivery, performance or enforcement of the Sukuk documents or are required to render the documents or the Certificates admissible as evidence in Qatar.
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Thank you
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