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Qatar Court of Cassation clarifies grounds for setting aside an arbitral award

The decision of Qatar’s Court of Cassation to overturn a widely criticized lower court decision to set aside an arbitral award has been widely welcomed.

Currently, Qatar does not have a distinct arbitration law. The Qatari Civil and Commercial Code of Procedure (Law No 13 of 1990) includes a section that governs arbitration (the Articles). The Articles have been widely criticised and Qatar recognizes the need to update them. A draft arbitration law, based on the UNCITRAL Model Law, is currently being prepared in Qatar.

The main criticism of the Articles has been the very wide scope for the setting aside and nullification of arbitral awards. One of the grounds listed in the Articles is that an award is null and void if it was not rendered in the name of the Emir of Qatar. If an award lacks such formalistic requirement it will be considered void for reasons of public policy. This was previously confirmed by a decision of the Qatari Court of Cassation in 2012. In that judgment the Court of Cassation nullified an award rendered under the auspices of the Qatar International Centre for Conciliation and Arbitration on this ground. Since then, the Qatari courts have also used this ground to deny enforcement of foreign issued awards.

However in a recently published reasoning, the Qatari Court of Cassation overturned a judgment made by a lower court nullifying an award which was not rendered in the name of the Emir. The Court of Cassation confirmed the validity of the award and ordered its enforcement under the New York Convention.

It is worth noting that although the arbitration was seated in Qatar, between Qatari entities, in respect of a Qatari project, with Qatari law governing and proceedings conducted under the ICC rules. However the Court of Cassation classified it as a “foreign award” and hence requirement of it being issued in the name of Emir of Qatar was not applicable. Therefore the Court of Cassation found that there was no defect with the award and sent the case back to the court of appeal for reconsideration. The Court’s characterization of the award is uncommon as there was no apparent foreign “ingredient” in the arbitral proceedings, save for them being subject to the ICC rules.

It is hoped that this judgment is a start of a new trend offering investors some confidence in Qatar’s judiciary and that Qatar is an arbitration-friendly jurisdiction. The Court of Cassation judgment is only of persuasive effect, so it will be interesting to see whether lower courts will follow it in the future.