New Qatari enforcement law adds certainty for executing judgment debts

The new law – the ‘Judicial Enforcement Law No. (4) of 2024’ – establishes the newly created enforcement court in Qatar and sets out its authority to consider requests for enforcement of writs of execution and claims relating to enforcement requests; and to issue and enforce relevant judgments, decisions and orders. The enforcement court replaces the previous enforcement department under the Civil and Commercial Procedures Law.

The new law provides clarification on several aspects of the enforcement procedure, including sending the notice of the writ of execution, submitting an objection against the enforcement process, filing an appeal against an order of enforcement, enforcing arbitration awards, the court’s powers to recover debt, and enables the judge to order the attachment of different types of assets, such as movable property.

The new Qatari enforcement system is expected to add certainty to the extensive measures available to the Qatari courts, particularly when commercial parties are enforcing a money judgment.

Procedure for enforcement

The Judicial Enforcement Law makes it clear that notice of the writ of execution is sent to the debtor’s national address prior to enforcement and should include certain information:

• information about the writ and the creditor;
• a statement of the sum required to be paid or procedures required to be undertaken;
• a warning notice to perform the obligation or submit proof of performance within 10 working days from the notice or otherwise the enforcement shall be carried out by force; and
• ·notice that all of the debtor’s property, as of the date of the notice, whether in their possession or held by a third party, is considered as a guarantee for the fulfilment of the obligation, and any disposition or concealment with the aim of evading the performance shall be punishable by law.

Objection to the writ of enforcement

The new rules include details on how a commercial party can issue an objection to the writ of enforcement. The rules set out that a party may submit an objection against the enforcement process within 10 working days from the date of notice claiming full or partial payment, forgery or any other claim.

The law will give the enforcement judge power to grant the objecting party some time to file an action on the merits to prove their claim and to stay the enforcement within that period. Usually, the period should not exceed 90 working days – but the judge or the trial court may extend the stay of enforcement period.

However, under the new regime, the judge may reject the enforcement request if it deems that the enforcement requires the adjudication of “substantive matters”.

Appeal against an order of enforcement

Parties are allowed to appeal against the order of the enforcement judge. An appellate circuit will adjudicate the appeal within 10 working days from notification. Once the appeal is filed by notice to the court, the appellate circuit may order a temporary stay of enforcement until the judgment is rendered. The appellate circuit’s decision is final and cannot be appealed. The Judicial Enforcement Law clarifies that these proceedings are governed by the existing Qatari Civil and Commercial Procedure Law.

Enforcement of arbitration awards

The new law has also provided detailed information on the enforcement of arbitration awards. It states that that arbitral awards are considered as a writ of execution. The enforcement of the arbitral award may not be rejected regardless of the state in which it was issued, except in two cases – arbitrability and public policy. For an arbitral award to be enforceable in Qatar, it must be “arbitrable”, which means the award must be issued in a matter that may be referred to arbitration in accordance with the applicable laws in Qatar.

In cases where an order rejecting the enforcement of the arbitral award is made, the new law allows parties to file a grievance against that order.

Powers of the enforcement court to recover the debt

The new law sets out the procedures which the enforcement court can order when executing a judgment debt. They include:

• the attachment and sale of property;
• reporting and subpoenaing;
• preventing a party from conducting actions or benefiting from certain government services with respect to private companies and juristic persons;
• banning any contracts to be concluded by the government entities with the party;
• issuing a travel ban order against the debtor; and
• imprisoning the debtor

The law specifies that in event of issuing a travel ban order against the debtor, in practice this is against the persons listed as authorised signatories on the corporate registration of the company. Guidance on travel bans also states specifically that if the judgment debtor is a legal entity that is not a natural person, the travel ban may be against representatives if there is a fear they may escape or smuggle the property or assets of the entity.

In cases of an imprisonment order, the rules provide that the imprisonment may be for no more than three months per year if the debtors are capable of paying, ordered to pay and default. This extends to representatives if they are found to be obstructing enforcement, and it also identifies people against whom the judge cannot issue a writ of control.

Moveable property

The new law gives an enforcement judge the power to order the attachment of the moveable property of the debtor, whether in the debtor’s possession or in the possession of a third party. This can be done either at the judge’s own discretion or at the request of the party.

This follows a recent law on the Mortgage of Moveable Assets which came into effect in October 2021 and enables creditors to take security over moveable assets whether tangible or intangible, such as:

• debts that are currently due to the security provider;
• bank accounts, including current and term deposit accounts;
• commercial papers, certificates of deposits and financial contracts;
• all types of machinery, devices, equipment, stock and inventory; and
• intellectual property rights.

To facilitate the new approach, the law created a searchable public security register for security over moveable assets that is maintained by the Qatar Central Securities Depository (QCSD). However, the rules require that inspection of persons and locations in search of moveable property may only be done with the permission of the judge, and where there is strong evidence on the existence of valuables that can be attached. 

Other categories of assets

In addition to moveable assets, the new law also provides guidance on the enforcement of the order against various other types of assets including salaries and wages; sale of shares, bonds, revenues and stocks; and real estate.

Where tangible assets are collected to enforce the debt, the law permits a sale by public auction. In situations where recovery of real estate is required, the parties claiming to be owners of the real estate may request the nullification of the enforcement procedures and request to recover the real estate by filing a grievance with the judge. 

The law empowers the judge to inquire about the property of the debtor that is in the possession of a third party and order garnishment, a legal process of collecting a monetary judgement from a third party. The garnishees, such as a third party like the debtor’s employer, are required to hand over to the court all property or items owned by the debtor.

Distribution of the proceeds of enforcement

The new law clarifies the distribution of the proceeds of enforcement too. It says that if a sufficient amount is recovered to cover the judgment debt, then it is distributed to creditors and the remainder is given back to the debtor.

In cases where the proceeds of enforcement are not sufficient to fulfil all of the rights of the creditors, the amount shall be distributed first to preferred creditors according to their ranks, and the remainder is distributed to the ordinary creditors in proportion to the amount of debt of each of them.

Penalties for non-compliance

There are also provisions covering the penalties for parties that breach the new law. Penalties are applicable to:

• anyone that refuses to implement the orders of the court after receiving notice;
• the debtor that commits any act that obstructs the enforcement of or deliberately smuggles, conceals or disposes of their property to avoid the enforcement from the date of notification of the enforcement request; and
• anyone that refuses to hand over property held by them that belongs to the judgment debtor despite being notified to do so.

The penalties for these offences can result in imprisonment for a period that does not exceed 3 years and a fine that does not exceed QAR 100,000 (£20,800). They are tougher than the penalties under the previous system, which had a two-year limit on the imprisonment terms and a cap of QAR 10,000 for fines.