Qatar’s new mediation law provides contracting parties with a more supportive legal environment for dispute resolution and ensures that any settlement reached is enforceable.
Mediation
Mediation is a method of resolving disputes without going to court or arbitration. It involves parties’ agreement to appointing a mediator who facilitates discussions regarding the dispute, in an effort to find common ground and assist with reaching an amicable settlement agreement.
The mediator is not a decision maker – mediation requires the parties to reach a decision themselves and, if or when they do, their agreement is reflected in a settlement agreement. When a settlement is reached, it saves substantial time and cost as compared to formal dispute resolution. If the mediation is unsuccessful, the parties are able to resort to litigation or arbitration depending on the terms of their contract.
Qatar’s new mediation law
The new law is aimed at encouraging the use of mediation in Qatar for civil and commercial disputes, to relieve pressure on courts in cases that are capable of being resolved through alternative means. While the option of mediation has always been available in Qatar, it has not always been used due to a concern that, even if the mediator manages to facilitate a settlement, any settlement agreement that follows would not be honoured, and that litigation or arbitration would be required in any event.
The new law addresses that concern by including provisions for enforcing settlement agreements reached through mediation, in addition to the imposition of a fine between 1-20,000 Qatari riyals (up to US$5,490) where a party refuses to abide by the settlement agreement. It also ensures that the court can dismiss a court case – and impose a fine on a claimant that attempts to start a litigation – where a mediation agreement is already in place between the parties.
The law sets out a relatively short mediation period of 30 days from the date on which the mediator is appointed, although this can be extended by the parties, and requires the mediator to consider the need to resolve the dispute in the shortest possible time. It also requires settlement agreements to be made in writing and prepared by the mediator within seven days of reaching a settlement in the dispute.
The law’s confidentiality stipulations means that all discussions, offers, negotiations and documents disclosed by either party are not kept in the public record. Any unauthorised disclosure of such documents or violation of the law’s confidentiality requirement carries a fine of at least 20,000 Qatari riyals.
Certain disputes are excluded from mediation under the new law including for example tax-related disputes. In accordance with legislation governing the exploitation of natural resources, disputes involving oil and gas are also excluded from the new mediation law. This would include disputes in which Qatar Energy, or any or its subsidiaries and affiliates, are a party.
Qatar’s progress on dispute resolution
The new law aligns alternative dispute resolution practices in Qatar with international approaches across Europe, America and Asia-Pacific, where mediation is used widely. It has been welcomed by law firms and businesses in Qatar alike, and its function and efficacy in practice will be tested over the coming years as cases are brought before the courts.
The new law complements Qatar’s ratification and adoption of the Singapore Convention on Mediation. It came into force in Qatar at the same time as the country established a new Investment and Commerce Court, with judges in the new court exclusively dedicated to deciding disputes arising from commercial contracts. The Qatari government expects the court, alongside the new statutory mediation scheme, to encourage foreign investment and support its strategy of diversified economic growth.
The 2022 FIFA World Cup
Qatar’s new mediation law, and the establishment of its new investment court come as the country prepares to host the 2022 FIFA World Cup later this year. The contract to host the event was accompanied by a requirement for Qatar to significantly develop its infrastructure and hospitality sectors, which it has done by bringing to market various mega-projects over recent years.
With these projects now completed, unresolved final account claims are arising and are expected to continue doing so in 2023. The enactment of these new laws related to dispute resolution demonstrate Qatar’s acknowledgement that businesses require a modernised approach.
Additional research by Mariam Hassaballah of Pinsent Masons.
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