The recent judgment handed down by the Qatari Court Of Cassation in Petition n. 211 of 2014 (the “Decision”) has illustrated the importance of an awareness of statutory procedural requirements when arbitrating a dispute in which the chosen law of the arbitration is the law of Qatar.
International Arbitration is becoming an increasingly popular dispute resolution method in the GCC as evidenced by the growth in ADR institutions offering both Arbitration and Mediation services. International Arbitration offers a welcome flexibility to parties to commercial agreements seeking to resolve business disputes: the ability to opt out of the often lengthy and costly process of litigating in the local courts, in favour of a more bespoke process.
Qatar, in common with the majority of GCC Countries, has made encouraging steps recently recognising the benefits of Arbitration and in 2002 ratified the New York Convention. The creation of the Qatar Financial Centre and the establishment of the Qatar International Centre for Conciliation and Arbitration have been further positive steps. However the enforcement and procedure regarding Arbitral Awards is not similar to those found in other jurisdictions. As such many parties entering into Arbitration governed by Qatari Law may be unaware in the context of the enforcement of an arbitral award of the necessity for compliance with the procedural stipulations of the Civil and Commercial Procedure Law of Qatar.
The Decision is a reminder to those currently engaged in, or contemplating, arbitral proceedings in the state of Qatar of the procedural pitfalls that can trip up the uninitiated (although it is true to say that the wider points relating to the importance of procedural propriety that follow could equal be applied to other GCC jurisdictions).
The Petitioner (a company engaged in Marketing and Project Management) filed an application to nullify the terms of arbitral award handed down in 2012 by the Qatar International Centre for Conciliation and Arbitration (the “Arbitral Award”). The application, n. 2157 of 2012, alleged that the Arbitral Award was “in breach of the law” and had “applied it in an erroneous way…”
Chapter 13 of the Civil and Commercial Procedure Law (Law No.13 of 1990) (“Chapter 13 of the Code”) sets out, at Articles 190 – 210, the Qatari arbitration law and outlines the ways in which Qatari courts will treat arbitral awards. Whilst there are similarities with previous versions of the UNCITRAL Model Law (the “Model Law”) the relevant Articles in Chapter 13 of the Code differ from the Model Law in some material respects.
The main basis of the Petitioner’s case was that the Arbitral Award had breached Article 198 (1) of Chapter 13 of the Code which states that:
“Arbitrators make their award without being bound by the procedures foreseen in this Code, except those foreseen in the present Chapter. The award must comply with the rules of law…”
The purpose of Article 198 is to affirm that an arbitral award need not comply with all of the procedural requirements that, say, a Court judgment would be required to satisfy, but is expected to comply with the provisions of those Articles set out in Chapter 13 of the Code.
The Petitioner argued that the Arbitral Award contravened Article 198 as the award had been handed down without a copy of the Arbitration Agreement annexed to it, as required by Article (202) of the Code which states that certain documents must be exhibited to the arbitral award. In particular, Article 202 (non-exhaustively) states that:
“The award shall be in writing and shall include in particular, a copy of the arbitration document, a brief of the statements of the litigants and their documents, the reasons for the award, the text of the award, the place and date of its issue and the signatures of the arbitrators.”
In this case the Arbitral Award made reference to the arbitration agreement in the reasoning, but a copy was not annexed to the award.
The Petitioner argued that as the Tribunal had not annexed to a copy of the Arbitration Agreement to the Arbitral Award, that the Arbitral Award was therefore voidable by the court pursuant to Articles 198 and 202.
The Petitioner’s Case was rejected by the Qatari Court of first instance and the Qatari Court of Appeal; before being heard before the Qatari Court of Cassation.
The Decision accepted that the Arbitral Award had breached the relevant procedural requirements in that it had not complied with the relevant Chapter 13 provisions and should therefore be annulled for this specific reason (and without any further examination of the other reasons for challenge being required).
As such although a relatively minor issue of procedure the fact that it was not complied with lead to the voiding of an entire arbitral award. The courts of the GCC states do have a long history of insisting upon the correct “form” of official court documents, including arbitral awards. Past instances have included arbitral awards not being enforced due to the Tribunal not signing the award on each page
Clearly the Decision highlights the need to be mindful of post award formalities when enforcing arbitral awards in Qatar and the need to be mindful of the requirements of Chapter 13 of the Code. This requires instructed counsel to be aware of not just the requirements of international arbitral proceedings, but also to have a developed grasp of Qatari legal procedural formalities.