Enforcement measures

Repossession following lease termination

Outline the basic repossession procedures following lease termination. How may the lessee lawfully impede the owner’s rights to exercise default remedies?

The owner or lessor will require a court order to terminate the lease (unless otherwise agreed) and take possession of the aircraft. The owner or lessor may seek to rely upon the deregistration power of attorney and provisions of the lease to take possession of the aircraft. However, if the lessee or QCAA object and require a court order to be provided confirming the actions of the owner or lessor, court proceedings would be necessary.

Law No. 13 of 1990 (the Law of Civil Procedure) allows a creditor, an owner of an asset or a plaintiff with a valid claim against a defendant to attach an asset in possession of the other party. Therefore, in the event of a dispute over the right to possession of the aircraft to remove or export the aircraft from Qatar, then the owner or lessor or the security trustee (as the case may be) may pursue attachment of the aircraft by court proceedings in Qatar.

An attachment of the aircraft may support retrieval proceedings provided a prima facie claim can be proved by way of documentary evidence, such as the relevant transaction documents. An attachment application would have to be filed in the courts in Qatar along with relevant documentary evidence in support of the application. If the attachment application is successful, an attachment order is granted by the judge and sent by the court bailiff for attachment of the aircraft. Within 10 days of any successful attachment application, a merits case for damages or retrieval needs to be filed in support of the attachment proceedings. Failing this, the attachment order will be considered void.

Enforcement of security

Outline the basic measures to enforce a security interest. How may the owner lawfully impede the mortgagee’s right to enforce?

Enforcement of security is not unusual in Qatar, and courts in Qatar will order the sale of the secured asset if the outstanding debt is proven and the security has been properly created. It is important to note that enforcement is a court-led process and self-help remedies are not permitted.

The enforcement process may differ depending on the nature of the debt (commercial or non-commercial) and the nature of the assets (movable, immovable, listed shares).

Enforcement involves the secured party filing a claim for the whole amount outstanding on a debt and requesting the court to both acknowledge the security and confirm the secured party’s preferred position. The property may then be sold and subject to any preferred creditors’ rights; the proceeds of such disbursement will be applied towards the satisfaction of the debt. An expert may be appointed by the court to establish factual points relating to principal and interest.

Priority liens and rights

Which liens and rights will have priority over aircraft ownership or an aircraft security interest? If an aircraft can be taken, seized or detained, is any form of compensation available to an owner or mortgagee?

The following are instances of liens under the Civil Code and Commercial Code:

  • article 280(1) of the Civil Code - if the possession of a movable is with a contractor and the contractor has used resources in relation to that movable (eg, carrying out repairs and maintenance), such person may refrain from returning the movable until such time as it has received full payment;
  • article 281(2) of the Civil Code - the movable object over which a person is exercising a lien may be sold (i) if there is an emergency, in which case the sale can be carried out without a court order; and (ii) pursuant to a court order - in both cases the request for sale can be made if the item may deteriorate;
  • article 118 of the Commercial Code - if the full price of the goods sold has not been paid, the seller may retain such goods under his or her custody until full payment is made; and
  • article 197 of the Commercial Code - if goods have been transported, the carrier has a lien over such goods until full payment has been received.

In view of the provisions above, if repairs have been made to the aircraft or certain parts have been installed on the aircraft and have not been paid for and the aircraft is in the possession of the relevant contractor, the contractor may exercise a lien over the aircraft until payment has been made.

Note that the QCAA, in its letter of understanding issued at the time of registration of the aircraft or security interest, states that it will not record any liens until it receives consent from the owner, lessor or security trustee or agent.

With regard to state’s or government entities’ right of confiscation, nationalisation or requisition of assets, the government of Qatar may at its discretion confiscate, nationalise or requisition an asset by way of an appropriate decree under exceptional circumstances.

Enforcement of foreign judgments and arbitral awards

How are judgments of foreign courts enforced? Is your jurisdiction party to the 1958 New York Convention?

With regard to enforcement of foreign judgments, under article 379 and 380 of the Law of Civil Procedure, to enforce a judgment of a foreign court the applicant must prove that a judgment issued by a court in Qatar is enforceable in the jurisdiction of the foreign court. In addition, a judgment of a foreign court (excluding a foreign arbitral award) may be enforced in a court in Qatar if:

  • no court in Qatar has jurisdiction in the dispute and the foreign court did have jurisdiction;
  • the parties in relation to which the judgment was issued were given due notice of the proceeding and were represented at the proceeding;
  • the foreign judgment is final; and
  • the judgment does not contradict any judgment issued in Qatar, and contains nothing that would be in breach of public policy, order or morals.

Enforcement of foreign judgments would depend on the existence of a reciprocal arrangement between Qatar and the foreign jurisdiction for enforcement of foreign judgment. In the absence of reciprocal arrangement, it will be difficult to directly enforce foreign judgments in Qatar.

With regard to enforcement of foreign arbitral awards, Qatar formally acceded to the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards (the Convention) on 30 December 2002. As a result, the enforcement of foreign awards (ie, those that are issued from a seat outside Qatar and thus subject to the procedural laws of a foreign state) should occur pursuant to the terms of the Convention. Under the terms of the Convention the courts in Qatar will be entitled to refuse to enforce a foreign arbitration award only on certain narrowly defined grounds set out in the Convention.