It is not uncommon for a losing party to an arbitration to challenge the final award. Such a challenge is brought before the competent court of the arbitral seat.
This article provides an overview of the legal framework for challenging arbitral awards in Qatar.
The applicable law
In 2017, Qatar enacted a new arbitration law by way of Law No. 2 of 2017 ("the Arbitration Law"). The Arbitration Law is based on the UNCITRAL Model Law and superseded Chapter 13 of Law No. 13 of 1990, which formerly contained the law relating to arbitration in Qatar.
The competent court
Article 33(1) of the Arbitration Law provides that challenges to arbitral awards must be made before the competent court. Article 1 of the Arbitration Law designates the competent court for Doha-seated arbitrations to be the Civil and Commercial Arbitral Disputes Circuit of the Court of Appeal ("the Competent Court").
The grounds for challenge
Most arbitration laws limit the right to set aside (or annul) arbitral awards to grounds relating to procedural and public policy matters. The Arbitration Law follows this approach.
Under the Arbitration Law, the grounds are divided between those that should be put forward by the parties, and those that can be raised by the Competent Court on its own motion.
Grounds to be invoked by the parties
Under Article 33 of the Arbitration Law, these grounds are the incapacity of the parties, the invalidity of the arbitration agreement, the violation of due process, the tribunal's excess of authority and the tribunal's improper constitution, as well as other procedural irregularities.
Each is considered below.
The incapacity of the parties to an arbitration agreement
Further to Article 33(2)(a) of the Arbitration Law, incapacity is determined with reference to the relevant law governing such matters.
Articles 49 to 54 of the Qatar Civil Law No. 22 of 2004 ("the Civil Code") determine a person's capacity. Minors, mentally incapacitated persons, persons without legal capacity, bankrupt people or those deprived of their civil rights as a result of criminal conviction, are considered to be lacking capacity and are thus prevented from entering into agreements (including arbitration agreements).
Invalidity of the arbitration agreement
Article 33(2)(a) of the Arbitration Law provides that the invalidity of the arbitration agreement constitutes a ground for challenge. In this respect, validity is determined by reference to the law chosen by the parties or, failing which, under the Arbitration Law. The Arbitration Law requires that an arbitration agreement be in writing for it to be valid: see Article 7(3).
Improper constitution of the arbitral tribunal and procedural irregularities
Article 33(2)(d) of the Arbitration Law provides that an award may be challenged if the composition of the arbitral tribunal, the appointment of the arbitrators or the arbitral proceedings, were not in accordance with the agreement of the parties, unless such agreement was in conflict with a mandatory provision of the Arbitration Law. Absent such agreement, a challenge can be made if the tribunal's appointment, or the arbitration procedure, were not in accordance with the Arbitration Law.
Violation of due process
Under Article 33(2)(b) of the Arbitration Law, a party that was not given proper notice of the appointment of an arbitrator or of the arbitral proceedings, or was unable to present its defence for any other reasons beyond its control, can challenge an award rendered against it.
The arbitral tribunal exceeds its authority under the arbitration agreement
Article 33(2)(c) of the Arbitration Law provides that, if an arbitral award decides matters outside the scope of the arbitration agreement, it can be challenged by the parties. This provision allows partial set aside if it is possible to separate those parts of the award rendered in excess of the tribunal's jurisdiction from matters that fell within the agreement to arbitrate.
Grounds that can be invoked by the competent court on its own motion
The Arbitration Law provides that the Competent Court may, on its own motion, set aside arbitral awards based on inarbitrability and public policy considerations.
Inarbitrability
Article 33(3) of the Arbitration Law gives the Competent Court power to set aside arbitral awards rendered in respect of inarbitrable matters.
Article 7(2) of the Arbitration Law provides that matters that cannot be subject to compromise are incapable of being arbitrated. Article 575 of the Civil Code prescribes those matters that cannot be compromised. These include 'personal status' (for example, marriage) and criminal disputes, but issues relating to the financial rights associated with these matters can be arbitrated. More generally, compromise cannot be made in respect of any disputes where the subject matter violates Qatari public policy.
Article 2(2) of the Arbitration Law requires the prior approval of the prime minister for the arbitrability of administrative dispute. It also prohibits arbitration for disputes between state entities.
Public policy considerations
Under Article 33(3) of the Arbitration Law, an arbitral award can be set aside on public policy grounds.
The concept of public policy in Qatar has been defined by the Qatari Supreme Court as a set of fundamental principles relating to the social, financial and ethical norms on which the Qatari society is based.2
The Challenge procedure
Article 33(4) of the Arbitration Law provides that, unless the parties agree in writing to extend the time limit, an application challenging the award must be filed within one month from the date of receipt of the award by the parties; notification of the award to the applicant; or the issuance of a corrective or supplemental award.
Under Article 33(5) of the Arbitration Law, the Competent Court may suspend the setting aside proceedings for a period determined by it upon the request of one of the parties. During that period, the Competent Court may give the arbitral tribunal the opportunity to resume the arbitration proceedings to take any action that the arbitral tribunal deems necessary to remedy the grounds of the challenge.
The decision of the Competent Court on any challenge is final and not capable of being appealed: see Article 33(6) of the Arbitration Law.
Originally published in GAR: The Middle Eastern and African Arbitration Review
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
