Third-party funding (TPF) is increasingly prominent in international arbitration, offering parties a means of managing the substantial costs of proceedings. In Qatar, the position has until recently been uncertain. The Arbitration Law No. 2 of 2017 (the “Arbitration Law”) neither prohibits nor expressly permits TPF, leaving the matter to practice and institutional rules.
The QICCA Arbitration Rules 2024 (“QICCA Rules”) now provide the first express framework, requiring disclosure of funding arrangements. While this is a significant development, it is important to note that the Rules are not legislation and apply only to arbitrations administered under QICCA.
This article considers:
- the disclosure framework under the new QICCA Rules;
- how international guidance informs tribunal practice;
- the practical issues likely to arise in Qatari arbitrations, including conflicts, security for costs, and recoverability of funding expenses; and
- the potential flashpoints at the enforcement stage, particularly licensing and privity.
The emerging picture is one of opportunity but also risk: while TPF may ease access to arbitration, unresolved questions under Qatari law and public policy may ultimately determine whether the benefit of funding survives to enforcement.
The Legal Framework Under QICCA Rules
Parties' Disclosure Obligations
Article 9 of the QICCA Rules obliges any party benefitting from TPF to disclose the fact of such funding, in writing, to the Centre or the tribunal. This duty applies from the commencement of proceedings and continues throughout their duration. The disclosure must identify the funder and describe the nature of the arrangement.
Tribunal's Disclosure Obligations
Once funding has been disclosed, the responsibility shifts to the arbitrators. Article 15 of the QICCA Rules requires an arbitrator to disclose any circumstances likely to give rise to doubts as to independence or impartiality, and to continue to do so throughout the case. The same obligation is contained in Article 11(4) of the Arbitration Law. In practice, a party's disclosure of TPF triggers a second stage of disclosure by the tribunal itself, ensuring that potential conflicts are properly addressed.
Scope of Disclosure
Article 9 goes further than many comparable regimes, in that it requires disclosure not only of the funder's identity but also of the nature of the funding. As with the ICC, LCIA and HKIAC Rules, however, it leaves it to the tribunal to determine whether any further details — for example, profit-sharing terms, control rights, or cover for adverse costs should be disclosed. QICCA's approach is therefore consistent with leading international practice, striking a balance between transparency and confidentiality.
International Guidance
In the absence of detailed direction under Qatari law, tribunals may draw upon international benchmarks:
- The IBA Guidelines on Conflicts of Interest in International Arbitration (2024 update) recommend treating funders with a direct economic interest as equivalent to parties for conflict checks, thereby supporting disclosure of their identity.
- The ICCA–Queen Mary Report on TPF (2018) notes that tribunals may need to know whether a funder has agreed to cover adverse costs, particularly when considering security for costs or costs allocation.
- The CIArb Draft Guideline on TPF emphasises early and continuous disclosure, but cautions that production of the funding agreement should be ordered only where directly relevant, such as questions of control or liability for costs.
The emerging consensus is one of proportion: funders' identity should always be disclosed, but the terms of the funding should be revealed only where strictly necessary.
Practical Issues in Qatar
Conflicts of Interest
Where a funder has ties to an arbitrator or to their firm, impartiality may be questioned. Conflict checks must therefore extend to funders and their affiliates. Counsel should also recognise that funding may create avenues of attack in cross-examination. Just as experts are sometimes challenged on the basis of repeat instructions from the same client or firm, a similar line may be pursued where an expert has appeared in successive cases financed by the same funder. The suggestion is that the funder, as the true paymaster, may influence the expert's independence. While the existence of funding does not of itself impugn impartiality, such arguments may be deployed to undermine credibility and must be anticipated.
Security for Costs
Article 37(2) of the QICCA Rules empowers tribunals to order security for costs. Respondents are likely to argue that reliance on TPF increases the risk of non-payment of an adverse costs order. International practice suggests that funding alone should not justify security. Whether Qatari tribunals adopt that approach remains to be seen, as there is no published QICCA or court practice to date. This remains an emerging battleground, rather than a settled principle.
Costs Allocation
Article 31 of the Arbitration Law gives tribunals broad discretion over costs, while Articles 73 and 78 of the QICCA Rules limits recovery to “reasonable” costs incurred by the parties. There is no express basis for recovering the cost of funding, nor for ordering a non-party to bear adverse costs. A tribunal might attempt to characterise funding expenses as ‘reasonable costs', but such an approach would be novel and faces significant enforcement risk. It is safer to conclude that recovery of funding costs is doubtful, and that imposing liability directly on a funder would encounter significant resistance at the enforcement stage.
Enforcement and Public Policy
Articles 34–36 of the Arbitration Law govern enforcement. Awards addressing funder liability or seeking to recover funding costs are vulnerable to public policy objections. Qatari courts have not yet considered TPF directly, but their case law shows a firm stance when contracts are said to conflict with mandatory law or Sharia principles. Potential flashpoints include:
- Licensing requirements: Qatar has no dedicated regime for third-party funding, but arguments could be made that it amounts to a regulated financial service, or that funders fall within rules on operating a business in Qatar without registration. Such objections are highly speculative yet plausible, given that Qatari courts often treat compliance with licensing and registration requirements as mandatory and as matters of public policy. Again, this is highly speculative but certainly plausible in certain circumstances/
- The doctrine of privity: funders are not parties to the arbitration agreement, and any attempt to bind them directly is likely to be resisted.
Qatari courts interpret public policy broadly, extending it to encompass mandatory provisions of the law. Enforcement jurisprudence in arbitration is still developing, which makes the outcome of challenges less predictable. While some may view concerns over licensing or privity as cautious, presenting them as speculative yet plausible reflects the reality that such objections remain untested but are available lines of argument parties may seek to advance.
Key Takeaways
- Qatar's Arbitration Law is silent on TPF, but the QICCA Rules 2024 introduce the country's first express disclosure regime.
- Disclosure operates as a two-stage process: parties disclose funding; arbitrators then disclose any resulting conflicts.
- The scope of disclosure is aligned with international practice: identity and nature of funding must be disclosed, while further terms are left to tribunal discretion.
- Costs are limited to those incurred by parties. There is no clear basis to recover funding costs or impose liability on funders.
- Enforcement risks remain: licensing arguments and privity have the potential to be tested if awards impose liability on funders.
Conclusion
Third-party funding is no longer a theoretical issue in Qatar. The QICCA Rules 2024 introduce the country's first express disclosure regime, though this applies only to arbitrations administered under QICCA. Broader questions remain unsettled, particularly in relation to security for costs, recoverability of funding expenses, and enforcement before the Qatari courts. While tribunals may look to international guidance, it will ultimately be the courts that define the outer limits of enforcement. For parties and counsel, TPF presents both opportunity and risk: what may facilitate the commencement of proceedings may later become the focus of procedural challenge or resistance at the enforcement stage.
As the use of TPF increases, it will be important to monitor how Qatari courts and tribunals apply these principles in practice.
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.
