On 7 December 2013, the Qatar Court of First Instance refused to enforce and annulled an ICC award rendered in Paris, France, under Qatari Law for violation of public order because it had not been issued in the name of his Highness the Emir of Qatar, according to Global Arbitration Review.
This ruling must be read in light of a decision of the Qatar Court of Cassation of 12 June 2012, which must have had a strong influence on the present decision. In 2012, the Court of Cassation examined the validity of an award settling a dispute arising between partners of a Qatari company regarding the evaluation of its shares. The arbitration was brought before the Qatar International Center for Conciliation and Arbitration (QICCA), the seat of arbitration was Qatar and the dispute was governed by Qatari law.
The Court noted that:
- Under Article 63 of the Qatari Constitution, “Judicial Authority shall be issued in the name of the Emir” and pursuant to Article 69 of the Qatari Code of Civil Procedure, “Judgments are issued and enforced in the name of His Highness The Emir of Qatar”;
- Arabic texts do not distinguish between the terms awards and judgments and that, according to Article 198 of the Qatar Civil Procedure Code, arbitrators “shall issue their awards provided that they do not violate the rules of public policy”.
The Court of Cassation declared that Articles 63 of the Qatari Constitution and 69 of the Qatari Code of Procedure Civil apply not only to judgments but also to arbitral awards and that therefore, arbitral awards should be rendered in the name of the highest authority in the country because this statement confirms that the public force has rendered the judgment (or the award) and requires its enforcement. Article 69 of the Qatari Code of Civil Procedure being of public policy, judgments or arbitral awards rendered in violation of this provision are thus null and void.
In the present case, the award had not been issued in the name of his Highness the Emir of Qatar. The Court of First Instance, by finding that “this award is conclusively invalid since this invalidity is related to public order”, not only applied the Court of Cassation’s decision, but also extended its scope to arbitral awards rendered outside Qatar.
The Court of First Instance decision of 7 December 2013 thus implies that Article 69 of the Qatari Code of Civil Procedure is applicable to any award regardless of (i) the institution conducting the arbitration and (ii) the seat of the arbitration, as long as it is subject to Qatar law.
It should be noted that before the Court of First Instance, the respondent argued (i) the lack of jurisdiction of the Court to know of the dispute since the arbitration was seated in Paris and (ii) the applicability of the New York Convention, ratified by the Qatar in 2002, and consequently that Qatari judges should base their decision on Article V.2 (b) thereof, pursuant to which national judges can refuse to enforce a foreign arbitration award if such enforcement is contrary to public policy.
The Court rejected the respondent’s arguments and held that the Qatari courts had the power to settle the issue because (i) the contract had been concluded and performed in Qatar and (ii) the arbitration was submitted to Qatari law.
These decisions are to be regretted because the Courts:
- Have clearly not taken into account the fact that the seat of the arbitration determines the procedural laws applying to the conflict, which should not be confused with the substantive law of the contract; and
- Omit the fact that an arbitral tribunal’s powers originate in the parties’ agreement, and not in the State or its courts.
It remains to be seen whether this solution will be upheld in the new Qatari arbitration law, which is currently being drafted.
In light of this trend, and until the new law is adopted , arbitral tribunals sitting in disputes involving Qatar should not forget, to ensure the efficiency of their awards, to mention that the latter are rendered in the name of his Highness, the Emir of Qatar!