A Q&A guide to construction and projects law in Qatar.
The Q&A gives a high level overview of the main trends and significant deals; the main parties; procurement arrangements; transaction structures and corporate vehicles; financing projects; security and contractual protections that funders require; standard forms of contracts; risk allocation; excluding liability, including caps and force majeure; contractual provisions covering material delays and variations; appointing and paying contractors; subcontractors; licences and consents; projects insurance; labour laws; health and safety; environmental issues; corrupt business practices and bribery; bankruptcy/insolvency; public private partnerships (PPPs); dispute resolution; tax and mitigating tax liability; the main construction organisations; and proposals for reform.
To compare answers across multiple jurisdictions, visit the construction and projects Country Q&A tool.
This Q&A is part of the PLC multi-jurisdictional guide to construction and projects law. For a full list of jurisdictional Q&As visit www.practicallaw.com/construction-mjg.
On 2 December 2010 FIFA announced that Qatar had been successful in its bid to host the FIFA 2022 World Cup™. This award was based partly on Qatar's undertaking to FIFA to develop its infrastructure to support the event, consistent with the Qatar National Vision 2030. The main trends in the construction sector are therefore to:
Develop transport infrastructure, for example, roads, metro/rail, an international airport and a major sea port.
Generate a 21st Century residential and hospitality environment to support the anticipated significant population increase.
Create a range of world class sporting venues (such as soccer stadia) to secure Qatar's future as a venue for global sporting events.
Qatar's ambition is not limited to sporting and infrastructure development, it is also progressing with an impressive range of cultural, academic and commercial projects. The Qatar Museums Authority has announced a long-term programme for a range of high quality museums. Other projects include shopping malls, medical facilities and energy projects. A few of the high-profile projects which are either underway or have been announced are as follows:
New Doha International Airport (NDIA). Now nearing completion, a new airport on a 22 square kilometre site, including:
a passenger terminal capable of handling up to 50 million passengers per year;
a 750,000-tonnes-per-year cargo terminal;
a free trade zone;
a business park.
Qatar Rail and Metro Project. The first phase includes four urban metro lines and 300 kilometres of track. 129 kilometres of track will focus on the populated coastal stretch of the country, linking Al Khor in the north down to Al Wakra and Messaieed in the south. Later phases are planned to connect Qatar internationally with its neighbouring countries.
New Doha Port Development Project. A major new sea port to the south of Doha, with annual capacity to accommodate six million 20-foot equivalent units as well as a naval component, including five general cargo and four container terminals and berths.
Lusail Real Estate Development. A mixed use development of 38 square kilometres featuring housing, offices, shops, four exclusive islands and 19 multi-purpose residential, mixed use, entertainment and commercial districts. The population of Lusail is planned to eventually reach 450,000 people.
Energy City. An integrated energy hub aiming to enhance the Gulf region's ability to capture critical revenue streams from hydrocarbons and act as a nucleus for the core elements of the Middle East's ever growing oil and gas industry.
Msheireb Downtown Doha. A large urban regeneration complex by Msheireb Properties in central Doha, designed to reflect the architectural heritage of Qatar.
Doha Bay Crossing. The Public Works Authority is in the early stages of planning a crossing of Doha Bay from the new airport to West Bay and beyond to The Pearl and Lusail. Options are thought to include: a causeway across the Bay; a tunnel under the Bay; or a tunnel under the Corniche. However, these have not yet been formally announced.
Doha Festival City. Entertainment and leisure complex with an Ikea store, other retail outlets, hotels and a convention centre.
Healthcare facilities. Five primary healthcare centres across Doha, plus four hospitals at Hamad Medical City.
Barwa Financial District. Financial complex over 71,600 square metres in West Bay Business District, to serve the global, regional and local financial sector.
Al Khor Space City. There are plans to establish a Space City near the Al Khor airstrip, including a university in co-operation with the US National Aeronautics and Space Administration (NASA), a research facility dedicated to satellite and space sciences, and a science museum.
The main parties to a project in Qatar are typically:
The client/employer.
The main contractor.
The lead designer (engineer).
The lead designer is either an architect or engineer and is usually referred to, in both contracts and in the law, as the "engineer".
The majority of projects are public sector related and funded by the State of Qatar. In addition, the oil and gas sector has seen some very large projects, some of which are still ongoing. Key clients are government departments (for example, the Public Works Authority (Ashghal)) and other public sector entities (for example, Qatar Rail, Supreme Committee for Qatar 2022, Qatar Petroleum (QP), Qatar Foundation (including subsidiary organisations such as Msheireb Properties), Qatargas, Rasgas, Barwa and Lusail Real Estate Development Company (a subsidiary of Qatari Diar)). Almost all of the work is state funded, outside the oil and gas sector and private sector commercial development.
Contractors have so far been medium to large size international and local firms, forming local joint ventures. Designers have predominately been international consultancy firms, with one or two notable local players in the market. However the scale of the major projects now under procurement in Qatar is generating a new approach, with contractors and consultants forming larger multi-party consortia. These consortia consist of:
Local contractors.
Some of the world's largest international contractors.
International multi-disciplinary design, engineering and construction consultancy companies.
Procurement arrangements tend to vary according to the size of the project rather than its parties. Most small and medium to large projects tend to be either:
Engineer, procure and construct (EPC/turnkey).
"Traditional" procurement with design pre-arranged by the client.
Build-only contracts with a single contractor.
On very large and major projects, other arrangements are considered. For example, the NDIA has been procured on a construction management basis (that is, the NDIA Steering Committee, as client, directly engages a construction manager; the large number of contractors and consultants carrying out the works and design packages are each engaged separately under a direct contract with the client). Details of the procurement structures for the rail and port projects are, at the time of going to press, awaited with interest in the market.
Clients are often single entity government departments or public sector related entities (including subsidiary entities and project-specific companies established for the procurement of the project). For smaller projects, local contractors and consultants have the technical and volume capacity to transact alone as single legal entities.
For mid-size and larger projects, where international capacity and expertise are required, compliance with Law No (13) of 2000 for the Regulation of Foreign Capital Investment in Economic Activity generally (subject to a few specific exceptions) has the effect of requiring non-Qatari contractors and consultants to form partnerships with Qatari partners if they wish to be free to bid for work generally. Vehicles for contracting parties are therefore usually joint ventures, which can be either incorporated to become a single company (LLC), or based on a contractual joint venture agreement.
Where the public sector engages contractors who have formed a contractual joint venture arrangement, "joint and several" liability will be required from the joint venture partners to the public sector entity. Additionally, enquiries may be made by the public sector client into the contractual arrangements and risk-sharing between the joint venture partners. This can include full disclosure of (and sometimes the client's approval of) the joint venture agreement. Parent company guarantees will usually be required from all joint venture partners that are subsidiaries.
Major oil and gas, petrochemical and integrated water and power projects have been project financed, with the first closings having been achieved many years ago. Outside of those sectors, most of the large development projects in Qatar are government driven and government funded, and this is the most common form of financing. Bank debt and foreign investment funds have been a source of funding for some private sector property development.
Where private sector project finance is used in Qatar, it comes from a variety of sources. Both international and local banks have been involved in financing projects in Qatar, with both conventional and Islamic financing structures being used.
Corporate borrowings from banks licensed by the Qatar Central Bank (there are 18 at the time of writing) must be guaranteed by the borrowing company's shareholders, except:
In the case of public companies.
Where the Qatar Central Bank specifically waives this requirement.
In cases where banks fund private development, lenders will also take traditional mortgage security or, where this is not legally possible, will typically take an assignment of contractual rights. For example, this can happen where the borrower's legal interest in the land being developed is not registrable until the development has been physically completed.
Public sector entities governed by Law No (26) of 2005 establishing a Law Organizing Tenders and Auctions (Public Tender Law) must, amongst other things, obtain tender bonds from bidders. Clients often require an on-demand performance bond (usually amounting to 10% of the contract price) from the successful bidder. Advance payments are common, and are made against on-demand bank guarantees. Retentions of up to 10% of the contract price and robust forms of parent company guarantees are also commonly required as performance security.
Collateral warranties, whether from main contractors and consultants in favour of third parties, or from sub-contractors and sub-consultants in favour of the client, are uncommon in the Qatar market and are seen as onerous by both contractors and consultants. However, on public works projects they are often required to be entered into by sub-contractors and sub-consultants in favour of Ashghal.
Small and private sector projects have no universal standard form of contract, and often use untailored agreements, which may have been "carried forwards" from previous projects. The quality of contract documentation is often poor. Older versions of standard form contracts issued by Qatar Petroleum are sometimes amended and used.
Medium to large public works projects procured by Ashghal tend to use Ashghal's own bespoke forms, which were revised and reissued at the end of 2010.
Public sector projects (other than those procured by Ashghal) often use their own bespoke forms of contract which have been prepared either by in-house lawyers or external law firms. These may be highly amended versions of the International Federation of Consulting Engineers (FIDIC) Silver or Red Book contracts, but other forms are also used. On major projects, bespoke and "project specific" forms are prepared.
On public sector projects of all sizes, contract terms with the client are rarely negotiable for main contractors and consultants. Sub-contractors and sub-consultants may sometimes be able to negotiate on a few points, but will typically be required to accept "back-to-back" terms, including "pay-when-paid" clauses.
Contracts in Qatar commonly provide for a high level of risk transfer to contractors and consultants. However, the full extent of risk transfer is often unclear due to the poor drafting of contract amendments or particular conditions. The key categories of risk are:
Time. Tight deadlines are often set in the contracts, and provisions for granting extensions of time are often vague or discretionary. Where extensions of time are allowed, they usually only provide for relief from liquidated damages and may not allow claims for associated loss and expense during the extension period. Provisions relating to client obligations to respond to requests for approvals or instructions can also allow extensive discretion for the client or engineer. Time-bar clauses for contractors challenging client decisions can be very tight, and missing the deadline often expressly excludes any further rights.
Quality. Specifications and requirements can be vague and subject to client instructions which are deemed within the agreed scope. Specifications often allow a wide discretion to the engineer regarding testing and approvals.
Cost. Pricing can be difficult when time and quality provisions are unclear in the legal terms and conditions. Delays in the certification of payment applications and the payment of invoices are also very common.
Contractors and consultants can sometimes help to mitigate these risks by preparing and incorporating a detailed programme into the contract, showing not only the time for each phase of works or services, but the time allowed in the programme for:
Issue of client information/design.
Site access requirements.
Consultations and approvals.
Similarly, attempts can be made to put some "flesh on the bones" of skeleton "employer's requirements" documents to help clarify the detail and expectations of the scope of work. Meticulous contract administration and record keeping will, as always, greatly assist in managing many risks throughout the contract period. Risk pricing can also play a part in the risk-management process, but this itself creates a risk of making uncompetitive tender proposals in a highly competitive market.
Generally, parties enjoy freedom of contract under Qatar law. Express terms which either exclude, cap or pre-estimate damages will in most cases be binding and enforceable between the parties. Some exceptions to this include:
Under Article (259) of Law No. (22) of 2004 the Civil Law, liability resulting from "deceit or gross mistake" cannot be limited or excluded.
Under Article (711) of the Civil Law contractors and designers give a joint guarantee for ten years from project completion (known as "decennial liability"). This strict liability covers the "total or partial collapse or fault in the buildings … even if the collapse or fault has resulted from a defect in the land itself", provided that the defect threatens its "sturdiness or safety". Under Article (715) of the Civil Law this liability cannot be contractually limited or excluded, and any attempt to do so will be void.
Under Article (171)(2) of the Civil Law, a court (or arbitral tribunal) can, after weighing up the interests of the parties, reduce an "exhausting" contractual obligation to a "reasonable margin" if:
"public exceptional incidents" occur which could not have been expected; and
the occurrence of those incidents makes an obligation "though not impossible but exhausting to the debtor and threatens him with grave loss".
It is not entirely clear how this principle might be applied in practice, but any attempts to contractually exclude its application will be void.
Under Article (266) of the Civil Law, where damages are pre-estimated or liquidated, the agreed amount may not be due if the debtor (that is, the contractor or consultant) can show that either:
no loss has been suffered by the innocent party;
the level of the pre-agreed damages were "exaggerated to a high degree"; or
the obligation has been partially performed.
In those instances a judge (or arbitrator) can reduce the compensation due. Any contractual term attempting to exclude this principle will be void.
However, the converse does not apply for a creditor of liquidated damages. Article (267) of the Civil Law provides that if the creditor's loss is greater than the pre-agreed damages, he cannot claim a higher amount unless he can show the loss arises as a result of the debtor's "deceit or gross mistake".
Liability for liquidated damages for delay is often capped at somewhere between 5% to 10% of the contract price. Overall contractual liability is often capped, depending on the nature of the work, somewhere between 100% to 200% of the contract price. The following liabilities or indemnities are sometimes outside of the overall contractual liability cap:
For intellectual property rights.
For death and personal injury.
For property damage.
Certain liabilities cannot be contractually capped (see Question 9).
Liquidated damages are commonly applied to any delay in completing work under contracts for both contractors and consultants. Increasingly we are seeing liquidated damages being applied to "mobilisation" and "key personnel" clauses for failing to either mobilise on time, or supply and maintain the agreed named personnel.
Force majeure provisions are common in contracts and are generally enforceable. However, unclear drafting often makes it difficult to establish with any certainty the extent to which the clause is applicable.
Article (258) of the Civil Law allows the parties to contractually agree that the debtor (that is, the contractor or consultant) will be liable for the consequences of force majeure. Therefore, if a contract term transfers this risk, it will be generally binding and enforceable.
However, under Article (171)(2) of the Civil Law, a debtor can apply to the court to have his contractual obligation reduced to a "reasonable margin" in certain "force majeure type" scenarios (see Question 9). This specific principle in Article (171)(2) can be applied notwithstanding the general principle of freedom of contract or Article (258) of the Civil Law, and will prevail over any contractual terms to the contrary.
With particular regard to the construction industry, Article (700) of the Civil Law provides that contractors cannot avoid or vary their contractual obligations and agreed terms as a result of price increases in the market (for example, raw materials, labour and so on) which were either unforeseeable or were outside his control. However, this provision is also subject to Article (171)(2) of the Civil Law.
"Time" risks are specifically considered in Question 8. Provisions for extensions of time do not always identify the specific events or circumstances under which a contractor or consultant is entitled to an extension of time so that they can avoid paying damages for the delay. Contract provisions typically refer to circumstances which "arise through no fault of the contractor", which are then subject to the client's or the engineer's discretion in allowing an extension of time to be granted. The scenario which commonly arises in practice, where multiple factors and parties actually cause the delay, is rarely provided for in contracts. However, the civil law principle of equitable allocation of liability will apply in most cases in dispute. Also, there are some provisions in Qatar law regarding the application of liquidated damages, which may assist contractors/consultants in this respect (see Question 9).
Historically, provisions for material variations have been quite vague, although recent public works contracts now contain more detailed procedures for this. These often give the client or engineer substantial discretion regarding price, additional time and so on. Disagreements regarding these provisions are sometimes covered by escalation-type dispute resolution procedures (that is, procedures with various increasing management levels to which the matter can be referred for "amicable resolution" before resorting to the courts or arbitration). These are typically subject to tight time-bar provisions for challenging the outcome at each stage.
Public sector work is often tendered on a basis that requires full compliance. Qualified bids may in some cases be acceptable if specified in the request for proposals. However, the qualifications (whether legal or technical) must usually be clearly specified and priced as part of the tender submission. Exceptionally, some negotiation can sometimes take place with public sector entities, particularly where the required services are of a universal nature. This may be the case where there is very little competition in the international market (for example, professional services agreements for iconic architecture, innovative engineering and other design solutions). Greater negotiation takes place for private commercial projects (see Question 15).
On public sector projects, selection is usually by tender in accordance with the Public Tender Law (see Question 6). On private sector commercial projects, selection and appointment is commonly the result of:
Personal contacts.
Pre-existing relationships.
Recommendations.
Local and international reputation.
In these cases, terms and conditions are more negotiable than on public sector projects.
Following selection, appointment is usually by a letter of engagement or services agreement. Proposal documentation submitted by the successful bidder (as part of the tender process) can sometimes be incorporated into the contract and impose binding obligations. The contractual liabilities are described in Question 10.
The distinction between local and international projects for the appointment of construction professionals is broadly as set out in Question 7.
Payment is usually in arrears subject to certification by the client or engineer. Payments are commonly "milestone" based. Advance payments for contractors and consultants are common though these are always subject to an on-demand bank guarantee. Problems can arise with provisions in the guarantees and in the associated contracts concerning how the outstanding balance of the guarantee reduces as the advance payment is repaid, particularly where that reduction relies on some action by the employer. These provisions should be checked carefully.
Payments to contractors and consultants are usually made directly into a bank account, which must be in Qatar.
Although there are a few provisions in the law that may assist with securing payment, they are vague and difficult to enforce in the courts. These cannot therefore be relied upon with certainty. Long delays in payment are common on most types of projects.
Public sector entities often rely on cash-flow from the Ministry of Economy and Finance (MoEF) and contracts sometimes contain provisions making payment dependent upon receipt of the client entity's cash-flow from the MoEF. Failure by the client to pay invoices (even if certified) will sometimes expressly prohibit the contractor or consultant from suspending work. Due to the general concept of freedom of contract, clear express terms of this nature, even if potentially onerous on the contractor or consultant, are likely to be binding and enforceable.
In public sector contracts, interest for late payment is sometimes provided for. However, it is often expressly provided in the agreement that interest is not payable where the reason for late payment is a delay in funding from the MoEF to the client.
Sub-contracts and sub-consultancy agreements are typically wholly "back-to-back" with the main agreement, with full risk pass-down and "pay-when-paid" clauses.
Sub-contractors and sub-consultants must usually comply with (and not put the main contractor/consultant in breach of) the main agreement. Indemnities to the main contractor/consultant are sometimes incorporated in connection with this obligation.
Sub-contract agreements are more frequently negotiated than main agreements, particularly in terms of:
Liability caps.
Levels of liquidated damages for delay.
The general allocation of the share of liability.
All entities carrying on business in Qatar must be properly registered with the Ministry of Business and Trade.
Engineering related activities in Qatar are governed by Law No. (19) of 2005 the Engineering Law. Each individual or each firm performing engineering works in Qatar must obtain a licence from the Engineering Committee of the Urban Planning and Building Development General Authority (Engineering Committee). The requirements for obtaining an engineering licence are extensive and include:
Minimum numbers of staff.
Levels of qualifications.
Years of experience.
Size of office space.
Engineering consultancy works are widely defined as works involving the following matters:
Preparation of architectural, construction, survey and planning drawings.
Preparation of plans and designs.
Supervision of execution.
Rendering of advice.
Conducting of feasibility studies.
Cost estimation.
Cost accounting.
Management of projects.
A firm can register as an International Engineering Consultancy or Local Engineering Consultancy.
Exceptionally, exemptions are available to the above engineering licensing requirements. International engineering offices may be exempt if they are contracted to provide certain distinct technical specialities that either:
Are not available in Qatar.
Require particular technical experience for development purposes.
A further possible exemption may apply under Article (3) of Law No (13) of 2000 (Foreign Investment Law). This allows a branch of a foreign company to be registered in Qatar if it has been awarded a contract in Qatar to render a service of public benefit. If the entity is deemed to be an engineering consultant, the Engineering Committee can grant an exemption from acquiring a full licence.
Drawings submitted for approval by municipal authorities must be signed by local registered engineering practices.
The required licences and consents will vary according to the nature of the project, its location, and so on. Below is an indicative, but non-exhaustive, list of permits that may be required:
Planning permission from the Municipality.
Preliminary approval by the concerned Municipality to open a file.
Fire safety clearance from the Civil Defense Department (CDD).
Clearance for road design and access from the road construction department at the Urban Planning and Development Authority (UPDA).
Clearance for power and water service delivery from the Qatar General Electricity and Water Corporation (Kahramaa).
Clearance for telecom service delivery from Qatar Telecom (QTEL).
Clearance from the building permit department of the UPDA.
Final building permit approval from the Municipality.
Public announcement of the construction project at the Municipality.
Fire safety approval from the CDD.
Certificate of completion from the Municipality.
Registration of the building at the Municipality.
An engineering office is required to have certain insurances, particularly professional indemnity insurance, in order to be registered as an engineering office in Qatar. Vehicles must also be insured.
Other insurances which a commercially prudent consultant or contractor will carry, and which are commonly required in contracts, are as follows:
Employer's liability insurance.
Third party liability insurance.
Contractor's all risks insurance.
Clients now increasingly ask to be a "named insured" on project-specific policies.
Qatari nationals are to be given priority over non-Qatari nationals when an employer is seeking to fill a role. This practice is known as "Qatarisation". There are no particular requirements for hiring a Qatari national.
As a result of the practice of Qatarisation, an employer must obtain permission from the recruitment committee at the labour department of the Ministry of Labour and Social Affairs before employing foreign employees. Once obtained, the employer must apply for a work visa so that the employee can enter Qatar. Within seven days of the employee's arrival into Qatar, the residence permit procedure must be commenced so that the employee can work and reside in Qatar. Work visas and residence permits can be applied for and granted for periods of either one, two or three years and are renewable subject to application to, and approval by, the authorities during the course of the employment in Qatar.
The vast majority of employees in Qatar, particularly those engaged in connection with the construction industry, are subject to Law No. (14) of 2004 (Labour Law). One of the few exceptions to this applies to employees of governmental entities, who are instead subject to Law No. (8) of 2009 (Human Resources Law).
Although not strictly a labour law, Law No. (4) of 2009 (Sponsorship Law) is also relevant in relation to employee sponsorship arrangements. This applies to all non-Qatari nationals working and residing in Qatar.
There is no requirement to pay statutory redundancy pay in redundancy situations. If employees are employed for more than one continuous year, then under the Labour Law they are entitled to receive an end of service gratuity benefit for each complete year of service. Any partial year of service is calculated on a pro-rata basis. The calculation is based on the employee's last basic salary received (that is, the employee's salary excluding any allowances or benefits).
Specialist advice should be taken where an employer provides a pension scheme for employees. The law regarding the payment of an end of service gratuity is different and more complicated in these circumstances.
Part 10 of the Labour Law contains a range of health and safety related obligations, requiring an employer to:
Provide employees with information concerning the precautionary measures that have been put in place to protect them from work-related injury or disease.
Inform employees at the start of their employment about any occupational hazards.
Provide employees with first aid facilities and carry out regular medical check-ups.
Several Ministerial Decisions relating to employees' health and safety have been issued. Ministerial Decision No. (20) of 2005 is particularly relevant to the construction industry. This sets out the employer's general obligation to ensure:
That its workplace is safe for its employees.
That safe systems for work are in place.
A list of penalties for non-compliance with the health and safety law can be found at the end of the Labour Law, which include fines and/or imprisonment. The level of fines will depend upon the obligation breached and will be multiplied by the number of employees affected by the violation(s).
The Supreme Council for Environment and Natural Reserves (SCENR) and the Ministry of the Environment are the competent authorities for environmental protection related matters in Qatar. There are a range of environmental laws but two of the most relevant are:
Law No. (30) of 2002, Law of Environment Protection (Environmental Protection Law) and the Executive Regulations under Ministerial Decision No. 4 of 2005. These provide that all plans for public and/or private development projects must be submitted to the authorities for approval.
Law No. (4) of 1983 concerning Exploitation and Protection of Aquatic Life in Qatar provides that any plant, laboratory and factory waste, sewage water, chemical and petroleum substances, ship oils, and any other liquids that may cause harm to aquatic life may not be discharged into fishing water or internal water without the written approval of the competent department.
Environmental concerns are increasingly prominent and gaining more importance in Qatar. As a result, the role of the environmental authorities is expanding, especially in the approval process for construction projects. Although we are not aware of any particular proposed legislation, it is expected that further environmental legislation will be enacted in the coming years. It is therefore recommended to liaise with the relevant authorities at the early stages of the project to ensure compliance with the latest obligations.
Environmental impact assessments may be required for some projects. This will depend on the specific project, and so applications should be made to the authorities on a project-by-project basis.
Sustainable development is gaining increasing attention in Qatar. Several projects are aiming to meet sustainable standards, for example, the central Doha regeneration project for Msheireb Properties. In general, US Leadership in Environmental Energy and Design (LEED) standards are the prevailing rating system. However, Qatar has recently developed its own sustainability rating system (Qatar Sustainability Assessment System (QSAS)), which may in the future increasingly be specified for projects.
New buildings do not need to meet carbon emissions or climate change targets.
The rules prohibiting corrupt business practices and bribery include:
Decree No. (17) of 2007. This ratified the United Nations Convention against Corruption. States who are party to this convention are obliged to adopt legislative and other measures to establish the act of bribing a public official as a criminal offence.
Public Tender Law. Governmental entities and bidders on public sector contracts must comply with anti-corruption laws and ethical standards of integrity and transparency. Contracts must be revoked in circumstances where either:
the contractor commits fraud or deception in the course of performing the contract; or
the contractor directly or indirectly bribes a public official.
The Human Resources Law. This applies to governmental bodies and civil servants (individuals working within these governmental bodies).
The term "governmental body" widely applies to ministries, authorities and public institutions. There is no distinction within the law as to the amount of ownership or interest that needs to be held by the government in an entity for that entity to be considered a governmental body.
A civil servant is prohibited from "accepting presents, gifts, gratuities, grants, cash, or others, directly or indirectly, in exchange of or as a result of work related to his position in order to accomplish an interest for another". An offence is committed if a civil servant accepts a present, gift, gratuity, and so on, as a result of his work in order to achieve something for another. The offence is committed by the civil servant accepting the present, gift, gratuity, and so on, and not by the party giving it. The offence crystallises if the present, gift, gratuity, and so on, is given in exchange for, or as a result of, the civil servant's work in accomplishing the interest for another.
Articles (140) to (147) of Law No. (11) of 2004 (Penal Code). This deals specifically with the offence of the bribery of public officers.
The definition of a public officer is much wider than that of a civil servant and includes: "employees in the ministries, the other governmental corps and public organisations and institutions … [and] … all other employees in private institutions and associations, companies and co-operative associations, if one of the ministries or one of the other governmental corps or public institutions or organisations participate in it".
It is an offence for a public officer: to ask for, or accept (whether for himself or another party) any money, benefit or promise. It is also an offence for an individual to offer the public officer any money, benefit or promise in return for the public officer to do something that is related to his position as a public officer, whether or not the act requested actually falls inside the scope of the public officer's duties. The offence carries a penalty of up to ten years' imprisonment and a fine equivalent to the value of the bribe (but not be less than QAR5,000 (as at 1 April 2012, US$1 was about QAR3.6)). It is also an offence to facilitate payments.
Emiri Decision No. (75) of 2011. This established the Administrative Control and Transparency Authority in order to achieve transparency and act against corruption in government agencies and private companies contracted to provide public services. The Authority has powers including among others:
to access data and information;
to monitor and investigate in accordance with the law;
to request to punish an employee that hides, refrains from providing with or refuses to disclose data to a member of the Authority.
See above, Rules.
In Qatar, insolvency is mainly dealt with in Law No. (27) of 2006 issuing the Commercial Law (Commercial Law). The relevant provisions can be found under Title Six (entitled "Bankruptcy and Preventive Conciliation"). Below is an indicative but non-exhaustive list of some of the other provisions that govern insolvency and preferential claims:
The Civil Law.
Law No. (5) of 2002 (Commercial Companies Law).
The Labour Law.
Law No. (40) of 2002 (Customs Law).
Qatar's insolvency law provides that any contracts executed by a company prior to a declaration of bankruptcy remain valid, unless they are contracts for personal services. That being the case, a contractual provision allowing an employer, in the event of the contractor's bankruptcy, to terminate the contract for the contractor's default, and complete the work itself, will be valid.
So far there has not been any trend towards PPP procurement as generally understood in Europe and the US. We are aware that consideration is currently being given to the possibility of using some kind of PPP-type arrangements in the future.
There is no legislation which specifically applies to PPPs.
PPPs are not common in Qatar. Therefore, there are no standard forms of PPP project agreement or related contracts.
Litigation in the Qatar courts remains the usual formal dispute resolution method on public sector contracts. Where this is the case, proceedings are carried out completely in Arabic and all documentation presented to the court must be translated into Arabic.
Most public sector entities must obtain approval from a very senior level, often Ministerial, before an arbitration agreement is binding on that public sector entity. Where arbitration is mentioned in public sector contracts it therefore often provides that, in the event of a dispute, the parties may decide to put the matter to arbitration instead of court proceedings, if it is agreed at that time.
There are no specialised construction courts in Qatar. Construction disputes are resolved by the civil courts, often with court appointed experts (from an internal panel) advising the judge.
Where arbitration is provided for in a contract, the relevant institutions are normally either:
Qatar International Centre for Commercial Arbitration.
International Chamber of Commerce (ICC).
The specified seat of the arbitration is usually Doha. However, in exceptional cases we are aware that seats such as London, New York and Geneva have been agreed.
Contracts sometimes have "escalation-type" provisions for dispute resolution, providing for multiple stages to which the matter in dispute can be referred before the parties resort to the formal procedures as noted in Question 32. This may include, for example:
Referral to the engineer.
Referral to a mutually agreed and appointed expert.
Referral to meetings at the local management level.
Referral to meetings between senior management (possibly at CEO level).
ADR methods such as conciliation, mediation and adjudication are not yet commonly recognised in Qatar, although we are aware that interest in these methods is increasing as the latest round of major projects are being tendered and procured.
Construction companies are not subject to any specific taxes particular to the industry sector.
Article (11) of Law No. (21) of 2009 (Income Tax Law) provides for a withholding tax of 7% on non-resident interest income, commissions, brokerage fees and other payments made to non-residents for services carried out partly or wholly in the State of Qatar. A rate of 5% applies to "technical fees" which we understand to include fees for design consultancy services.
Circular No. (3) of 2011 allows for an application to be made to the MoEF in order to include a "gross-up" provision in an agreement between a non-resident individual or company and a Qatar-incorporated company. It is still unclear as to who can benefit from this exemption. However, when this is clarified, it could amount to a five to ten-year exemption on withholding tax. Presently, there are no tax incentives to carry out regeneration projects.
See Question 18.
To our knowledge, there are currently no proposals concerning the reform of construction or projects law.
We are aware that there are ongoing discussions concerning a review of the law and procedures for dispute resolution in the construction sector. Generally, the planned pace and extent of infrastructure development means that it is likely new laws and regulations will be passed in the near future. There is often not a long lead time before the announcement of a new law and its implementation. Drafts of new laws are not always subject to public consultation.
Main activities. One of the main organisations of interest to western contractors or consultants is the Society of Construction Law (Gulf) (SCLG). Several British professional bodies and organisations from the construction sector have some representation in Qatar (for example, the Chartered Institute of Builders (CIOB)). Contact can be made with the relevant organisation in the UK to establish local contact details in Qatar.
T +974 4459 8980
F +974 4459 8961
E julie.tuck@snrdenton.com
W www.snrdenton.com
Qualified. England and Wales, 2001
Areas of practice. Construction.
Recent transactions
T +974 4459 8963
F +974 4459 8961
E julian.pope@snrdenton.com
W www.snrdenton.com
Qualified. England and Wales, 1977
Areas of practice. Construction.
Recent transactions
T +974 4459 8999
F +974 4459 8961
E safwan.moubaydeen@snrdenton.com
W www.snrdenton.com
Qualified. Jordan, 1987
Areas of practice. Qatar law (corporate and regulatory).
Recent transactions
T +974 4459 8970
F +974 4459 8961
E ben.moylan@snrdenton.com
W www.snrdenton.com
Qualified. England and Wales, 2002
Areas of practice. Banking and property finance.
Recent transactions
T +974 4459 8967
F +974 4459 8961
E hannah.kennett@snrdenton.com
W www.snrdenton.com
Qualified. England and Wales, 2004
Areas of practice. Employment and labour law.
Recent transactions
T +974 4459 8994
F +974 4459 8961
E natalie.mackay@snrdenton.com
W www.snrdenton.com
Qualified. Paralegal
Areas of practice. Construction.
Recent transactions
