Law No. 20 of 2021 on Mediation for the Settlement of Civil and Commercial Disputes: “Mediation Law”

Index

  • Preamble.
  • What is Mediation?
  • Scope of Law and disputes falling within the scope of the Law
  • Mediation Proceedings and Requirements of Mediator
  • Mediation Agreement
  • Mediation Initiation
  • How is the mediator selected?
  • Mediator's Prohibited Actions
  • Beginning of the mediation process, duties of the mediatior,, how to object to a mediator, and duration of mediation
  • Limitations of Mediator's Liability
  • Mediator's fees and determination and payment of fees
  • Court's request to settle the dispute through mediation
  • When does the court stop hearing the lawsuit, and what becomes of the judicial fees?
  • When does the court decide that the lawsuit is inadmissible for the existence of a mediation agreement?
  • Consequences of using mediation and impact on the lawsuit
  • Steps of Mediation Proceedings
  • Settlement Agreement
  • Procedures followed when reaching a settlement of the dispute
  • Rule of Res Judicata due to the existence of a Settlement Agreement
  • Confidentiality and Its Exceptions in Mediation
  • Permissible Disclosure Limits
  • Penalty in case any of the parties refuse to abide by the Settlement Agreement
  • End of Mediation Proceedings
  • Conclusion.

Mediation for the Settlement of Civil and Commercial Disputes

Preamble:

His Highness the Amir Sheikh Tamim bin Hamad Al-Thani issued Law No. 20 of 2021 on Mediation for the Settlement of Civil and Commercial Disputes, which came into force on the date of its publication in the Official Gazette.

The law consists of 33 articles that specify the mediation agreements in which its provisions apply, the mediation proceedings and its method, the requirements to be met by the mediator, whether a natural or legal person, and the procedures for dismissing a court lawsuit if the parties agree to settle the dispute through mediation and the procedures of the settlement agreement.

The State of Qatar has decided to move forward towards developing mechanisms for resolving civil and commercial disputes in an aim to create a more stable and advanced environment for resolving disputes and reducing congestion in the courts, in line with the emergence of mediation as a swift and effective means of resolving commercial and civil disputes in addition to arbitration. The State of Qatar is one of the first three countries to ratify the Singapore Convention, known as the Singapore Convention on Mediation, which entered into force on September 12, 2020.

Mediation is a process for discussing and resolving disputes, which most countries have resorted to in recent times due to its lower cost when carried out by a neutral party compared to arbitration when it ends with an agreement between the two parties. Therefore, it is a preferable bet, as its failure to end with a resolution does not cause any damages to any of the parties. However, when a resolution is reached, it will save a substantial amount of time, money and effort compared to alternative dispute settlement methods. Accordingly, mediation is a legal system in which the disputing parties choose a third-party mediator by mutual agreement, whether before or after the dispute, to help them arrive at a mutually acceptable settlement for their dispute, through facilitating discussions between the parties and providing proposals and recommendations to the best interests of the disputing parties in matters where mediation is permissible.

With that said, we shall begin to clarify the mediation-related provisions of the Law No. 20 of 2021 on Mediation for the Settlement of Civil and Commercial Disputes.

What is Mediation?

Article No. 1 of the Mediation Law defines mediation as “an amicable form of settling a dispute that parties can agree to hold on to or upon the competent court’s request.”

It is evident, therefore, that mediation is the resort of the conflicting parties to a third party to help them reach an amicable settlement of their dispute, which arose in respect with a certain legal relation – contractual or non-contractual – without the mediator having the power to impose an opinion or suggest a specific resolution to the dispute.

What is the scope of Mediation Law and what are the disputes falling within the scope of the Law?

Article No. 2 of the Mediation Law sets out its scope and states that it shall apply to any mediation agreement in any of the following cases: Mediations, wholly or partly, conducted in the State of Qatar, unless the parties agree otherwise; where the parties agree to apply the provision of the Mediation Law to their dispute; at the request of the court to settle the dispute by way of settlement; or the contract or agreement, subject matter of the dispute, specifies Qatar laws as the governing law.

Disputes falling within scope the Mediation Law

Mediation may be used in lawsuits in which conciliation is permissible. However, the Mediation Law does not apply to lawsuits in which conciliation is not permissible, as well as lawsuits involving Qatar Energy or any of the companies it establishes, holds shares in, or contributes to. Mediation Law also does not apply to companies based on the implementation of agreements of exploration, production sharing, or field development, and joint venture agreements in the field of petroleum operations and petrochemical industries, or any natural or legal person licensed by Qatar Energy to carry out any of the petroleum operations in accordance with the provisions of the Law No. 3 of 2007 On the Exploitation of Natural Resources, as well as any mediation or a specific conciliation according to other laws in force in the State. Also, Mediation is not permissible in tax disputes, or disputes in which the parties agree to resolve them by arbitration or any other method without resorting to the court. In addition, Mediation is not permissible in matters related to urgent and temporary cases and substantive and summary disputes regarding the execution, as well as the excluded cases, depending on the circumstances, in accordance with the provisions of Article No. 3 of Law No. 20 of 2021 on Mediation for the Settlement of Civil and Commercial Disputes.

What are the Mediation Proceedings and Requirements of Mediator?

Mediation proceedings were defined in Article No. 4 of Law No. 20 of 2021 which stipulates that mediation shall take place by holding one or more settlement sessions conducted by a mediator or an odd number of mediators to help the parties reach a resolution to their dispute, and the subject matter of the dispute must be specified and that solutions thereto shall be sought and proposed by the mediator to the parties in order to reach an amicable agreement to end the dispute. The mediator shall remain unbiased and does not impose any solution to the dispute on any of the parties.

Requirements that must be met by the mediator as specified in Article No. 5 of Law No. 20 of 2021 on Mediation for the Settlement of Civil and Commercial Disputes.

Here, it is necessary to differentiate between whether the mediator is a natural person or a legal person.

Requirements to be met by natural persons:

  1. Full legal capacity.
  2. Must not havebeen convicted with any judgment of a felony or misdemeanor involving breach of honor or dishonesty, even if redressed.
  3. Good conduct and reputation.
  4. Known for integrity, impartiality and experience.
  5. Must not have been discharged from a previous job as a result of a decision or a disciplinary action. The same applies to any register on which they’ve been listed and their professional license.

Requirements to be met by legal persons:

  1. Must be a private company or an entity of public benefit.
  2. Must not have been declared bankrupt by a final judgment.
  3. The company’s employees working in the area of mediation must satisfy the requirements for a natural person willing to operate as a mediator.

What is Mediation Agreement?

As per Article No. 5 of Law No. 20 of 2021, the mediation agreement is as a written agreement between the parties to the legal relation – contractual or non-contractual – to use mediation to resolve a dispute that has arisen or is likely to arise between them, whether included in a document signed by the parties or in their correspondences, such as letters, telegrams, or other means of communication that have evidential weight in accordance with the law, or a reference in a contract to the mediation clause, provided that the provision is explicit in stating that the mediation agreement is part of the contract. In accordance with the law, the mediation agreement shall not lapse upon the death of one of the parties, unless otherwise agreed.

The agreement shall be as follows:

    1. The agreement shall be precedent to any dispute, whether independent or contained in a specific contract regarding all or some of the disputes arising.
    2. It shall be subsequent to the dispute, even if a lawsuit was filed for the same.
    3. It shall be a written agreement, otherwise it is considered void. It may be an official or customary document, paper or electronic, or proven by judicial records.
    4. The mediation agreement must specify the dispute, the subject matter of mediation, appoint a mediator or mention the method of the mediator’s appointment, and indicate the language of the mediation.

How to initiate mediation

According to Article No. 33 of Law No. 20 of 2021 on Mediation for the Settlement of Civil and Commercial Disputes, mediation may be initiated with all its procedures through electronic means, and it shall have the same authority as written procedures.

How is the mediator selected?

As stated in Article No. 7 of Law No. 20 of 2021, a register shall be created for mediators, and the conditions, controls and procedures for registration are to be issued by a decision of the Supreme Judicial Council, and it is permissible to register the self-employed, specialized professional, arbitrators and others. And in accordance with Article No. 8 of Law No. 20 of 2021, on Mediation for the Settlement of Civil and Commercial Disputes, the parties may choose one mediator or an odd number of mediators, whether a legal or natural person from those registered on the List of Mediators or others who meet the necessary requirements for acting as a mediator. If the parties fail to agree on appointing a mediator, they may ask the competent court to appoint a mediator from the List of Mediators by virtue of an order on a petition.

Mediator's Prohibited Actions: According to Article No. 9 of Law No. 21 of 2021 the mediator when acting as a mediator in a dispute is barred from the following:

  1. Acting as arbitrator, expert or judge, or accepting to act as an agent in a litigation against any party involved in the mediation regarding the subject of the matter of the mediation or its derivatives, even after termination of the mediation;
  2. Giving testimony against a party to the mediation concerning the subject matter of the dispute, wholly or partially, even after termination of the mediation, without the permission of the parties or the concerned party, except when the testimony is related to a crime; and
  3. Acting as a mediator where any party is a spouse or relative up to the fourth degree.

When does the mediation process begin, what are the duties of the mediator,, how to object to a mediator, and what is the duration of mediation?

As stated in Article No. 10 of Law No. 21 of 2021, the mediation process shall begin as of the date on which the mediator accepts his duties. As per Article No. 11 of Law No. 21 of 2021, the mediator shall, within 10 days from the date of his selection or appointment, inform the parties in writing of his acceptance or rejection, and must, if any matter arises after commencing his duties as a mediator that affects his impartiality or independence, relinquish the mediation in writing. The parties may agree on the procedures for rejecting the mediator, and if an agreement is not reached, the rejection request shall be submitted to the court for decision within 5 days from the date of its submission. .The court may, upon ruling to reject the mediator, decide his entitlements or recover any fees or expenses paid to the mediator, in accordance with Article No. 11 of Law No. 20 of 2021 on Mediation for the Settlement of Civil and Commercial Disputes.

In such cases, an alternative mediator shall be appointed replacing the mediator who was rejected, dismissed, or stepped down, with the same conditions and procedures taken in appointing that mediator. The parties, after appointment of the alternative mediator, shall agree on the validity of the measures taken previously, and if an agreement is not reached, the alternative mediator shall have the right to take what he deems appropriate in this regard, as stated in Article No. 12 of Law No. 20 of 2021.

In the event of inability to perform the tasks or late performance by the mediator, or if the mediator stops performing his tasks leading to an unjustified delay in the mediation proceedings, and the mediator did not step down on his own, and the parties did not agree to dismiss him, the court may dismiss him at the request of any of the parties, and accordingly the court’s decision is final and shall not be subject to appeal, as stated in Article No. 13 of Law No. 20 of 2021.

The mediator must complete the mediation within a period not exceeding 30 working days from the date of commencing the settlement procedures, and he may extend this period for a future period with the consent of the parties, as stated in Article No. 20 of Law No. 20 of 2021 on Mediation for the Settlement of Civil and Commercial Disputes.

What are the Limitations of Mediator's Liability?

The mediator may not be held accountable for performing mediation functions unlessit indicates bad faith, collusion, or gross negligence, as stated in Article No. 14 of Law No. 20 of 2021 on Mediation for the Settlement of Civil and Commercial Disputes.

What are the Mediator's fees and how it is determined and paid?

The mediator is entitled to mediation fees for performing his duties, and the amount and method of payment shall be determined by mutual agreement between the parties. If an agreement is reached in this regard, the court shall determine the mediation fees, taking into account the effort exerted by the mediator, based on a petition submitted by the mediator himself or one of the parties to the court, with the parties bearing all kinds of expenses required by the mediator’s performance of his mediation fees, and such fees are due even if the parties did not reach a settlement of their dispute, as stipulated in Article No. 21 of Law No. 20 of 2021 on Mediation for the Settlement of Civil and Commercial Disputes.

May the court request the parties to settle the dispute through mediation?

Article No. 21 of Law No. 20 of 2021 on Mediation for the Settlement of Civil and Commercial Disputes, gave the court the right to request the parties to settle the dispute through mediation within a period to be determined by the court. Upon acceptance by the parties, and if a settlement is reached through the mediation and is legally notarized, the court shall remove the lawsuit from its roll for the end the litigation. If any of the parties object to the court’s request to settle the dispute through mediation, the court shall continue hearing the lawsuit.

When does the court stop hearing the lawsuit, and what becomes of the judicial fees?

The court may, upon hearing the lawsuit and before setting the date for adjudication and at any stage of the litigation, decide, based on the parties’ agreement, to stop hearing the lawsuit and refer it to settlement through mediation, in accordance with Article No. 16 of Law No. 20 of 2021, and if a settlement is reached, the party responsible for paying the judicial fees is exempted from paying them, as stipulated in Article No. 17 of Law No. 20 of 2021 on Mediation for the Settlement of Civil and Commercial Disputes.

The court may also order, at the request of one of the parties, to take interim and conservatory measures, whether before commencing the mediation proceedings or during their course, and this shall not be considered a waiver of adherence to the mediation agreement, as stipulated in Article No. 18 of Law No. 20 of 2021.

When does the court decide that the lawsuit is inadmissible for the existence of a mediation agreement?

The court shall rule that the lawsuit is inadmissible if the dispute is attached to a mediation agreement, in the event that the defendant brought that to the court. In such cases, the court shall fine the party filing the lawsuit twice the judicial fees unless the court decides that the agreement is null, void, cannot be implemented, or the mediation has ended with no agreement, within the period specified for mediation, in accordance with the first paragraph of Article No. 18 of Law No. 20 of 2021 on Mediation for the Settlement of Civil and Commercial Disputes.

Consequences of using mediation and impact on the lawsuit?

When mediation is used, the legal and judicial periods shall stop at  the beginning of the mediation proceedings and shall only continue after the end of the mediation, as stipulated in Article No. 22 of Law No. 20 of 2021 on Mediation for the Settlement of Civil and Commercial Disputes.

Steps of Mediation Proceedings

The mediator shall discuss and consult the parties collectively on the subject matter of the dispute and their requests and defenses, and take what he deems appropriate with an aim to arrive at an amicable solution. The mediator may also express his opinion if one of the parties asks him to do so. He may present the laws and judicial principles related to the dispute, and he may seek the assistance of an expert if the subject matter of the dispute so requires.

The mediator may also organize joint sessions with the parties collectively or with each of the parties separately, and he may disclose to the other party any information given to him by one of the parties, unless the disclosing party requires the mediator to treat such information confidentially, as per Article No. 23 of Law No. 20 of 2021 on Mediation for the Settlement of Civil and Commercial Disputes.

What is the Settlement Agreement?

It is the agreement reached as a result of the mediation, whether this agreement results in resolving the dispute between the parties, in whole or in part, as stated in Article No. 2 of Law No. 20 of 2021 on Mediation for the Settlement of Civil and Commercial Disputes.

What are the procedures followed when reaching a settlement?

The mediator shall draft a written settlement agreement within seven (7) days, as stated in Article No. 2 of Law No. 20 of 2021 on Mediation for the Settlement of Civil and Commercial Disputes. The settlement agreement shall include the following :-

  1. Names of the parties to the dispute, their details and addresses, and the lawsuit number (if any);
  2. Name and details of the mediator;
  3. Name and details of any other party who is required to agree to the settlement agreement;
  4. Summary of the subject matter of the dispute;
  5. Name of any appointed expert and his opinion;
  6. Detailed statement of the terms of the settlement as agreed by the parties.

In order to be enforceable, the settlement agreement must be drafted in a number of copies duly signed by the disputing parties, mediator, and any other party who is required to agree to the settlement, as stated in Article No. 24 of Law No. 20 of 2021 on Mediation for the Settlement of Civil and Commercial Disputes.

Within seven (7) days from signing the settlement agreement, it is the obligation of the mediator to deposit an original copy of the Settlement Agreement, Mediator Appointment Agreement, and the Mediator’s Acceptance of Appointment with the court’s clerk office. Upon the request of either party or the mediator, the settlement agreement shall then be notarized by the court. A notarized settlement agreement shall have the power of a writ of execution and it may not be subject to any further challenge or appeal, by any means, as stated in Article No. 25 of Law No. 20 of 2021 on Mediation for the Settlement of Civil and Commercial Disputes. The court has the power to refuse the notarization of the settlement agreement if the settlement is in violation of laws or public order; if the settlement was undertaken through deception or fraud; if either party has become incapacitated; if the subject matter is not in fact permissible to be mediated; or if there is any impossibility in implementing any of the provisions of the settlement agreement, as stated in Article No. 26 of Law No. 20 of 2021 on Mediation for the Settlement of Civil and Commercial Disputes.

When does the court issue a rule of Res Judicata due to the existence of a Settlement Agreement?

In the event that any of the parties to the notarized settlement agreement files a lawsuit on the subject matter of the settlement agreement, the court shall issue a rule of Res Judicata and impose a fine on the party who filed the lawsuit of ten times the fee for filing the lawsuit, provided that it is not less than QAR 20,000 and not more than QAR 50,000. In a lawsuit with multiple plaintiffs, the amount of the fine shall be divided equally among them, as stated in Article No. 27 of Law No. 20 of 2021 on Mediation for the Settlement of Civil and Commercial Disputes.

Is there a confidentiality obligation in mediation and what are its exceptions?

Information not permitted to be disclosed :-

The law provides for the confidentiality in mediation in two articles, namely Article No. 30 and Article No. 31 of Law No. 20 of 2021 on Mediation for the Settlement of Civil and Commercial Disputes, where it stipulates that the confidentiality of the mediation process includes the discussions, negotiations, and documents related to the mediation. Therefore, neither the mediator nor any party to whom any mediation-related information has been disclosed may disclose said confidential information to the court or to any third party without the consent of the disclosing party. This includes in particular the mediation contract request and the papers and documents related thereto, and the requesting party and the acceptance of the mediation request and the papers and documents thereto, as well as the opinions and proposals submitted by the parties to the dispute, the declarations and confessions given in the context of mediation, the deliberations and discussions between the mediator and the parties or from any party and the proposals provided by the mediator or any document prepared for use during the mediation procedures. Violation of the confidentiality obligation set forth in the law may expose the violator to a penalty of QAR 20,000 or 5% of the value of the dispute, whichever is higher, provided that the adjudicated amount does not exceed QAR 100,000. In addition, the court shall refer the dispute to another court’s circuit for adjudication, without the inclusion of the disclosed information, and all such disclosed matters in violation of the confidentiality obligation shall not be recognized by the court.

Cases in which disclosure may be made :-

The law permits the party to which the information is disclosed or the mediator to disclose the above information to the court, if several conditions are met, namely:-

  1. If it is established that the information disclosed was known before the mediation began.
  2. A court ruling obligating the parties to disclose such information for reasons related to state security, protection of persons, imminent danger, prevention of a crime, or if it is related to money laundering and terrorist financing.
  3. The disclosure is made to a lawyer to obtain his legal opinion.
  4. In the event that one of the parties to the dispute requests from the other party to resolve the dispute through mediation and the other party does not respond to this request, the requester may disclose to the court his request and the other party response, before the mediation initiation.

In addition, any party may disclose information for reasons related to proving or denying a claim regarding the mediator’s lack of impartiality or independence or the committion of a serious or deliberate mistake by the mediator. In such cases, the court shall consider the claim and issue a decision and refer the parties to another circuit for re-consideration. In all cases, the court will not consider any information disclosed to prove or deny any matter in the lawsuit, and the court may accept any evidence used during mediation.

What are the permissible disclosure limits?

Disclosure shall be limited to the extent required to prove its cause, and the court may restrict this disclosure or issue an order as to what it shall include, in accordance with Article No. 32 of Law No. 20 of 2021 on Mediation for the Settlement of Civil and Commercial Disputes.

What is the penalty in case any of the parties refuse to abide by the Settlement Agreement?

In the event that one of the parties refuses to abide by the settlement agreement made as a result of mediation and before litigation, the law gives the court the right to impose a fine on the non-complying of no less than QAR 1,000 and no more than QAR 10,000 and not exceeding a quarter of the value of the lawsuit, even if the judgment was issued in his favor, in addition to a compensation of five times the fees for filing the lawsuit and not exceing QAR 20,000 for the other party, even if the judgment is issued in his favor, without prejudice to any other expenses or compensation decided by the court for any of the parties to the lawsuit.

When do the mediation proceedings end?

As per Article No. 32 of Law No. 20 of 2021 on Mediation for the Settlement of Civil and Commercial Disputes, the mediation proceedings end in the following cases :-

  1. In case of the signing of a Settlement Agreement;
  2. In case any or all parties notify other parties in writing of their desire to discontinue the mediation;
  3. In case of the termination of the mediation deadline without reaching a resolution.
  4. Early termination of mediation if, after consulting with the parties to the conflict, the mediator finds that continuing the mediation procedures is infeasible.

The law provides that in the event that settlement is not possible, any of the parties shall have the right to file the dispute before the competent court, as per Article No. 29 of Law No. 20 of 2021 on Mediation for the Settlement of Civil and Commercial Disputes.

Conclusion

The State of Qatar, as always, is leading the way in the legal field and strives to keep pace with the latest legal developments at the international and domestic levels, especially in the fields of investment and trade, to create a more developed and stable investment environment. This will only be achieved by a developed and modern legal system that furthers the value of full and prompt justice. The cornerstone of any investment or commercial activity is finding alternative means to the resolution of disputes characterized by speed and accuracy in line with the nature of commercial and investment activity by giving the disputants the right to choose who shall settle disputes between them through several carefully organized legal mechanisms under the supervision of the judicial system. This constitutes an important guarantee that gives more confidence and leadership to the Qatari judicial system.