Qatar First Instance Investment and Trade Court Sets Precedent on the enforceability of a mediation clause pursuant to Qatar Mediation Law No.20/2021
In a recent and interesting development in Qatar, the First Instance Investment and Trade Court (“the Court”) issued a judgment ref: 5914 /2023 on 24 January 2024, relying on the provisions of Qatar Mediation Law No. 20 of 2021 enacted on 4 November 2021 wherein it dismissed a lawsuit based on a jurisdictional objection raised by our legal team due to the existence of a Mediation Clause in the contract.
Background of the Case:
Our Office represented a Defendant in a lawsuit filed by a Claimant before the Court seeking the award of certain amounts. The contract between the parties provided for a mediation clause which stated the following:
“Any dispute or claim (including non-contractual disputes or claims) arising out of or in connection with it or its subject matter or formation shall be referred to Mediation to be finally settled.”
The Court carefully deliberated on this argument, considering the provisions of the Mediation Law, specifically Article 18, which states that if a claimant submits a case in the court for which there is already a mediation clause, the court shall dismiss the case (if the defendant raises such challenge) and impose a fine on the claimant equal to double the Court fees.
In light of these legal principles, the Court considered that It was established from the documents and the settlement agreement dated 22/12/2021, that the parties agreed in clause 9 that "any dispute arising out of or in connection with it or its subject matter or formulation shall be referred to mediation for settlement or final settlement." which implies the parties' agreement to settle disputes that may arise in connection with the implementation of the settlement contract or related matters through mediation, indicating the existence of a mediation agreement governing the relationship between the parties. And that - according to the Court - It was clear from the documents that Claimant didn’t adhere to the provisions of this agreement, and the Defendant raised the jurisdiction challenge based on the mediation clause before submitting any defense in the substance of the case in accordance with Article 70 of the Civil and Commercial Procedures Law.
The Court's response to the jurisdictional objection and its implications for cases involving similar jurisdictional challenges will likely influence future litigation strategies. The judgment, therefore, becomes not just a resolution to a specific dispute but a precedent for similar cases in the future.
Conclusion:
The recent judgment is a milestone in Qatar's judicial precedents. Its impact extends beyond this specific case, influencing legal practices and contractual negotiations. It clarifies the enforceability of the mediation clause and establishes one of the first precedents that strengthens the role of mediation in Qatar.
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