Letters of the Law: ‘J’ is for Jurisdiction
A to Z of Construction Law in Qatar Series
The first step when you cannot resolve your dispute is the “jurisdiction” clause in your contract. In some contracts the jurisdiction clause has been ferociously reviewed, considered and negotiated. Other contracts completely omit to mention jurisdiction at all.
You will find a jurisdiction clause in all standard form construction contracts.
Jurisdiction is the authority of a person or body to make a decision on a matter over which it presides, and the extent of that authority. In the construction contract it will be a court or a arbitral tribunal which has “jurisdiction” to determine disputes arising from that contract. The contract should also specify the geographical location of the court or tribunal having jurisdiction.
Your jurisdiction clause could be any of the following: The Court of the State of Qatar; the Qatar International Court and Dispute Resolution Centre (QFC Court); arbitration with the seat in Qatar; arbitration with the seat under the Qatar Financial Centre; court in a geographical location outside of Qatar; or arbitration seated in a geographical location outside of Qatar.
Those possibilities are confusing enough, but to add another variable: the law which applies to your contract need not be the law prevailing in geographical location of the jurisdiction. That is to say, your contract could apply Qatari law but give jurisdiction to the courts of England and Wales.
Jurisdiction becomes very important to the parties when it comes to the resolution of disputes. An arbitration is a very different dispute resolution process to a court proceedings. In arbitration the parties are likely to have some input into whom (the arbitrator(s)) will be making the eventual decision (award). In court the parties are less likely to be able to influence this. This could be the difference between having a decision maker familiar with construction and a decision maker who is not. The ability for the winning party to recover its legal costs will differ depending on the jurisdiction. The process by which pleadings are prepared and evidence is presented is different in different jurisdictions.
Perhaps most crucially is the issue of enforcement. Once you have a court judgment or an arbitration award in your favour, where will you seek to enforce it? Will it be capable of enforcement? The jurisdiction in which it was obtained impacts upon where it can be enforced. For example, a favourable judgment from the court of Qatar might be useless to you if the opponents assets are in Spain and vice versa.
Whether a judgment or award is enforceable in a different country depends on the reciprocal arrangements, conventions and treaties to which the country with jurisdiction and the country in which you are seeking to enforce sign, or do not sign.
When it comes to court judgments Qatar works on the basis of reciprocity, if the country from which the judgment comes would enforce a judgment from the court of Qatar, then the courts of Qatar should enforce theirs. With arbitration, Qatar is a signatory to the New York Convention and should enforce awards from states which are similarly signatories to the New York Convention. Qatar is also part of the Gulf Cooperation Council (“GCC”) which can be relied upon when it comes to enforcement of judgments and awards obtained within the GCC.
Take time to choose and negotiate your law and jurisdiction clauses. If you do not, you could end up unhappy with the dispute resolution process you have to decide your disputes and worse, could receive a decision you cannot use.