Qatar
1. Are freezing orders (or their equivalent referred to below) available in civil legal proceedings in this jurisdiction and what is their effect?
Yes. The respondent is prohibited from dealing with the domestic assets referred to in the freezing order until a specified time (for example, a further hearing, judgment or payment) or further order of the Court.
2. Are other interim orders commonly made in conjunction with a freezing (or equivalent) order?
Yes. Pursuant to Article 147 of the Civil Procedure Code of 1990 (No. 13) (referred to herein as the “Civil Procedure Code”), the order for payment is issued by the applicant or his attorney to the relevant Court or the Court of Enforcement in Qatar. The order for payment shall be issued with a petition or a “debt deed” which shows the claim and evidence that demand for payment has been made. The debt deed can be accompanied by a disclosure order requiring the debtor to disclose any relevant assets which are subject to the order.
3. Briefly what is the relevant legal test?
Pursuant to Article 398 of the Civil Procedure Code, the applicant must satisfy the following factors:
(i) he holds a bill of exchange or a promissory note in relation to the outstanding debt;
(ii) the debtor does not have a stable domicile in Qatar or there is a serious risk that the debtor will flee with his money or conceal it or otherwise lose; and
(iii) the surety.
4. Briefly what is the process for obtaining a freezing (or equivalent) order?
An application must be submitted to the Court of Enforcement in the form of an “order for payment” which must include evidence showing that demand for payment has been made to the debtor (with at least five days’ notice). The payment order must be accompanied with a petition submitted by the applicant or their lawyer outlining the facts of the claim, the grounds, the details of the debtor and their domicile, and precise debts that are owed. The Court of Enforcement reviews the payment order and issues the freezing order within four to six weeks. The debtor must be notified of the relevant order within two weeks from the date of the decision which must be served with the decision and payment application.
5. Does the applicant have to provide any form of security or commit to compensation if its claim is ultimately unsuccessful and any freezing (or equivalent) order granted causes loss and damage to the respondent?
Qatari law does not envision the provision of a security. However, if the applicant is unsuccessful in the order, they may be ordered to pay a fine not exceeding QAR 500 along with any other suitable compensation as deemed fit by the Court.
6. Can it be sought against third parties?
According to Article 445 of the Civil Procedure Code, attachments to assets can be sought against third parties. An applicant may seek to seize any of the debtor’s properties or debts that are in the possession of a third party.
7. What assets are covered by a freezing (or equivalent) order?
All tangible or intangible assets located in Qatar can be covered by a freezing order except the following (Articles 387-392 of the Civil Procedures Code):
(i) ordinary and reasonable living expenses and legal costs;
(ii) livestock necessary to the livelihood of the debtor and his family for one month;
(iii) documents, tools and accessories that are integral to the debtor’s profession;
(iv) wages, salaries and pensions shall only be subject to attachment by the quarter of the amount in question;
(v) the debtor’s accommodation, if it is reasonable according to his living standards, unless such accommodation is mortgaged to secure the payment of the claimed debt, or if the debt is not linked to the value of his accommodation; and
(vi) assets belonging to the government.
8. Can a freezing (or equivalent) order be made in support of substantive proceedings abroad?
Yes.
9. Can a freezing (or equivalent) order be made in support of arbitration proceedings or awards?
Yes.
10. At what stage of proceedings can a freezing (or equivalent) order be sought?
At any stage, including prior to commencing the claim (although the Court will expect the applicant to issue its claim promptly) or following judgment to assist with enforcement.
11. Are there typically any exceptions to the general prohibition on the respondent’s use of assets subject to a freezing (or equivalent) order?
Please see question 7.
12. What happens after a freezing (or equivalent) order is granted?
Pursuant to Article 447 of the Civil Procedures Code, after a freezing order is granted, the attachment will be carried out without prior written notice to the debtor by way of summons which includes the following information:
(i) a copy of the judgment or the writ of execution ordering the attachment or permission by the judge for attachment, or the order of the judge to assess the debt;
(ii) a statement of the original amount of debt, its interests and costs;
(iii) order to disclose whatever the debtor owes to the applicant within 15 days from the date of notification of the attachment.
13. Who pays the costs of the application for a freezing (or equivalent) order?
Either the applicant or the debtor may be ordered to pay for the costs of obtaining the freezing order, which is usually decided at the final determination of the underlying litigation. If the applicant is unsuccessful in the order, they may be ordered to pay a fine not exceeding QAR 500, along with any other compensation ordered by the Court.
14. What protections are there typically in a freezing (or equivalent) order for third parties to such orders?
Once a third party receives notice of an order, it owes a duty to the Court to abide by the order. There are no protections envisaged for third parties subject to a freezing order apart from the right to recover any reasonable expenses incurred in complying with the order.
15. What are the consequences of breach of a freezing (or equivalent) order?
Pursuant to Article 514 of the Civil Procedure Code, if a debtor knowingly disobeys a freezing order, the applicant may raise a claim to seek the imprisonment of the debtor. If the losing party does not possess sufficient funds to make any debt payments, or they are ordered to pay and subsequently default, they may be imprisoned. The period of imprisonment may not be in excess of three months.
16. Does a third party notified of (but not a party to) a freezing (or equivalent) order owe a duty of care to the applicant (meaning it can be liable to the applicant for non-compliance)?
There are no stipulations under Qatari law that refer to this duty of care.
17. Can a freezing (or equivalent) order be enforced abroad?
Yes, subject to the laws of the relevant jurisdiction. There are no restrictions on enforcing the order abroad in the relevant Qatari law provisions.
18. Can freezing (or equivalent) orders from overseas jurisdictions be enforced in this jurisdiction?
Yes. However, for a freezing order to be enforced from an overseas jurisdiction, the applicant must seek recognition and enforcement of the relevant order or Court decision in the Court of Enforcement in Qatar. According to articles 379 and 380 of the Civil Procedures Code, the Court of Enforcement assesses whether the country in which the freezing order was granted has a condition of reciprocity with Qatar, and whether:
(i) the Courts of the State of Qatar are not solely competent to adjudicate the dispute in which the judgment or order is rendered, and that the foreign Courts which have rendered it are competent according to the international jurisdiction rules specified in their law;
(ii) the litigants in the lawsuit in which the judgment is rendered have been duly summoned and represented;
(iii) the judgment or the order has acquired the force of res judicata pursuant to the law of the Court which has issued it; and
(iv) the judgment or the order is not contradicting a judgment or an order previously rendered by a Court in Qatar, and that it does not contain any violation to the public order or the morals therein.
Contacts
Alexander Whyatt Partner Eversheds Sutherland Doha, Qatar alexanderwhyatt@eversheds-sutherland.com www.eversheds-sutherland.com Samir Khatib Associate Eversheds Sutherland Doha, Qatar samirkhatib@eversheds-sutherland.com www.eversheds-sutherland.com
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