Qatar is one of the economic hotspots of the Middle East and is continuously building world-class infrastructure to support its expanding economy. Joint ventures are governed by the provisions of the Commercial Companies Law and are not necessarily required to be registered and incorporated. Unincorporated joint ventures can operate within the state once they comply with relevant laws and regulations.
Decennial liability is a significant potential liability that many construction professionals fail to evaluate properly. It stems from mandatory provisions of law that impose strict liability on contractors and design professionals for a 10-year period following delivery of the works. These provisions govern the scope of decennial liability and its allocation among contractors, architects and engineers.
No specific statute governs the construction industry in Qatar. The principles set out in the Qatari Civil Law provide some guidance where the subcontract is drafted on a back-to-back basis and the risks assumed by the contractor under the main contract are passed down to the subcontractor.
Following the announcement that Qatar will host the 2022 FIFA World Cup, a surge in activity in the construction and infrastructure sectors is expected. The Qatar 2022 Supreme Committee has announced that the workers' charter for health and safety prepared in anticipation of the World Cup construction boom is the first step towards a comprehensive strategy on workers' safety, health, security and welfare.
As part of the freedom of contract principle recognised by Qatari law, the parties to a construction contract can agree to include a clause providing for the payment of monetary compensation or liquidated damages in the event of a specified event or default. Despite the freedom of contract principle, a Qatari court can also adjust liquidated damages under certain circumstances.
While Qatar recognises many of the mechanisms used in construction project financing, there is likely to be some uncertainty as to the effectiveness of those mechanisms. In addition, there is no long set of precedents either in commerce or before the courts. Therefore, any construction project financier ought to be cautious, but optimistic, in approaching the Qatar market.
Over the next decade, the construction sector in Qatar will continue to witness a boom in major infrastructure projects, both in preparation for the 2022 football World Cup and in other fields. Many voluminous and rather complex construction contracts have already been concluded or will be concluded in the near future – which means a substantial increase in complex construction disputes.
While other economies continue to be battered by economic crises, Qatar's economy is undergoing a phase of unparalleled development and expansion. As a result, the states of the Gulf Cooperate Council are likely to have an increased appetite for investment in Qatar.
Trade secrets in Qatar are protected under the Law on the Protection of Secrets of Trade. The law provides that legal title to a trade secret belongs to the individual or legal entity. It imposes a duty on the legal owner to exercise reasonable efforts to safeguard the trade secret. A breach of this duty may subject the owner to financial penalties and/or imprisonment.
Recently, the Advertising Law was promulgated, setting out new requirements in relation to the control and placement of advertisements. A violation of certain provisions of the Advertising Law may be subject to a fine of up to QR20,000. Furthermore, a court may also order the removal of the advertisement and require the restoration of the property on which the advertisement was placed at the expense of the violator.
As construction activities continue to expand in Qatar, the implementation of the new Green Building Code presents both challenges and opportunities for companies hoping to participate in Qatar's forecasted growth. Although moving to sustainable construction practices will initially entail higher costs, the expectation is that it will also bring both short and long-term savings.
The 2008 Consumer Protection Law, which was enacted to answer the demands of the victims of unscrupulous merchants, was recently amended. Among other changes, the amendment sets down restrictions on when suppliers can increase the prices of commodities and services, and alters the fines that can be imposed on suppliers that violate the law.
Following the announcement that Qatar will host the 2022 FIFA World Cup, significant growth is expected in the country, especially in the construction and infrastructure sectors. Several major projects are envisioned for the event. Therefore, the Qatari government has made important changes in its legal system.
Including: Investment restrictions; Choosing the most appropriate business medium; Company structures; Commercial registration and other formalities.
Construction tenders issued by private or publicly listed companies in Qatar are governed by their internal rules and regulations. Tenders issued by government entities are governed by Law 26/2005, as amended by Law 22/2008 and Law 14/2010. These laws comprise the Tenders and Biddings Law, which establishes three types of tender: general tenders, local tenders and selective tenders.
The news that Qatar has acceded to the Patent Cooperation Treaty (PCT) appears to give rise to an unusual situation of progress without movement. Rights owners with an interest in Qatar may look forward to making use of the international system offered by the PCT in order to obtain protection more effectively than is available under the current system. However, it appears that there will be no immediate change in practice.
There are four alternatives for foreign investors that wish to undertake construction-related activities in Qatar. They may set up a local company under the Commercial Companies Law, register a foreign branch, establish a local or an international engineering consultancy office or establish a trade representative office.