Qatar appeal court orders foreign companies to pay nearly QAR 2bn to local firm

Through its ruling, the court underscored the obligations of foreign companies operating in Qatar, regardless of their corporate structure.

Qatar’s Court of Appeal has reaffirmed a previous judgment, insisting that a consortium of foreign contracting firms must settle a debt amounting to QAR 1,945,226 to a Qatari trading and contracting company.

Local Arabic daily, Arrayah, reported that the Qatari firm brought legal proceedings against the overseas enterprises, claiming overdue payments and requesting additional compensation of QAR 500,000 for sustained damages.

Despite the foreign companies’ attempts to refute these allegations by stating they were merely regional branches of the core businesses situated outside Qatar, the court held them fully accountable.

The Court of Appeal serves as a crucial part of the Qatari judicial system and plays a pivotal role in the adjudication of disputes, reviewing decisions made by lower courts to ensure justice prevails.

The court’s rulings are predicated on Qatari laws, which are grounded in the principles of Shari’a (Islamic Law), alongside elements of civil law.

Under Qatari law, local branches of foreign companies are treated as distinct legal entities and are subject to local legislation and bear the same responsibilities as domestically incorporated companies. This includes the liability to settle any financial obligations within the nation.

As per the ruling, the Court of Appeal acknowledged these principles, upholding the local company’s claims and validating the responsibility of the foreign entities to settle the outstanding debt.