Is it time to revise the QICCA rules of arbitration?

The Qatar International Center for Conciliation and Arbitration (QICCA) of the Qatar Chamber of Commerce issued its Rules of Arbitration (Rules) in 2012. The Rules are modelled after the UNCITRAL Arbitration Rules, but with some differences. The Rules took effect at a time when there was no standalone arbitration legislation in Qatar and were a step towards formulating local arbitration rules that reflected prevailing international standards. However, many practitioners believe that certain aspects of the Rules need to be revised, especially after the issuance of a comprehensive arbitration act, Law No. 2 of 2017 (Qatar Arbitration Act), which is based on the UNCITRAL Model Law.

The QICCA secretariat has announced on many occasions that the Rules will be amended to take into account the recent developments in arbitration practice and to be in line with the rules of other leading arbitral institutions such as the ICC and the LCIA. This write-up highlights certain provisions in the Rules that we believe need to be reconsidered when the Rules are updated.

Amiable Composition and Ex Aequo et Bono

The first and foremost provision that needs revision is Article 2.2 of the Rules, which requires the arbitrators to act as amiables compositeurs or decide ex aequo et bono. Article 2.2 of the Rules provides as follows:

“Where the parties have agreed to submit their disputes to arbitration before the Qatar Chamber of Commerce and Industry or the Qatar International Center for Conciliation and Arbitration or under these Rules, they shall be deemed to have submitted to the Rules in effect on the date of commencement of the arbitration proceedings. Such arbitration shall be conducted by the Tribunal on amiable compositeur terms or ex aequo et bono without prejudice to the application of any provisions related to public order in Qatar. The award shall not be subject to any appeal”

Acting as amiables compositeurs or on the basis of ex aequo et bono means the arbitrators will be able to depart from any applicable rules of law and decide the issues in dispute according to principles of fairness and common sense. Article 2.2 of the Rules requires the arbitration to be conducted on this basis. This is an odd provision and contrary to the prevailing practice in international arbitration. Most well organised arbitration rules provide for such authority by way of exception only, ie, where the parties expressly agree to authorize the arbitrators to act in this way. For example:

Article 35(2) of the UNCITRAL Arbitration Rules states:

“The arbitral tribunal shall decide as amiable compositeur or ex aequo et bono only if the parties have expressly authorized the arbitral tribunal to do so.”

Article 21(3) of the ICC Rules of Arbitration states:

“The arbitral tribunal shall assume the powers of an amiable compositeur or decide ex aequo et bono only if the parties have agreed to give it such powers.”

Article 22.4 of the LCIA Arbitration Rules states:

“The Arbitral Tribunal shall only apply to the merits of the dispute principles deriving from “ex aequo et bono”, “amiable composition” or “honourable engagement” where the parties have so agreed in writing.”

Also, the Qatar Arbitration Act provides at Article 28(3) that “the Arbitral Tribunal shall decide the dispute in accordance with the principles of justice and equity, without being restricted by the provisions of law, only if this is expressly agreed to by the Parties”.

The way Article 2.2 of the Rules is currently drafted requires the arbitrators to act as amiable compositeurs or decide ex aequo et bono, which is at odds with both the prevailing practice in international arbitration and the Qatar Arbitration Act. Although Article 2.2 of the Rules requires that in doing so public order rules still need to be observed, it appears to allow arbitrators to ignore the applicable laws that are not public order in nature. This may have significant consequences on the parties’ rights, which is why the more common approach, including under the Qatar Arbitration Act, is to require the parties’ specific agreement to grant the arbitrators such authority.

In our view, Article 2.2 of the Rules should be revised so that arbitrators can assume the powers of amiables compositeurs only if the parties expressly agree to this.

Communication Prior to the Constitution of the Tribunal

The Rules adopt a dated way of communication that is out of step with today’s practice. Article 3.1 of the Rules requires all correspondence with the QICCA secretariat or between the parties to take place only by hand to the addressee, to its place of business, to its habitual residence or by registered mail to its postal address. Article 3.2 of the Rules allows communication by electronic means only after the constitution of the arbitral tribunal if agreed upon by the concerned parties. According to this provision, correspondence by email is not envisaged prior to the appointment of arbitrators, and even then only with the agreement of the parties. This approach will inevitably lead to unnecessary delay in the exchange of correspondence, especially where the parties or one of them is located outside of Qatar. Other arbitral institutions (such as the ICC and the LCIA) allow and give effect to electronic communications from the get-go through to the end of the proceedings. We believe the Rules should be revised to allow for a similar practice to modernise and make QICCA proceedings more efficient.

No Mechanism for Seeking an Extension

Another shortcoming is the absence of any mechanism for seeking an extension of time from the QICCA secretariat. Article 5 of the Rules requires the initial Response to the Notice of Arbitration to be filed within 30 days from receipt of the Notice of Arbitration. However, and contrary to the rules of other leading arbitration institutions, the Rules do not contemplate the possibility of requesting an extension of time to file the Response to the Notice of Arbitration. This is peculiar as the Response is quite an important a pleading that stakes out the respondent’s initial position with respect to the issues in dispute and other important procedural issues, such as the appointment of arbitrators in the case of a 3-member tribunal.

It is common for international arbitration rules to allow for an extension to filing a response to the initial notice of arbitration where there are good reasons for doing so. For example:

Article 5(2) of the ICC Rules of Arbitration states that: “The Secretariat may grant the respondent an extension of the time for submitting the Answer, provided the application for such an extension contains the respondent’s observations or proposals concerning the number of arbitrators and their choice and, where required by Articles 12 and 13, the nomination of an arbitrator….”

Article 2 of the LCIA Arbitration Rules states that: “Within 28 days of the Commencement Date, or such lesser or greater period to be determined by the LCIA Court upon application by any party or upon its own initiative (pursuant to Article 22.5), the Respondent shall deliver to the Registrar a written response to the Request (the “Response”),…”

QICCA has a committee that decides on procedural issues prior to the constitution of the arbitral tribunal. The Rules might well be revised to allow this committee the ability to manage the various submission deadlines prior to the constitution of the arbitral tribunal and grant extensions of time in order to maintain the integrity of the arbitration process.