INSIGHTS

Withdrawal of Arbitral Claims under Law No. 2 of 2017 promulgating the Civil and Commercial Arbitration Law

Aug 26, 2020

By: Mohammad Ahmad – Associate

Thomas Williams – Partner

Finality of legal proceedings is one of the hallmarks of the administration of justice. As such, it is embedded across different jurisdictions under comparable legal doctrines: res judicata, issue estoppel, cause of action estoppel, rule of public policy and abuse of process to name a few.

Although the major institutional arbitral rules do not expressly cater to the character of the withdrawal of an arbitral claim, the legal framework under Law No. 2 of 2017 promulgating the Civil and Commercial Arbitration Law in the State of Qatar (“the Civil and Commercial Arbitration Law”) is extensive enough to account for both recognised forms of withdrawal, i.e. on a ‘with prejudice’ or on a ‘without prejudice’ basis, pursuant to Article 31(9) thereof.

A ‘with prejudice’ withdrawal means that the claimant waives its rights against the respondent insofar as the subject matter of the underlying claim is concerned and is accordingly precluded from initiating fresh proceedings to re-agitate the same claim. Irrespective of the stage at which the arbitration proceedings stand, the claimant has the prerogative to withdraw its claim on a ‘with prejudice’ basis without obtaining the concurrence of the respondent. The prerogative of the claimant in this regard is absolute inasmuch as the respondent would be unable to invoke the exceptions contained in Article 31(9)(B) of the Civil and Commercial Arbitration Law since such a withdrawal would invariably lead to a final determination of the dispute, i.e. relinquishment of the claimant’s substantive rights, if any, concerning the subject matter of the claim.

A ‘without prejudice’ withdrawal is a different proposition altogether in that it entails that the claimant preserves its rights to pursue the underlying claim in future proceedings. As such, once the arbitration proceedings have commenced in accordance with Article 21 of the Civil and Commercial Arbitration Law (i.e. upon receipt of the claimant’s request for referral of the dispute to arbitration by the respondent), a ‘without prejudice’ withdrawal is contingent upon the sanction of the respondent. The right of access to justice guaranteed by Article 135 of the Permanent Constitution of the State of Qatar inter alia envisages that the respondent’s rights, with respect to the potential exposure to the same claim in subsequent proceedings, are adequately safeguarded. Accordingly, in the event that the respondent declines to concur with the withdrawal request, it may assert that it has a serious and legitimate interest in the continuity of the proceedings crystallising in the determination of the underlying dispute in accordance with Article 31(9)(B) of the Civil and Commercial Arbitration Law.

It is, therefore, incumbent upon an arbitral tribunal to determine the precise nature of the withdrawal of an arbitral claim, i.e. whether it is on a ‘with prejudice’ or on a ‘without prejudice’ basis, to effectively preserve and protect the substantive rights of the parties for the proper administration of justice.

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