Increased costs under Qatari construction contracts
As the Middle East continues to diversify and boost their economies through national transformation programmes, businesses must adapt in a rapidly changing environment that is rich in opportunity and characterised by regional variations. Whilst these are exciting opportunities for the region, there are legal provisions which may be unfamiliar to expatriate and local businesses operating in each jurisdiction. In this article, we summarise the different types of legislation and legislative procedures used in the State of Qatar, United Arab Emirates and the Kingdom of Saudi Arabia to help companies support compliant internal governance.
Legislation is the primary form of Qatar law. It can be proposed by the Qatari legislature (the Al Shura Council), the Cabinet of Ministers or the Emir.
Qatari legislation must then be approved by a simple majority of the Al Shura Council before being issued and enforced by the Emir. All legislation must be published in the Qatar Gazette within two weeks of issuance and, unless stated otherwise, shall come into force a month after publication.
Examples include Qatar Law No. 22 of 2004 establishing the Qatar Civil Code.
In cases of extreme urgency or the absence of an Al Shura Council instruction, the Emir can issue decrees with the power of law. These decrees must be submitted to the Al Shura Council which can, within 40 days of submission and upon a two-thirds majority, reject any decree or request any amendment.
Decrees cease to have effect upon rejection, or the expiry of any period for effecting amendments stipulated, by the Al Shura Council. Decrees must be published in the Qatar Gazette within two weeks of issuance. The default position is that decrees come into force a month after publication unless stated otherwise (in cases of urgency, we would expect a shorter timeframe to be stipulated).
Examples include Decree No. 19 of 2021 amending the Law on Combating Money Laundering and Terrorist Financing promulgated by Qatar Law No. 20/2019.
While not technically laws, the Emir uses such orders to make appointments and declarations e.g. to appoint or remove government ministers.
Examples include Emiri Order No. 1 of 2016 on the Formation of the Cabinet which reshuffled the Qatari Cabinet.
Where legislation grants the power to do so, Ministers may issue decisions with legal force. Such decisions are often used where a broad legislative framework has been established but specific points remain to be addressed.
Examples include Ministerial Decision No. 4 of 2015 dealing with the wages protection system for workers within the wider framework of the Qatar Labour Law, Law No. 14 of 2004.
Article 1 of the Qatari constitution states that Sharia shall be a primary source of legislation. The main focus of Sharia in Qatar is currently intestacy and family law matters. However, any area of law is, at least in theory, subject to and should be compliant with Sharia.
Examples of the influence of Sharia on the Qatari legal system include the award of Diya (blood money), for causing a death or the loss of essential faculties and the Courts’ reluctance to award compound interest on damages (in lieu of a contract providing for the same).
Federal laws are drafted by the Council of Ministers (CoM) and submitted to the National Federal Council (NFC) (comprising 34 representatives drawn from the seven Emirates). The NFC may reject or amend proposed federal laws but can be overruled by the Federal Supreme Council (FSC) (comprising the rulers of the seven Emirates) and the President (a ruler elected from the FSC’s members).
Federal laws are submitted to the President for approval and ratification by the FSC and must be ratified by a majority vote of five of its members. That majority must include the rulers of Dubai and Abu Dhabi.
Once the FSC has ratified a law, the President signs it. It must then be published in the UAE Gazette within two weeks of the President signing. Unless otherwise specified, laws shall come into force one month after publication.
Examples of UAE federal laws include Federal Law No. 09/2022 which establishes the legal framework governing the employment of domestic workers.
Where federal laws are required urgently between sessions of the FSC, the President and the CoM, acting together, may issue laws as decrees. Decrees must be referred to the FSC for approval within one week. If approved, they shall have the force of law but must also be published in the UAE Gazette.
Examples include the Federal Decree-Law No.13/2016 on the establishment of the Federal Tax Authority.
Federal ordinary decrees are drafted by the CoM and issued by the FSC. These decrees may, depending on their focus, require ratification by the President. Where the FSC is out of session it may authorise the President and the CoM to promulgate decrees.
All federal ordinary decrees should be published in the UAE Gazette.
Federal ordinary decrees are used for government appointments and to add detail to federal laws where required.
Examples include Federal Decree No. 15/1992 outlining the fees payable before federal courts.
The Emirati constitution grants the seven Emirates all powers not assigned to the federal government meaning it may be necessary to consider any relevant Emirate’s body of domestic law.
Examples include Dubai Law No. 11/2013 which provides the legal framework governing the provision of health insurance in the Emirate of Dubai.
The UAE constitution maintains Sharia as the main source of Emirati legislation. Sharia does not, however, have direct effect in the UAE and cannot be used as a basis for challenging legislation. Instead, the legislator can have regard and should have regard to Sharia when formulating laws.
The constitution of the Kingdom is the Holy Quran and Sunna which form the Kingdom's primary legislation. The default legal position in the Kingdom is that Sharia applies and will be enforced by the courts.
Examples include the substance of Saudi criminal law which is a direct application of Sharia.
The use of royal decrees is extremely varied, ranging from the appointment of government ministers to the issuance of laws.
Laws issued as royal decrees form the body of codified Saudi law and operate as a kind of civil code in areas legislated on.
Any laws must be compliant with and subject to Sharia.
Laws issued must be published in the Saudi Gazette and come into force on the date of publication unless stated otherwise.
Examples include Saudi Royal Decree No. (M51/1426), approving the Saudi Labour Law.
The Saudi Cabinet is overseen by the King as Prime Minister and is responsible for the drafting and implementation of Saudi policy. The Cabinet’s decisions are passed by a majority.
The Saudi Cabinet produces legislation which must be approved by royal decree, though this approach does not appear to be followed consistently.
Similarly, we suspect that although cabinet decisions should be published in the Saudi Gazette, this rule is also not consistently followed.
Examples include Saudi Cabinet Decision No. 156/1433 approving the Saudi Arbitration Law.
Where granted powers to do so, Saudi Ministers may also issue decisions with the force of law which are often used to ‘flesh out’ general provisions of royal decrees.
Ministerial decisions must also be published in the Official Gazette.
Examples include Saudi Ministerial Decision No. 42240/1439 on Companies issued by the Minister of Commerce and Investment, which amended the Saudi Companies Law.
Note: All Qatari Laws (save for those issued by the Qatar Financial Centre (QFC) to regulate its own internal business) are issued in Arabic and there are no official translations, therefore for the purpose of drafting this article we have used our own translation and interpreted the same in the context of Qatari laws and regulations. If you would like further information please contact either Emma Higham, Sara Khoja or James McLellan.