Our knowledge, experience, and expertise are now available on the go.
We are proud to announce the launch of My Tamimi App, a convenient new tool for anyone with an interest in the legal sector, from law students to General Counsel.Find out more
A key difference between the two legal systems is that there is no system of binding precedent under a civil law system.
The primary legislation that governs guarantees in Qatar is the Civil Code. While other contracts may be concluded verbally, guarantees must be concluded in writing. For a guarantee to be valid under the laws of Qatar, reference should be made to the underlying debt being guaranteed. In other words, the guarantor must guarantee a specific debt. Notwithstanding this, a guarantor may guarantee future and unspecified obligations of a debtor, provided that the maximum amount being guaranteed and the maximum duration of the guarantee are specified in the guarantee document.
Where a future obligation is being guaranteed and there is no specification of either the upper limit of the guarantor’s exposure or the time limit on the length of the guarantee, the guarantor may withdraw the guarantee. Under article 824 of the Civil Code the creditor must first exhaust its remedies against the primary obligor before taking enforcement measures against the guarantor. However, article 824 would not apply if the primary obligor and the debtor are said to be jointly liable for the debt.
Pursuant to the Civil Code, a guarantee must state a maximum time-frame for the obligations of the guarantor. However, there is no reference in either the Civil Code or the Commercial Code as to a limit on the guaranteed amount. Therefore, the concept of a so-called all monies guarantee is not prohibited under Qatari law, provided that a maximum duration and an amount for the guarantee are stated in the guarantee.
Demands under a guarantee must be made in writing. Where the primary obligor has defaulted on its obligations and the guarantor notifies (or warns) the lender that such a default has occurred, the lender has six months from the date of notification to commence enforcement proceedings.
The Civil Code provides, inter alia, in relation to contracts of guarantee that:
There is no general concept of corporate benefit under Qatari Law. However, under the Commercial Code, the board of directors must act in the company’s best interests when determining if a guarantee should be provided. The board of directors must also act lawfully and may not misuse its power. This article was first published in the April 2016 issue of IFLR Magazine.
Disclaimer: This chat service should not be relied upon as a substitute for professional advice which takes account of your specific circumstances and any changes in the law and practice. No warranty is made as to the accuracy or completeness of the information provided via this service and no liability is accepted by Al Tamimi & Company Limited, its affiliates, partners or employees for any loss arising as a result of reliance upon the information provided.
Kindly accept the disclaimer to proceed to a live chat.
Thank you for your inquiry. We will connect you to one of our agents now.
Thank you for your interest in working with Al Tamimi & Company. Please click here to view our latest job openings.