Contractor not paid or project delayed in Qatar: what does the law say?

What does Qatari law say when a contractor is not paid?

The employer must pay the contractor when it takes delivery of the work, unless the contract or custom says otherwise (Civil Code, Article 697). Articles 682 to 715 of the Civil Code (Law No. 22 of 2004) govern contracting («المقاولة»). Most apply only where the contract is silent, but some cannot be excluded, such as the ten-year liability (Article 715).

Construction contracting carried out as a business is a commercial act (Trade Law No. 27 of 2006, Articles 4 and 5), which affects the court, notices and limitation.

What happens when a construction project is delayed?

The contractor must finish within the agreed time or, if none was agreed, a reasonable time (Civil Code, Article 687). If the delay makes on-time completion hopeless, the employer may ask for termination before the completion date (Article 689).

• Compensation. Late performance must be compensated unless due to an outside cause (Article 256), and as a rule only after formal notice, unless agreed otherwise (Article 260).
• Delay penalties. Compensation fixed in the contract is not due if the debtor proves there was no harm. The court may reduce it if grossly excessive or if the work was partly done, and contrary clauses are void (Articles 265 and 266).
• Delay caused by the employer. If the employer does not do its part in time, the contractor may set a reasonable deadline, then ask for termination with compensation (Article 692).

What payment security do contractors and subcontractors have?

An unpaid subcontractor can claim directly from the employer, up to what the employer owes the main contractor when the claim is filed (Civil Code, Article 702). Workers on the job have a similar right.

• Subcontractor's privilege. Subcontractors who attach sums held by the employer or the main contractor gain a privilege over them, ranking ahead of anyone to whom the main contractor assigned its claim (Article 702).
• Withholding performance. Where both sides' obligations are due, each may withhold performance while the other does not perform, unless agreed or custom says otherwise (Article 191).
• Right of retention (lien). A person bound to hand over a thing may keep it until the other side offers to perform a connected due obligation or gives adequate security. It gives no priority and ends once the thing leaves the holder's hands (Articles 280, 282 and 284).
• Contractors' privilege. Contractors and engineers who build, rebuild, restore or maintain buildings or other structures have a privilege over them, limited to the value their work added at sale. It must be registered (Articles 1185 and 1064).
• Bank guarantees. The bank pays on demand during the validity period and cannot refuse because of the underlying dispute (Trade Law, Articles 406, 409 and 411).

Freezing assets before judgment changed with the 2024 Judicial Enforcement Law; see our guide to recovering a debt in Qatar.

What time limits apply, including the ten-year liability?

A claim for unpaid construction work is time-barred after 15 years as a general rule, or 10 years between traders, counted from the due date (Civil Code, Articles 403 and 410; Trade Law, Article 87).

The ten-year liability («الضمان العشري») applies even if the defect comes from the ground or the employer approved the work (Article 711). The engineer answers for design defects, and for execution defects if supervising; the contractor answers for design defects only if they were obvious or the designer works for it (Articles 712 and 713). Clauses excluding or limiting this liability are void (Article 715).

Limitation is interrupted by a court claim, an attachment or the debtor's acknowledgment, among other acts (Articles 413 and 414), and the parties cannot agree on a different period (Article 418). Contract clauses requiring notice of claims within a set time are a separate matter, so read them early.

Which notices and records should you keep?

Several contracting rights in the Civil Code depend on a notice given in time, so send notices in writing and keep proof of delivery.

• An estimate will be exceeded: notify the employer promptly (Article 708).
• The employer's materials are defective, or something holds up the work: notify at once (Article 686).
• A lump-sum design changes: get the employer's authorisation and agree the price (Article 709).
• The work is complete: notify the employer, and send a formal notice if it will not take delivery (Article 693).
• You claim compensation: give formal notice first (Articles 260 and 261); in commercial matters, by registered letter with acknowledgement of receipt (Trade Law, Article 81).

Keep the signed contract and drawings, approved variations, payment applications and certificates, invoices, site diaries, meeting minutes, correspondence, photographs and handover records. Foreign-language documents need an Arabic translation at the Investment and Trade Court (Law No. 21 of 2021, Articles 17 and 19).

If site evidence may be lost, for example before work is covered up, the urgent matters judge can be asked to inspect it, with an expert if needed (Civil and Commercial Procedure Law, Articles 331 and 332).

Which route fits: settlement, arbitration or the Investment and Trade Court?

A construction payment dispute in Qatar is resolved by settlement, by arbitration under a written arbitration agreement, or in court, where the Investment and Trade Court hears commercial disputes.

Where the arbitral tribunal cannot act in time, the competent judge may order interim measures without the request waiving arbitration (Arbitration Law, Article 9). Judgments and awards are enforced through the Enforcement Court: see arbitration in Qatar, enforcing a judgment in Qatar and reviewing a contract before you sign.

When should you speak to a lawyer?

These are signs it is worth asking early:

• The employer disputes quantities, variations or quality, or is deducting delay penalties.
• You exceeded an estimate, or did extra work without a signed variation.
• You are a subcontractor and the main contractor has stopped paying.
• A bank guarantee has been called, or is about to expire.
• The contract has an arbitration clause, or the employer is a government body.
• A building defect has appeared, and the ten-year or three-year limits may be running.

Questions people ask