Debt Collection in Qatar

The debt collection procedure in Qatar begins with an assessment of the debtor’s solvency, scope of activity, business history, availability of documentary evidence of the debt, current court cases and enforcement proceedings, and the possibility of disputing the debt. This assessment determines the strategy to be employed on behalf of the client in the collection process.

If the debtor has no ongoing court cases or outstanding judgments for debt collection and is actively engaged in commercial activities, then it is advisable to use the out-of-court debt collection stage.

This stage involves active negotiations with the debtor in order to reach an agreement on payment of the creditor’s claims or other possible settlement options (e.g. return of goods, transfer of the debt to a third party, exchange of services or goods).

Interaction with the debtor begins immediately after sending a notice by mail, email, phone or instant messengers. This process involves intensive communication with the debtor in order to exert constant pressure. The main objective is to establish contact with key decision makers to achieve the fastest possible debt recovery.

The average time for informal extra-judicial collection is up to 60 days (except in cases where a debt repayment installment plan is agreed upon). If this stage does not bring the expected results or after the initial analysis it becomes clear that it is not applicable, it is necessary to proceed to collection through the court.

Before initiating judicial collection, it is worth paying attention to the limitation period. The general limitation period is 15 years. The limitation period for the collection of commercial debts between business entities is 10 years. The consequences of the expiration of the limitation period are applied in the court of first instance and the appellate court only at the request of the debtor. The limitation period is interrupted by the explicit or implicit recognition of the creditor’s claims by the debtor. Indirect recognition is considered to be cases when the debtor transfers his property to the creditor as collateral. After the interruption, the limitation period starts again.

Qatari law provides for judicial collection of debts in the ordinary court procedure and in the order for the issuance of a payment order.

The ordinary court procedure begins with the filing of a statement of claim in court. All documents supporting the plaintiff’s claims must be attached to the statement of claim. Then, after the fee has been paid, the court registry registers the claim in the register of cases and within one day forwards a copy of the claim and notice to the bailiff for subsequent delivery to the defendant.

The notice must be served on the defendant within three days and contain information about the claim, the plaintiff and the date of the scheduled hearing, as well as an invitation to the court to review the case materials. The defendant must file his statement of defense with the court registry with all documents attached no later than three days before the scheduled hearing. If necessary, these documents can be submitted at the hearing or during the period when the case is referred for decision, if the court allows it. The period for appearing in court is five days.

 On the date set for the hearing, the parties must appear in person or through their representatives – lawyers or attorneys. If the defendant appears at any hearing or submits a statement of objection, the proceedings shall be deemed to be in the presence of the defendant, even if the defendant does not subsequently appear. If the defendant fails to appear and fails to file a statement of defenses, the court shall conduct the proceeding in absentia. If the defendant appears before the end of the hearing, any judgment rendered in his/her absence shall be deemed null and void.

During the hearing, the court hears the positions of the parties, interrogates witnesses if necessary, examines written evidence and, after the parties have debated, makes a decision at the same hearing or postpones its issuance until the next appointed hearing.

A payment order is used to collect a clearly defined amount of debt that is confirmed by written documents. To implement this option, the creditor must send the debtor a demand for payment of the debt, and if the debtor fails to comply with this demand within five days, the creditor has the right to apply to the court with an application for the issuance of a payment order. The application must be accompanied by documents that confirm the debt and evidence of sending the debtor a demand for payment of the debt. After receiving the application, the court issues a payment order within three days. If the court finds it impossible to satisfy the creditor’s application, the court must schedule a hearing in court. The court office is obliged to notify the defendant of the date of the hearing.

The creditor’s application and the payment order must be served on the debtor within three months of the order being issued. Otherwise, the order shall lose its force. The debtor may appeal the payment order within thirty days of its receipt. The appeal shall be filed by summoning the creditor to appear before the competent court, and the summons shall comply with the requirements provided for filing a statement of claim. The appeal must be substantiated, otherwise it shall be deemed invalid. The appeal shall be considered in the general manner by analogy with the consideration of a statement of claim. If the defendant fails to file the appeal within the prescribed period, the payment order shall acquire the force of a final decision.

The decision of the court of first instance may be appealed to the court of appeal. The decision of the court of appeal may be appealed to the Qatar Court of Cassation. The appeal period is 30 days from the date of notification of the contested decision. The decision of the court of cassation is final and cannot be further appealed.

Once the judgment has entered into legal force, the creditor must initiate enforcement proceedings. The judgment may be brought for enforcement within 15 years. Within the framework of the enforcement of the judgment, the creditor’s claims may be satisfied by seizing and writing off funds from the debtor’s accounts; seizing the movable and immovable property of the debtor with their subsequent sale; seizing and confiscating securities; seizing and confiscating company shares, seizing and confiscating the debtor’s property held by third parties.

An alternative option for collecting debt from a company and an entrepreneur is the bankruptcy procedure of the debtor. There are two parallel bankruptcy systems in Qatar. The first is the national system, regulated by the provisions of the Commercial Law (hereinafter referred to as the “national regime”). The second system is described in the QFC Insolvency Regulations 2005 and applies to companies and branches registered in the Qatar Financial Centre (hereinafter referred to as the “QFC regime”).

Under the national regime, any creditor with an undisputed and payable commercial debt may seek to declare its debtor bankrupt if the debtor has stopped paying the debt when it falls due. At this stage, if the debtor’s assets are insufficient to fully satisfy the creditors’ claims, it is possible to set aside transactions by the debtor that were made with the intent to cause prejudice to the creditors. Such transactions or acts made after the date of cessation of payments but before the issuance of the bankruptcy order include, but are not limited to: all donations, except small gifts consistent with custom; early payment of debts, regardless of the form of payment; settlement of urgent debts and other obligations in a form other than that agreed upon; any agreement establishing a pledge or security if it is made after the debt was incurred; any transaction that causes damage to creditors, provided that the debtor’s counterparty knew about the cessation of payments. Claims for invalidation of the above transactions or actions lose force after one year from the date of the bankruptcy order. As a result of the cancellation of the above transactions, it is possible to return back to the debtor what he lost from such transactions and thereby increase the liquidation estate to satisfy the claims of creditors and cover the costs of implementing the bankruptcy procedure.

Under the QFC regime, the creditor has the right to initiate the forced liquidation of the debtor if the amount of the debt exceeds 2,000 US dollars and the debtor does not pay the debt within three weeks from the date of receipt of a written demand from the creditor. In the process of forced liquidation, if the court finds that the debtor committed fraud in anticipation of liquidation; transactions aimed at defrauding creditors; fraudulent or illegal trading, then the court may apply summary prosecution of the guilty controlling persons of the debtor. As a result of such prosecution, the court may oblige the guilty parties to: 1) return or pay to the debtor the money or property that was used for other purposes; 2) pay compensation in connection with any wrongful performance or breach of any fiduciary or other duty towards the debtor; 3) make additional contributions to the assets of the debtor that the court deems appropriate. As a result of using these provisions, it is possible to increase the chances of collecting the debt in full.

If you have any questions or need support on international debt collection in Qatar, our company is ready to provide its expert assistance to effectively resolve your financial issue. Contact us for more information and professional support from specialists of the leading debt collection agency.

# DEBT COLLECTION AGENCY QATAR

06.11.2024

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