Qatar faces $6 billion arbitration claim linked to ruling family member

Forbes | 14 February 2022

Qatar faces $6 billion arbitration claim linked to ruling family member

by Dominic Dudley

The Qatari government is facing a $6 billion international arbitration claim stemming from a case against a member of the country’s ruling family.

Anglo-Spanish family trust Swifthold Foundation is pursuing the gas-rich Middle East state after failing to secure compensation through the local courts over a property investment scheme that went sour involving Sheikh Fahd Bin Ahmed Bin Mohammed Al-Thani and his company Fast Trading Group.

The dispute has a long history, dating back to 2009 when Swifthold transferred $900 million to Fast Trading, to invest on its behalf. In 2011, the High Court in Manchester, UK ruled that Fast Trading had breached its agreement with Swifthold and ordered it to pay $4 billion to Swifthold. In subsequent decisions in 2015 and 2018 the court added Fahd’s name as a debtor and increased the amount to $6 billion to allow for interest.

However, those acting for Swifthold say they have been frustrated in their efforts to enforce the judgement in Qatar, where many of Sheikh Fahd’s assets are thought to be held.

“Over two years we got very little,” said Chris DeLise, chief executive of Chicago-based litigation finance firm Delta Capital Partners. “Our lawyers in Qatar would just get the run-around. We received two checks with a combined value of around $75,000 but we never cashed them because there was no explanation of what they were for.”

There had previously been some signs of progress in the Gulf state. In April 2019, the Court of First Instance in Qatar recognized the UK rulings. However, that position was changed by a Court of Appeal decision in July 2021 which meant the judgements could not be enforced after all. Swifthold appealed that to the Court of Cassation, Qatar’s highest court, in September 2021.

The Court of Cassation delivered its judgement on 18 January this year, dismissing Swifthold’s right to enforce the UK court judgements in Qatar. “We found it quite surprising,” said Rahim Moloo, a partner at law firm Gibson Dunn which is acting for Swifthold. “It sets a tone for the future; it sets a precedent.”

Bilateral treaty breach

Ahead of that final ruling, Swifthold’s lawyers had written to Qatar’s Prime Minister Sheikh Khalid Bin Khalifa Al-Thani in December, claiming the country had breached a bilateral investment treaty with Panama, where Swifthold is registered. Moloo said that, as of early February, it had not received a response.

The Qatari embassy in London had not provided answers to questions for this article at the time of publication.

Under Article 8 of the Qatar-Panama bilateral investment treaty, if an amicable settlement cannot be reached within six months, an international arbitration process will start. Lawyers say that could take up to two years to reach a judgement.

It is unclear if Sheikh Fahd has $6 billion in assets. Moloo said they think he has “significant assets” in Qatar, while DeLise said they have identified around $800 million-worth. But there is no doubt that the Qatari state has sufficient assets to settle the debt, many of which lie abroad.

There is also a reputational issue for Qatar to consider, given there will be greater focus on it this year than normal, with the football World Cup due to be held in the country in November and December.

“We intend to shine a very bright spotlight on Qatar,” said DeLise. “They want to sweep this under the carpet, but we’re not going to be quiet.”

source: Forbes