Many construction clients and claim professionals often ask me whether Qatari courts award interest for delayed payments in construction contracts, when local public and private contracts (including the normally modified FIDICโs clause 14.8) do not specify or allow any % interest for late payments. I have addressed this issue briefly in past post comments, but given the frequency of questions, I thought it would be helpful to clarify the matter again in a separate post. I say:
In Qatar Courts, and under Qatar civil law codes, late construction contract payments do not generate time-dependent fixed % interest (not permitted under strict Sharia Riba doctrine). Instead, a delay in payment gives rise to compensation.
Numerous Qatari court judgments confirm consistent legal principles and predictable outcome: Breach of payment obligation is a de facto causation of harm (akin, if you like, to strict liability under common law tort ) and is consistently award compensation on the grounds of harm suffered as a result of loss of reinvestment opportunity, deprivation of cash funds and loss of profit.
I have picked up four court judgments since 2010 to illustrate this consistency. The cases I have picked, randomly from my own claim/expert consultation cases, are:
๐นCase 3023/2010 , N—Co Construction v Ministry of Health โ Payments due QR. 14,500,000, compensation awarded QR. 3,000,000 (period of delay until judgment 5 years)
๐นCase 444/2022 , F. Choice v — Chemical Industries โ Payments due QR. 1,458,000, compensation awarded QR. 100,000 (period of delay until judgment 2 years)
๐นCase 6486/2024, F. Industrial Supply v B— Construction โ Payments due QR. 1,187,000, compensation awarded QR. 100,000 (period of delay until judgment 3 years)
๐นCase APP901/2025, B. Specialties v SP. Servicesโ Payments due QR. 1,368,000, compensation awarded QR. 100,000 (period of delay until judgment 2 years)
๐กThe Qatar civil and procedural law codes that normally playout in these claims and are the legal foundation for the courts, are:
๐น Civil Code Articles 171 & 172 โ Contracts bind the parties and must be performed in good faith.
๐น Article 199 โ Fault causing harm gives rise to compensation.
๐น Article 256 โ Failure or delay in performing an obligation requires compensation.
๐น Article 263 โ Compensation includes actual loss and loss of profit.
๐น Article 268 โ If the debtor delays payment of a monetary amount after notice and the creditor proves damage, courts may award fair compensation.
๐น Article 211 Civil Procedure Law โ The creditor must prove the obligation; the debtor must prove discharge.
โ๏ธI believe Qatarโs above approach is practical, ensuring, on the one hand, compliance with Sharia Riba principles, while, on the other hand, protecting contractors from prolonged non-payment through financial compensation, under civil legal codes.
๐กDo you agree?
