In a recent manufacturing/construction project financing dispute, the Qatar ITC’s  (AppealCase No. 1329/2025) ruling,  upheld by by CoC (Case No. 218/2026) reaffirmed the principle:

👉 A party that breaches its own contractual obligations cannot demand performance from the other party.

The dispute:

The case arose from an Ijara-based project financing arrangement between a bank and an investor for the construction of a manufacturing factory.

The bank undertook to construct the factory and finance the working capital.

The investor would pay lease-to-own instalments.

The court found that the bank delayed construction of the factory and failed to  finance the project, which  caused losses to the investor. In Response, the investor stopped paying Ijara installments.

The bank sought to:

terminate the contract and claim the remaining rental instalments (QAR 22 Million). The courts rejected this position, holding the investor’s payment obligations were reciprocal to the bank’s obligation to finance the project. Because the bank breached its obligations first, it could not rely on the investor’s non-payment to terminate the contract or claim further instalments.

This reflects a well-known civil law doctrine:

 the exception of non-performance (exceptio non adimpleti contractus):

If one party fails to perform its obligations under a bilateral contract, the other party may suspend its own performance.

 The court went further than merely rejecting the bank’s claim. The investor’s losses were awarded and taken into account in the overall financial reconciliation.

In effect, the court held that the party invoking the exception of non-performance may also recover damages when the counterparty’s breach caused the loss.

The Court of Cassation’s confirmation: a party cannot seek rescission of a contract if it has itself failed to perform its own obligations under Articles 183 and 188 of the Qatar Civil Code.

Practical takeaways:

🔹 Reciprocal obligations matter.

 Payment obligations may depend on the other party fulfilling its contractual duties.

🔹 First breach is decisive.

The party responsible for the initial breach may lose the right to       terminate the contract or claim performance.

🔹 Expert evidence can shape the outcome.

 Financial and technical expert reports may determine both liability and damages.

🔹 The exception of non-performance remains a powerful contractual defense in Qatari law.

🔹When performance obligations are interdependent, the courts will examine who breached first—and why.