14/16 An Analysis of Qatar’s Mediation Law No. 20 of 2021, the Final Settlement Agreement
A successful mediation ends with the parties signing a settlement agreement. I have discussed the settlement agreement in earlier posts. I discussed it in the context of party control over the process choices here, in the context of confidentiality here, and in the context of the referring court's management of the litigated case here. I will include those discussions in this post for the ease of the reader.
Duties of the Mediator in Connection with the Settlement Agreement
Drafting the agreement
Article 28 states that "[t]he mediation procedures shall be terminated . . . [upon the] [s]igning [of] the settlement agreement by the parties to the dispute. . . ."
Article 24 sets out the duties of the mediator in connection with settlement agreement. It provides:
The mediator shall, in the event of reaching a settlement of the dispute, wholly or partially, through mediation procedures, execute the settlement agreement in writing, within seven days from the date of reaching the settlement of the dispute.The settlement agreement shall include:1- Names, details and addresses of the parties to the dispute, and the case number, if any.2- Name, details and address of the mediator.3- Name of any other person whose approval of the agreement shall be obtained.4- Summary of the subject matter of the dispute.5- Name of any expert appointed in the dispute and the expert opinion he provided.6- Detailed statement of what has been agreed between the parties to the dispute.A number of copies of the agreement shall be signed, so that each of the parties and the mediator shall have an original copy of the settlement agreement.For the settlement agreement to be enforceable, it shall be signed by the parties and, by the person whose consent on the subject of the dispute is required, and the mediator. (Emphasis added.)
The outlines of the settlement agreement set forth in this article, with two notable exceptions, will look very familiar to most mediators. The parties need a document with sufficient particularity to allow the parties to properly perform the agreement, for enforcement if performance problems arise later, and for the court so it can "authenticate" the settlement agreement, which I discuss below.
In the U.S., you will see a number of approaches to drafting the final settlement agreement. Before the parties terminate the session, the mediator will help draft a list of agreed terms. Based on that list, either the mediator or the lawyer for one of the parties will create the first draft of the agreement. Like any contract drafting process, the drafts will go back and forth between the parties until the language satisfies both lawyers. In some states, if the mediator is not licensed to practice law in that state, he or she cannot draft the settlement agreement. That act could be punished under laws governing the unauthorized practice of law.
In less complicated matters, where the parties appear pro se, the mediator will draft the settlement agreement, but he or she will advise the parties to have a lawyer look over it before they sign it. Parties can ignore that advice and sign it without a lawyer's input.
Article 24 says the mediator will "execute" the settlement agreement. The word "execute" has several definitions, one of which is to "make or produce," while another is to "do what is provided or required by." One definition suggests the mediator is the drafter, with little participation by the parties. The second definition leaves room for party participation in the drafting, and the mediator plays the role of ensuring it is in writing, signed, copied, and filed with the Clerk Office of the court under Article 24.
In any event, a well-trained mediator will handle the drafting process in a way consistent with the nature of the dispute and the needs of the parties.
I mentioned my concern with two provisions of Article 24. The first provision causing me concern is the disclosure of the expert opinion in the settlement agreement. In two earlier posts, I explained the conflict created between Article 30 governing confidentiality and Article 24 governing the settlement agreement.
Article 30 states that a confidential document includes "[a]ny document prepared for use during the mediation."
Article 24 requires the inclusion in the settlement agreement of the "[n]ame of any expert appointed in the dispute and the expert opinion he provided." Article 25 requires the mediator to file the settlement agreement with the Clerk Office of the court, thus making its contents available to the court and its staff, and perhaps the public.
In the U.S., any opinion generated by a neutral fact- or legal-expert would be deemed a communication "prepared for use during the mediation." Accordingly, it would be confidential. Obviously, the parties could waive the confidentiality of the opinion. But, the Qatari Mediation Law removes party control over this disclosure. If I were a party mediating under this law, I would not want any expert opinions in writing. In that way, I might prevent a forced disclosure.
The second provision of Article 24 causing me concern is the requirement that the mediator sign the settlement agreement in order for it to be enforceable. The mediator is a neutral. He is not a party to the dispute. He is not bound by the settlement agreement as a performing contract party. Accordingly, he should not be required to sign the agreement.
So, what is the purpose of this provision? Is the mediator somehow authenticating the agreement by signing it? Should a separate signature page exist for the mediator clearly indicating his role as vouching for the existence of the settlement as opposed to vouching for the terms of the agreement? In most commercial cases, the lawyers for the parties will draft the agreement, not the mediator. My fear is that the mediator will face subpoenas to testify about the substantive terms of the agreement if one of the parties decides to enforce or contest it. In the process, the mediator may face pressure to disclose confidential communications. This risk may increase as a signatory to the agreement. So, no, no, no. It is not needed, especially when the law contemplates that the court will authenticate the agreement, as I discuss below.
Even so, mediators in Qatar will have to sign the agreement until the drafters revise this part of the law.
Filing the settlement agreement with the court
Article 25 states:
The mediator shall, within no later that seven days from the date of signing the settlement agreement by the parties, file an original copy of the settlement agreement and the agreement to appoint the mediator [the mediation agreement?] and his approval of the task assigned to him [letter of acceptance?], to the Clerk Office of the court.A request to authenticate the settlement agreement shall be submitted to the court, by one or all of the parties, or by the mediator . . . .
Thus, the last duty of the mediator is to ensure that the court is made aware of the successful completion of the mediation by filing the settlement agreement with the court clerk. The mediator may also request the court's authentication of the agreement, although how "authentication" occurs in this context is not set out in the law, especially given the confidentiality provisions of Articles 30 and 31. As noted below, authentication creates significant legal effect.
Duties of the Court in Connection with the Settlement Agreement
The court's duties in connection with the settlement agreement fall into three categories: (1) authentication of the settlement agreement; (2) case management after the parties sign the settlement agreement, and (3) enforcement of the settlement agreement.
Authentication
After the court receives a request to authenticate the settlement agreement, Article 25 instructs that:
The court shall issue its decision to authenticate the settlement agreement within seven days from the request date.After being authenticated by the court, the settlement agreement shall have the force of an executive document and it may in no way be challenged.
Under Article 26, the court may refuse to authenticate the agreement "if it is in violation of the law or public order, if it was entered into through fraud or deception, because one of the parties to the dispute lacks capacity, if it is difficult to conciliate its subject, or if it is impossible to execute one of its clauses."
Thus, if one of the parties has buyer's remorse, he or she will need to raise one of the defenses and provide sufficient proof of the defense all within the seven days required for the court to issue its decision under Article 25. And, by the way, given that the court can deny authentication if "it is impossible to execute one of its clauses" a mediator should discuss with the parties the need for a "severance clause"?
And, when is the agreement's "subject" "difficult to conciliate"? Wouldn't the parties know this before signing the agreement? Wouldn't they terminate the mediation under Article 28 and report back to the court? Then, wouldn't they return to litigation long before they signed a settlement agreement?
The language describing some of these very broad defenses is not clear. Again, this lack of clarity could be a drafting issue or a translation issue, but I anticipate this article will spawn a lot of collateral litigation over the validity of the mediated settlement agreement.
Litigated case management
Next, the court must manage the litigated case in light of the authenticated settlement agreement.
Article 15 provides: "In the event that the parties accept the mediation procedure, followed by settlement of the dispute between them[,] and registering the settlement agreement in accordance with the provisions of Article No. 25 of this law, the court shall exclude such lawsuit from the list, due to the end of the litigation therein."
The term "such lawsuit" refers to the lawsuit involving the dispute the court has referred to mediation. See Article 15.
Article 27 deals with any lawsuit relating to the settlement agreement:
If any of the parties to the settlement agreement which is authenticated by the court filed a lawsuit on the subject of the settlement agreement itself, the court shall rule inadmissibility of the lawsuit because it was adjudicated previously, and charge the party who filed the lawsuit with payment of a penalty equivalent to ten times the fees of filing the lawsuit, provided that such penalty shall not be less than twenty thousand riyals [about $5,480 US] and does not exceed fifty thousand riyals [about $13,700 US]. In the event that there is more than one person who filed the lawsuit, the penalty amount shall be shared equally by them. (Emphasis added.).
In short, a party is not permitted -- by theories of res judicata or estoppel -- to file a lawsuit related to the mediated dispute or the settlement agreement -- after the party has entered an authenticated settlement agreement -- without incurring the penalty. Thus, a party who has any buyer's remorse after mediation should express it in the authentication stage, because this article will prevent the filing of a lawsuit after the court authenticates the settlement agreement.
In addition, the court can grant relief from filing fees. Article 17 provides that: "If the dispute is settled through mediation, during the consideration of the lawsuit before the court, the person assigned to pay the judicial fees shall be relieved from payment thereof and the fees will be refunded to him if he had already paid them."
Enforcement
If one of the parties fails to perform under the settlement agreement, Article 19 applies. It provides:
In the event that either of the parties to the dispute refuses to abide by the settlement agreement that was concluded based on the mediation and before submitting before the judiciary, the court may rule against the non-obliged party as follows:
1- A penalty of not less that one thousand riyals [about $273 US] and not more than ten thousand riyals [$2,740 US], while not exceeding a quarter of the lawsuit value, even if the judgment was in his favor.2- Paying five times the fees of filing the lawsuit, not exceeding twenty thousand riyals [about $ 5,480 US], to the litigant in the lawsuit, as compensation for the expenses and charges, even if the judgment was in his favor, without prejudice to any other expenses or compensation decided by the court for any of the parties to the lawsuit. (Emphasis added.)
This article really confuses me. It relates to enforcement of the settlement agreement, but it seems to impose modest penalties on the person breaching the agreement. It mentions that the penalty action by the court comes "before submitting before the judiciary." Submitting what? A lawsuit alleging breach of contract?
Moreover, the court may impose the penalty "even if judgement was in his [the penalized party's] favor." What judgment? A ruling that the alleged breach did not happen? In short, the intent and operation of Article 19 is at best unclear and at worst inviting collateral litigation about its meaning.
Next up? A short post on mediator fees.
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