Kicking off in Qatar
12 December 2011 | By Dale McEwan
3 July 2012
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Qatar is gearing up to host the Fifa World Cup in a decade’s time, which means teams of lawyers are also filing in. Dale McEwan reports on their goals
The hype generated by the announcement that Qatar is to host the Fifa World Cup in 2022 has led to an influx of international firms into the Arab state. As Qatar anticipates the arrival of football teams from around the world, law firms are gearing up for a wave of construction and infrastructure-related work.
“Everyone went ’yippee’ when we got the World Cup,” says Clyde & Co partner David Salt. “Then there was a gap, but now things are moving. I’ve been here for donkey’s years and I don’t think it’s ever been so hyper. The place is looking like a metropolis.”
Waiting for the whistle
Despite the rush of construction in Qatar, the major projects, such as the building of stadia, have not yet commenced.
“There’s understandably a lot of planning, but at some point someone needs to press the button,” insists Eversheds Middle East managing partner Chris Jobson. “Time will become tight if we don’t get cracking.”
Al Tamimi & Company Doha head of office Mohamed Khodeir says he has seen a hefty amount of activity in corporate structuring for entities such as construction businesses setting up in Qatar.
“It’s a moment for everyone to have a place in anticipation of the World Cup,” says Khodeir.
The arrival of construction businesses has inevitably given firms a source of litigation work.
“From the dispute resolution perspective, the big project is the New Doha International Airport,” reveals Al Tamimi partner Hani Al Naddaf, adding that several disputes have arisen during its construction.
As Law Offices of Gebran Majdalany consultant Rukhsana Khan notes, the Qatar Financial Centre (QFC) has teamed up with the Centre for Effective Dispute Resolution in a bid to encourage people to look outside the usual court system.
“Because construction disputes will arise there will need to be alternatives,” Khan explains.
Following its work advising the Qatari bid committee on its successful effort to host the Fifa event, SNR Denton is acting for the World Cup Steering Committee on the oversight and implementation of the requirements to stage the tournament.
Firms are also looking to play a role in the development of Qatar’s first railway system, with the first section scheduled for completion by the start of the World Cup. The network is intended to link the stadia that will be used for the event. Qatari Diar and Deutsche Bahn are working on the project as part of a joint venture (JV) known as Qatar Railways Development Company. SNR Denton has moved from initially advising DB International - the international wing of Deutsche Bahn - to advising the JV.
“Now the project’s gearing up and moving to phase two, Qatar Railways is setting up a legal panel,” says SNR Denton Middle East managing partner Leigh Hall. “We have tenders for that work and hope to be on the panel for what is a truly immense project.”
Hall adds that the firm is currently helping clients to set up corporate structures so they are ready to bid when tenders go out. The first tender for the project has been delayed until the third quarter of 2012.
With businesses champing at the bit to get a slice of the Fifa action, Qatar has seen coachloads of international firms pull up in recent times. During this year alone Baker & McKenzie, K&L Gates, Herbert Smith, McGrigors and Clifford Chance have all announced office launches in Doha.
As Hassan A Alkhater Law Office consultant John Whatnall explains that until fairly recently most firms serviced Qatar out of Dubai. But the impact of the financial crisis has meant firms are looking to countries that have money to spend.
“We see an announcement almost every week that a firm’s coming, thinking of coming or has a licence,” says Jobson. “For me, firms need to think carefully about whether their niche - what they’re really known for - is relevant here without regional support and a regional track record.”
“It will be interesting to see what happens going forward,” says Simmons & Simmons partner Andrew Wingfield. “People think there’s a lot of work, but the local market’s competitive and price-sensitive. It’s a small market. For a country the size of Yorkshire there are 26 firms in the QFC on top of the local firms that are here already.”
Wingfield believes that number will probably grow to 30 in three months’ time. He also predicts that some firms may even pull out before the first whistle of the Fifa event is blown. Any attempts to have between 20 and 30 lawyers in Qatar in the next year are “unrealistic”, he says, unless firms plan to make the region the centre of their activities.
“There’ll be overlawyering, but that will all disappear when the World Cup’s over,” says Salt at Clydes.
“Do we have plans to grow in Qatar? The answer is, absolutely yes, but caution is the word,” reveals Jobson, who adds that no one can ignore the wider political dynamics and the chance of Qatar being affected by the global economic crisis.
Local outfits do not seem to be fazed by the arrival of international firms, as they will still be required to act as local counsel.
“It will mean more work,” states Osman Mekki, a partner at Sultan Al-Abdulla & Partners.
In a change of strategy, SNR Denton transformed its Middle East management structure into a more regionally focused setup earlier this year. Hall became Middle East managing partner, with the firm also appointing partners to lead its sector focuses across the area. A regional budget was created to replace individual office budgets.
“We decided we had a great client base, but we weren’t making the most of serving our clients’ needs,” explains Hall. “There are seven or eight jurisdictions here. While they’re different, they’re also quite parochial.”
This move towards a regional focus seems fitting given the news that Qatar is taking steps to promote cross-Gulf Cooperation Council (GCC) mergers between businesses. A new law will grant companies from other GCC states the right to establish operations in Qatar.
“With the dynamics of the market this could be an open window, especially in the property sector,” predicts Al Tamimi’s Khodeir.
In other developments, Khodeir anticipates movement on the capital markets side due to the creation of a junior market for small and medium-sized enterprises (SMEs) in Qatar. The move will allow SMEs to be listed in accordance with less stringent regulations, as well as giving them access to additional funds.
“We believe this will open up the equity market,” says Khodeir.
“There are a lot of big family-owned businesses that have activities in all fields,” adds Al Tamimi colleague and senior associate Frank Lucente. “This may be more attractive to them.”
Al Tamimi is looking to be one of the firms on the panel of Qatari Diar Real Estate Investment, as part of a project that sees further construction activities in Qatar. Qatar’s newest planned city, Lusail, is being developed by Qatari Diar and will accommodate approximately 200,000 residents.
Over in Bahrain, Qays H Zu’bi Attorneys & Legal Consultants has just announced plans to merge with fellow local firm Hatim S Zu’bi & Partners. The tie-up will create an outfit of around 25 lawyers, including approximately four partners.
Name partner Qays Zu’bi set up his firm in 2001 after working for Hatim S Zu’bi & Partners, his father’s firm, for 17 years. Qays Zu’bi says the litigation capabilities of Hatim S Zu’bi, in particular lawyer Hugh Stokes, will allow the merged firm to take on more cases. Prior to establishing his firm, Qays Zu’bi was executive resident partner at White & Case, managing its Bahrain office.
Qays H Zu’bi is in the process of setting up an office in Qatar.
The long-delayed Qatar Bahrain Causeway is expected to build relations between the two states, he explains.
The Qatar office is likely to specialise in litigation, oil and construction work. Qays H Zu’bi has an office in Dubai, while Hatim S Zu’bi has a Jordan base.
Doing a job
In terms of work in Bahrain, the government’s commitment to PPPs has been keeping Norton Rose busy, according to partner Joanne Emerson-Taqi.
The firm is advising the Ministry of Finance and the Ministry of Works in Bahrain on the Tubli waste water treatment PPP project, together with HSBC and engineering specialist Fichtner. Norton Rose also acted as international counsel in what was Bahrain’s first waste water treatment plant in Muharraq.
The firm has been involved on a number of PPP projects in recent times, including developments in the social housing sector. Further growth in PPP is expected, especially given the GCC’s establishment of a $20bn (£12.8bn) fund for the development of Bahrain and Oman. Each state has been awarded $10bn in a bid to upgrade housing and infrastructure over a 10-year period in response to public protests over high unemployment and limited economic prospects. Projects stemming from this are expected to generate further work for firms.
“We hope this money will start trickling in and grease the wheels to get things moving,” says Qays Zu’bi.
As Emerson-Taqi explains, there are signs that Bahrain is reducing its focus on financial activities and pushing towards manufacturing in light industries.
“The Bahrain market’s not dead - it’s just going through a reinvention,” she says. “You have to be flexible.”