QFC Court backs confidentiality
In a landmark ruling, the Qatar Financial Centre Court has formally recognised the confidentiality of settlement negotiations, aligning its approach with international best practices and reinforcing protections for parties seeking amicable dispute resolution within the QFC.
Eversheds Sutherland has successfully argued a landmark case in the Qatar Financial Centre (“QFC”) Appellate Division of the Civil and Commercial Court (the “Appeal Court”). This is the first time the Court has clarified whether communications made during settlement negotiations should be excluded from evidence on the basis that they are privileged. This seminal judgment, in Devisers Advisory Services LLC v Zishan Anwar [2025] QIC (A) 9, sets a precedent confirming that “communications between parties made in a genuine attempt to settle a dispute are confidential and must not be used in proceedings when the attempt to settle fails.”
This ruling provides much-needed clarity for businesses operating in the QFC regarding the confidentiality of settlement negotiations and aligns the QFC with international best practices.
BACKGROUND
The dispute in this case arose from a services contract between a visa consultancy firm (the “Defendant”) and an individual (the “Claimant”), pursuant to which the Claimant paid QAR35,000 to the Defendant for the provision of advisory services related to a UK visa application. Before a visa application was submitted, the Claimant withdrew from the visa process and requested a full refund from the Defendant, alleging a breach of a promise regarding the application’s timeline. the Defendant, having already completed significant preparatory work, declined, citing a contractual clause allowing it to retain the full contract amount in case of withdrawal.
Following an exchange of correspondence and threats of legal action from the Claimant, the parties engaged in discussions to resolve the matter. These settlement negotiations, however, were unsuccessful, and the Claimant commenced proceedings before the QFC’s First Instance Circuit of the Civil and Commercial Court (the “Primary Court”). During the proceedings, the Claimant produced contemporaneous email correspondence in which he alleged that the Defendant had offered him a refund of QAR20,000, a claim the Defendant disputed.
In its judgment, the Primary Court relied on the content of the email to find that the value of the Defendant’ work was QAR15,000. Further, the Primary Court applied Article 107 of the QFC Contract Regulations—which permits a reduction of contractually agreed damages if they are found to be “grossly excessive”—to reduce the Defendant’ fee from QAR35,000 to QAR15,000. As a result, the Primary Court ordered the Defendant to return QAR20,000 to the Claimant.
THE DEFENDANT’S GROUNDS FOR APPEAL
The Defendant sought and was granted permission to appeal on two grounds:
- a) the Primary Court erred by relying on settlement communications, which should have been subject to without prejudice privilege, to assess the value of the work performed by the Defendant; andb) the Primary Court wrongly dismissed the Defendant’s evidence as to the market value of the services performed.Eversheds Sutherland argued that the first ground raises an issue of general importance to the administration of justice in the QFC for the following reasons:a) Whilst the QFC Regulations are silent on the issue of ‘without prejudice’ privilege, the principle is consistent with the language and spirit of the QFC Regulations, which promote confidentiality and certainty in commercial dealings. Further, we highlighted that the principle of ‘without prejudice’ privilege is a cornerstone of the common law—upon which QFC law is broadly based—and is widely recognised in international best practice and other leading commercial courts, including the DIFC Court in the UAE.
b) Protecting settlement negotiations serves business interests and supports the QFC’s policy of encouraging efficient dispute resolution. Failing to recognise this principle might create a chilling effect, discouraging parties from engaging in candid discussions to resolve disputes for the fear that their concessions would be used against them in court. This might undermine the QFC’s goal of being a leading centre for alternative dispute resolution.
THE APPEAL COURT’S JUDGMENT
In its judgment, the Appeal Court allowed the appeal on both grounds and overturned the initial judgment. The Appeal Court dedicated a significant portion of its judgment to the question of ‘without prejudice’ communications, acknowledging that it had not previously arisen in the context of settlement discussions for decision in the jurisdiction and was of “significant importance.”
In its reasoning, the Appeal Court adopted the framework set out in Manan Jain v Devisers Advisory Services LLC [2024] QIC (A), analysing QFC law, common law principles, the practice of other commercial courts, and the needs of international business. The Appeal Court found a strong policy basis for treating settlement negotiations as confidential, referencing the QICDRC Mediation Rules and Qatar’s law on mediation (Law No. 20 of 2021). It concluded that the QFC should follow the widely accepted principle that “communications between parties made in a genuine attempt to settle a dispute are confidential and must not be used in proceedings when the attempt to settle fails.”
The Appeal Court also held that “it is not necessary that the discussions are formally marked ‘without prejudice’; the task of the Court is to determine whether the statements or offers were made in a genuine attempt to settle the dispute.”
Applying this newly established principle to the facts, the Appeal Court found that the offer referred to by the Primary Court was clearly made during genuine attempts to settle the dispute. Consequently, the Appeal Court held that the Primary Court should, therefore, not have used that communication to support its assessment.
IMPLICATIONS FOR THE BUSINESS COMMUNITY
This judgment provides further clarity and certainty for businesses operating in the QFC. By formally recognising the principle of ‘without prejudice’ privilege in the context of settlement discussions, the Appeal Court has strengthened the framework for amicable and cost-effective resolution of disputes outside of formal court proceedings. This judgment aligns the QFC with international best practice, and encourages parties to resolve disputes amicably and without the fear that concessions or admissions made during negotiations will be used against them in subsequent litigation.
Text by:
- Alexander Whyatt, partner, Eversheds Sutherland, Doha
- Omid Mousavi, senior associate, Eversheds Sutherland, Doha
