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Qatar Crisis: Investor's Standing



The majority of proffesional community in London is not aware of Qatar situation ("Barclays charged a second time over Qatar cash injection" in Financial Times is about a different thing). It is mostly because of the majority of cross-border projects / investments were either local or between Arab partners, and no global players were involved in domestic economy development. Subsequently the legal advice on the Qatar projects was delivered by reginal or domestic firms. Gutovska Law Office had though several clients with sufficient interest in Qatar economy and advised on legal solutions to secure their interest during the crisis. The current situation is worth considering as it may create a precedent for similar ones in other parts of the world.

Currently the UAE, KSA and others are technically violating the existing BITs and WTO rules, claiming the predominance of national safety and sovereign autonomy to justify the abandonment of Qatar ties, -- the situation a little similar to Iran's one, but still unique in a modern world. I am very much surprised that the voice of foreign investor is not heard at all in these circumstances (as if there was no FDI at all), while it should be nearly screaming for help. The extra-cost due to re-routing of goods, replacing personnel from blockading countries and simply not having access to current facilities, if in case of an investor of the country imposing restrictions, is already a huge set of grounds for another arbitration; probably only a really strong hope for upcoming settlement prevents it to happen.

One of Gutovska Law Office clients from Europe participating in a project in Qatar solved it simpler: we've just sold the stock to the domestic partner, but would everyone do the same? And, actually, would there be an existing possibility for everyone to quit peacefully? While it is difficult to make any predictions, it is certainly possible to use all possible legal mechanisms to protect the investment in Qatar, including structuring, using letter of credits, guarantees and ad hoc agreements with government.

#Qatar #embargoes #Gulf #corporate #crossborder

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