Qatar Merger Control Questons. - Sharq Law Firm · Shaqr Law FirmSharq Law Firm Qatar Merger...

شـرق للمـحـامـاةSharq Law Firm

Qatar Merger ControlQuestons.

Media Analysis

www.sharqlawfirm.com

1. Have there been any recent developments regarding the Qatar merger control regime and are any updates/developments expected in the coming year? Are there any other ‘hot’ merger control issues

in Qatar?

Shaqr Law FirmSharq Law Firm Qatar Merger Control

Qatar is one of the early states within the GCC and Arab region to adopt a special regime regarding the organization of competition between juristic companies and market players in order to provide for a fair and dynamic market.

Merger control, in general, is organized by Law No. (19) of the year 2006 regardingProtection of Competition and the Prevention of Monopolistic Practices (hereinafterreferred to as the “Law”) and its Executive Regulations no. (61) of the year 2008 (hereinafter referred to as the “Executive Regulations”). Since the enactment of theLaw and the Executive Regulations there have been no amendments thereto. However,Qatar is witnessing a legislative revolution especially regarding laws and regulationsof economic and commercial nature to make sure that the State of Qatar remain attractive to the foreign investment, therefore we expect that the Law might beamended to correspond the developments in the Qatari market specially because the Law and the Executive Regulations are still in their very early stages, and at thetime of writing, there remain some gaps in the Law and the Executive Regulations, and consequently some uncertainty to the requirements and obligations of the Lawand Executive Regulations.



Shaqr Law FirmSharq Law Firm القرار ( 33 ) والعدالة الناجزة

فقد نصت املادة ( 2 ) منه عىل أنه : " تختص اللجنة بالفصل بقرار مســبب ؛ عىل وجه االســتعجال يف جميع املنازعات اإلدارية الســابقة عىل إبرام العقد

والناشــئ عــن تطبيــق احــكام قانون تنظيم املناقصات واملزايدات والئحته التنفيذية املشــار إليه� " فيوضــح هذا النص أمرين أوله� أن املرشع أخرج

النزاعات الناشئة عن تطبيق أحكام قانون تنظيم املنازعات واملزايدات والئحته التنفيذية من دائرة االختصاص الوال¯ للقضاء (دوائر املنازعات االدارية)

؛ وجعل الفصل فيها من اختصاص لجنة فض املنازعات املنشــأة ·وجب هذا القرار وهذا لض�ن حســم تلك النزاعات يف أقرص وقت ممكن؛ حيث أرتأى

املرشع أن حجم النزاعات املعروضة والتي تعرض عىل القضاء يحول دون حســمها بالرسعة املطلوبة ؛ فقرر أن يحيل قدراً من تلك النزاعات إىل لجان

متخصصة ·ا يضمن رسعة حســمها والفصل فيها حرصاً منه عىل تهيئة مناخ إقتصادي جاذب لالســتث�ر .

أما األمر الثاÈ الذي يتضح من نص املادة املذكورة أن املرشع قىض فيه بأن اللجنة تفصل يف املنازعات التي تدخل يف دائرة اختصاصها عىل وجه الرسعة م�

يحقق فلسفة وعلة القرار.

ك� الزمت املاده ( 4 ) من القرار صاحب الشأن أن يتقدم بطلب الفصل يف املنازعات اإلدارية خالل ثالثÌ يوماً من تاريخ إعالنه بالقرار املطعون فيه أو ثبوت

علمه به عل�ً يقينياً أو إخطاره بأي وسيلة تفيد العلم ؛ فبذلك قرر املرشوع ميعاداً قصÎاً لطلب الفصل يف املنازعات التي اختص بالفصل فيها اللجنة املنشأة

·وجبه، حيث حدده بثالثÌ يوماً فقط وذلك باملقارنة ·يعاد الطعن عىل القرارات األدارية املقرر ·وجب القانون رقم ( 7 ) لســنة 2007 بشــأن الفصل

يف املنازعات اإلدارية حيث كان يقرر يف املادة ( 6 ) منه بأن ميعاد رفع دعوى اإللغاء ستون يوماً من تاريخ نرش القرار اإلداري املطعون فيه يف الجريدة

الرســمية أو يف النرشات التي تصدرها الجهات األدارية أو إعالن صاحب الشــأن به ؛ أو ثبوت علمه به عل�ً يقينا ؛ وبذلك يكون املرشع قد قرص ميعاد

تقديم طلب الفصل يف املنازعات األدارية املنصوص عليها يف القرار ( 33 ) لسنة Ò 2017اشياً مع فلسفة القرار وهدفه .

ويف هذا اإلطار أيضا ألزمت املادة ( 9 ) اللجنة بعدم تأجيل الطلب أكÔ من مرة لذات السبب ك� ألزمت املادة ( 11 ) اللجنة بأن تصدر قرارها يف موضوع

النزاع خالل شهرين من تاريخ تقدÕه من صاحب الشأن وسمحت لها بتمديد هذه املدة ملدة واحدة م�ثلة ؛ فأراد بذلك املرشع ان ال تتجاوز مدة الفصل

يف النزاع أربعة أشهر. ذلك م� يعكس ويحقق رغبة املرشع يف رسعة حسم تلك النزاعات م� يحقق استقرار يف املعامالت االستث�رية ويهئ من ثم مناخ

جاذب لإلستث�ر

Connect With Us.

SharqLawFirm sharq-law-firm@SharqLawFirm @SharqLawFirmSharq Law Firm

القرار ( 33 ) والعدالة الناجزة



2. Under Qatar merger control law, is the control test the same as the EU concept of ‘decisive influence’? If not, how does it differ and what is

the position in relation to 'minority shareholdings'?

Neither the Law nor the Executive Regulations address the concept of “decisive influence” per se, but it appears that the Law has been drafted in an attempt to reflectcertain criteria of the EU regime on competition. In this regard, the Law provides for certain concept such as (i) merger control, (ii) abuse of dominant position, and (iii)restrictive agreement(s).

Although, the Law does not provide a specific provision in relation to protection of“minority shareholders”, it protects the rights of “minority shareholdings” through,but not limited to, (1) a mandatory filing requirement as per Article (10) of the Lawto supervise the transaction conditions which of course would include the minorityshareholders rights, (2) in case of acquisition of 40% in a company, the acquirer isobliged as per Article (288) of the Commercial Companies Law no. (11) of 2015 totake the necessary procedures and actions to protect the minority shareholders’ right, and (3) in case of merger or acquisition of a joint stock company listed in thestock exchange, the capital market authority in Qatar (i.e. Qatar Financial Market Authority) plays its own role regarding the supervision of maintaining the minorityshareholders rights in accordance to its own regulations.

3. Are joint ventures caught by the national merger control provisions (including non-structural, cooperative joint ventures)?

In general, joint ventures are not caught by the Law. However, it should be noted that as per Article (10) of the Law, only joint ventures that would create a dominantmarket position fall under the scope of the Law, and consequently would trigger the requirement of mandatory filing as per the said Article.



4. What are the merger control thresholds and would a purely foreign-to-foreign transaction be caught (commenting on any ‘effects’

doctrine/policy if relevant)?

The applicable thresholds have not yet been defined in neither the Law nor the Executive Regulations and these thresholders might differ according to the transaction nature and/ or the industry concerned. However, we might considerthe threshold provided in Article (288) of the Commercial Companies Law no. (11) of 2015 as the applicable threshold (i.e. 40% of the company’s shares) aslong as such percentage would create a dominant market position in the meaningprovided in Article (10) of the Law.

In addition, the Law and Executive Regulations apply to all entities operating in the State of Qatar except state owned bodies/ entities. In addition, by readingthe relevant articles in the Law, some of the prohibited/ restricted practices mightbe interpreted as foreign to foreign transactions that might have a negative “effect” on the competition in the Qatari market. Thus, we may conclude that the Law and Executive Regulations apply to private owned entities operating inthe State of Qatar, as well as to activities that take place outside of the Stateof Qatar and have an effect on the competition in the Qatari market.



5. Are there any specific issues parties should be aware of when compiling and calculating the relevant turnover for

applying the jurisdictional thresholds?

As mentioned in question no. (4) above, the official thresholds have not been defined. In addition there are some requirements/ considerations under Article (10) and (11) of the Law, that should be taken into considerationby the parties in a transaction that might imply a dominant market position.Such requirements/ considerations are as follows:

Not only merger is caught under the Law, but also acquiring assets, ownership rights, usufruct, purchasing of shares, cartels and merging the management of two juristic persons in a way that such acts implythe creation of a dominant market position.

In case parties to a transaction are about to engage in one of the aforementioned acts, one of the concerned parties shall notify the Competition Committee at the Ministry of Economy and Commerce (hereinafter referred to as the “Committee”) prior to the closing of the deal to get the approval of the Committee on the deal.

The Committee shall render its decision whether to approve ordismiss the deal within 90 days starting from the day of the applyingthe notification. Additionally, if the applicant received no responsefrom the Committee till the end of the 90 days period, the applicantshall consider the no response of the Committee as an implied approval to his application.

The application should mention the following information:

A. The applicant’s name, capacity, I.D number, nationality, company’s name and its C.R. number.

B. Name and details of the relevant parties in the deal including their name, nationality, nature of the activity, headquarter and C.R. number.

C. Defining the reason of the notification (e.g. merger, acquisition, cartel, join venture).

D. Effects of the deal whether negative or positive.

E. Other disclosure information related to the concerned parties and the deal such as the targeted market and natureof the activity subject matter of the deal, and production capacity of the concerned parties to the deal.

F. Acknowledgment from the applicant that it will not close the deal prior to obtaining the Committee’s decision or after the 90 days period ends without receiving a response from the Committee.



E. Other disclosure information related to the concerned parties and the deal such as the targeted market and nature of the activity subject matter of the deal, and production capacity of the concernedparties to the deal.

F. Acknowledgment from the applicant that it will not close the deal prior to obtaining the Committee’sdecision or after the 90 days period ends without receiving a response from the Committee.

The Committee may not apply the abovementioned mandatory filing if the Committee is of theopinion that the deal would assist in the economic development of the country in a way that compensate any detriment to competition.

The Committee reserves its right to revoke its decision given on the abovementioned application/deal if the information it received from the concerned parties was untrue or fraudulent.



6. Where the jurisdictional thresholds are met, is notification mandatory and must closing be suspended pending

clearance?

As stated above, the Law does not provide for a specific jurisdictional thresholds, but we might apply the threshold mentioned in Article (288) of the Commercial Companies Law no. (11) of 2015 as the applicable threshold (i.e. 40% of the company’s shares) as long assuch percentage would create a dominant market position in the meaning provided in Article (10) of the Law.

Moreover, the notification is suspensory, which means the parties cannot close the deal prior to getting the Committee’s decision or if the 90 days period ended without any response from the Committee.

7. Is it possible to close the deal globally prior to local clearance?

We are of the opinion that it is always unadvisable to close the deal globally prior to obtaining the local clearance.

8. Is there a deadline for filing a notifiable transaction and what is the timetable thereafter for review by the Competition Protection Council?

There is no deadline on the side of the applicant/ parties to the deal, but theCommittee is obliged, as per the Law, to respond to the notification within 90 days starting from the date of delivering the notification/ application to the Committee, or it may not respond within 90 days, and the parties shouldthen consider such silence as an approval as long as they did not receive anyresponse within 90 days.



9. Who is responsible for filing a notifiable transaction (noting also whether there is a

specific form/document used and an applicable filing fee)?

Any one of the concerned parties to the deal may file the notification before the Committee(preferably the local party if the deal is taking place on a global scale). There is a templateissued by the Committee for the purpose of disclosing some details and information regarding the deal. Moreover, as of the date of writing, there is no filing fees imposed bythe Committee

10. Please confirm/comment on the penalties for failing to notify or suspendtransactions pending clearance and the Competition Protection Council's record/stance in terms of pursuing parties for failing to notify relevant transactions (commenting, if relevant, on any statute of limitations regarding sanctions for infringements of the applicable law).

If the parties failed to comply with the provisions of the Law which relate to the mandatoryfiling, the party (ies) in default shall be punished by fine with a minimum of Qatari Riyals100,000 and a maximum of Qatari Riyals 5,000,000. Moreover, in all cases the Court shall undertake to confiscate the profits resulting from the non-compliant activity, andany other profits the offender may have obtained by means of unlawful competition.

In addition to the above, the Law also provides that the person who is in charge of the actual management of the defaulting or non-compliant juristic person shall also be punished by the same aforementioned fine in case he was aware of such wrongdoing orhis management contributed to the occurrence of the offence. Moreover, the juristic person shall be jointly liable to pay whether compensations or financial sanctions in casethe offences committed by one of its employees or on its behalf or for its benefit.



11. Are there any other 'stakeholders' other than the Competition Protection Council (for example, any ‘sector regulators’ who might

have concurrent powers)?

For the completion purpose, there is only the Committee which is responsible for supervising the mandatory filing requirement due to any act that might produce a dominant market position.

12. Is there any discretion to review transactions that fall below the notification thresholds?

As stated above, the Law does not provide for a specific jurisdictional thresholds, butwe might apply the threshold mentioned in Article (288) of the Commercial CompaniesLaw no. (11) of 2015 as the applicable threshold (i.e. 40% of the company’s shares)as long as such percentage would create a dominant market position in the meaningprovided in Article (10) of the Law. Moreover, the Committee has the right to exemptthe parties to a deal from the mandatory filing requirement in case the Committee is of the opinion that the deal would assist in the economic development of the country in a way that compensate any detriment to competition, as per Article (11) of the Law.

Qatar Merger Control Questons. - Sharq Law Firm · Shaqr Law FirmSharq Law Firm Qatar Merger...

Documents

Transcript of Qatar Merger Control Questons. - Sharq Law Firm · Shaqr Law FirmSharq Law Firm Qatar Merger...