German companies lament the questionable business ethics in Qatar. Entrepreneur Holger Thorsten Schubart: "I feel betrayed. Qatar is utterly unsuited to host the World Cup in 2022."
Soccer's World Cup is to be hosted in Qatar in 2022, and many German companies that had been commissioned to take on assignments in preparation for this event are now lamenting the questionable business ethics of the tiny Gulf State. Lawyers and consultants still struggle to mediate in the hope of reaching an equitable resolution, but as of yet, no signs of success can be reported.
One of the entrepreneurs negatively affected by this regrettable state of affairs is Holger Thorsten Schubart, chief executive of the corporate group the Principal. Schubart was contracted by the royal family of Qatar to arrange financing for a multibillion dollar project on the basis of bank guarantees issued in the capital city of Doha. The contract clearly stipulates the payment of a commission for services rendered, but to date the sum agreed upon has not been paid. Now, after repeated attempts to settle the matter face to face in accordance with Middle Eastern custom, Schubart is forced to conclude that he has been betrayed.
The original plan had been to build a gigantic shopping complex in Qatar's capital city of Doha. The project was scheduled for completion in time for the commencement of the World Cup in 2022. Schubart had come to an agreement with Sheikh Nayef Bin Suhaim Bin Hamad Al Thani, a minister without portfolio acting on behalf of Qatar's government, that he would secure the necessary financing in return for a commission of two percent of the project's total cost. It was further agreed that collateral for the 2.66 billion Euro required to fund the project was to be given in the form of bank guarantees issued by several Qatar banks. A contract finalizing this agreement was signed on May 3, 2014 in which it is also stipulated that Schubart's contractual obligations are to be deemed satisfied upon the arrangement of the financing. Said contract further provides for the payment of a so-called "break-up-fee" of 0.2 percent of the contract amount in the event that the shopping complex is not built. Schubart has arranged for the necessary financing, but Qatar has not secured the bank guarantees. The Swiss consortium that Schubart had procured to finance the deal is still willing to proceed under the condition that Qatar upholds its side of the contract.
From a legal standpoint the situation is quite clear: The contract between Schubart and Qatar is legally binding. It has been notarially certified, confirmed with an Apostille by the regional court of Berlin, and even re-certified by the German Department of State. Thus, the contract's validity as a legal document is beyond reproach, but a problem exists nevertheless: On January 25, 2016 Schubart issued Sheikh Al Thani an invoice for the sum of 53.2 million Euro per the terms and conditions of the contract. This invoice was signed by the president of the regional court of Berlin and certified in the name of the German Department of State, however Qatar refuses to honor its side of the agreement. Neither the rulers of the Gulf State seated in Doha nor Saoud bin Abdulrahman Al Thani, the ambassador of Qatar in Berlin and a member of the royal family, has felt it necessary to respond to Schubart's attempts at communication.
Sadly enough, situations like this are proving themselves to be the norm in business dealings with the monarchy in Qatar. Time and time again, German companies working there have no choice but to accept the prospect of unpaid invoices, and it has now come to the point that many firms will only take on jobs against payment in advance. Furthermore, the working conditions in Qatar are often inhumane, as visitors to the country confirm repeatedly. Those who dare to question these conditions are typically either ignored or admonished to mind their own business. It would seem that there is little concern for basic human rights under the reign of the country's absolutist system, and it may very well be the case that this appalling lack of respect for the rights of others is the reason behind Qatar's inability to act as a viable contractual partner. Exploitation, not co-operation, is the primary method of doing business in this isolated Middle Eastern kingdom.
Not surprisingly, German companies typically enjoy an excellent reputation in Qatar on account of their efficiency, industriousness and honesty, but the difficult business climate makes it almost impossible for any company to work effectively in this backwards-thinking country: Untransparent competitive conditions, protracted decision-making processes and the ever-present danger of non-payment all hinder the procedure of doing business with the king and his subjects, and there is no recourse to anything resembling an unprejudiced legal system when disputes arise. In many cases there is no other choice but to abandon all hope of payment despite the fulfillment of one's contractual obligations. Holger Thorsten Schubart, however, is not willing to accept this fate, and he states: "Qatar is by no means a reliable business partner. The shocking arrogance in dealings with foreigners and the utter disregard for the rights of others make it clear that the kingdom of Qatar is an unsuitable host for the World Cup in 2022. Far from representing an opportunity for German companies, doing business with this monarchy will ultimately cost the German economy untold sums and countless jobs."
- Cross reference: Picture is available at AP Images (http://www.apimages.com) -
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Original content of: Berliner Korrespondentenbüro, transmitted by news aktuell