Qatar Court of Cassation Shifts Its View Regarding Commercial Agency

Analysis

In 2009, the Court of Cassation issued a judgment interpreting Article 2 of Law No. 8 of 2002 (“Commercial Agency Law”) and defined the conditions that must be met to establish the existence of a commercial agency agreement between a foreign company and its local distributor in Qatar.

Article 2 defines a commercial agent as “every person exclusively licensed to distribute the goods and products or to put them on sale or circulation or to perform certain services within the scope of the agency on behalf of his principal in exchange of remuneration.” The Court held that Article 2 requires three specific conditions to be met for a commercial agency agreement to exist: exclusivity, scope of the agency on behalf of the principal and remuneration. Pursuant to the facts of the case before it in 2009, the Court found that while exclusivity and remuneration were clearly established, the local distributor failed to successfully establish the scope of the agency on behalf of the foreign company.  Therefore, the Court held that a commercial agency did not exist.