Qatar: Assignment of Rights and Obligations under the Qatari Civil Code

Analysis

Lenders providing financing for the construction or purchase of assets such as a power plant, ship or building often stipulate that the receivables arising from the asset should be assigned to the lenders.

Once such receivables are assigned to the lenders, these receivables are ‘ring fenced' thereby securing the cash flows from the asset for servicing the payments under the loan provided in connection with the asset.

Generally, an assignment is a process of transferring rights and/or obligations held by one party-the assignor to another party-the assignee. Assignment agreements relating to assignment of rights (or receivables) are typically bilateral agreements between the assignor and the assignee with a notification sent to the debtor. The assignment agreement, relating to an assignment of obligations in general is a tri-party agreement, between the debtor, the creditor and the assignee.