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." (FOTO)

Berlin (ots) -

- Cross-reference: Picture is available at AP Images
(http://www.apimages.com) and
http://www.presseportal.de/bilder -

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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