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RICS SEMINAR

FIDIC & QATAR LAW: WHAT YOU

MUST KNOW

SCOTTLAMBERT,RegionalHeadConstruction&

Infrastructure

31May2016

HotelCityCenterRotana

WestBay-Doha

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Introduction

Freedomofcontract.

Qatarlaws

mandatoryprovisions;

applyifconstructioncontractissilent;and

nobindingprecedentbutjudgments/commentaryareimportant.

Workscontracts(i.e.muqawalacontracts)(Articles682715).

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FIDIC

InternationalFederation of onsulting Engineers(commonlyknown

asFIDI ).

FIDICisthemostcommonlyusedstandardconditionsofcontractin

Qatar.

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Liquidated Damages

Clause8.7-FIDICRedBook.

TheContractorshallpaydelaydamagestotheEmployerifitfailsto

completetheworks,bytheTimeforCompletion(subjecttoanyextensionsoftime).

Suchdelaydamagesshallbetheonlydamagesduefromthe

Contractorforsuchdefault.

TherateofsuchdelaydamagesisquantifiedintheAppendixtoTender.

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Liquidated Damages: Qatar Law

IVIL ODE

Thepartiesmayagreeafixedamountofdamagesinadvance.

Acourtmaychangetheamountofdamagestoreflecttheactualloss

suffered,andanycontractualagreementtothecontrarywillbetreatedasnullandvoid.

Needtoprovethedifferencebetweenactuallossandpre-agreed

loss.

Ifthedamagecausedisduetoaforeignelementbeyondthepartyscontrol.

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Time Bars

Clause20.1RedBook.

Thecontractormustgivenoticeofanyclaim,whetherfortimeor

money,notlaterthan28daysafterhebecameaware,oroughtto

havebecomeawareofthecausegivingrisetosuchaclaim.

TheContractorrunstheriskoflosinghisentitlementtoadditional

timeormoneyifhefailstonotify.

NotoriouslyusedbyEmployerstorestricttimeperiodsforgiving

notices.

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Time Bars: Qatar Law

Afailuretoadheretoacontractsnoticeprovisionwillnotnecessarily

restrictclaim.

CounterstoFIDIC: Theprinciplesofgoodfaith;

Causingdisproportionateharm;and

Unjustenrichment.

Whenallthesefactorscombined,acourtmaytreadcautiously.

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Limitation of Liability

Clause17.6FIDIC.

ThetotalliabilityoftheContractortotheEmployer,underorin

connectionwiththeContractotherthanunder(sic)..shallnotexceedthesumstatedintheParticularConditions.

Nottoapplyinanycaseoffraud,deliberatedefaultorreckless

misconductbythedefaultingParty.

Neitherpartytobeliabletotheotherforlossofuseofanyworks,lossofprofit,lossofanycontractorforanyindirectorconsequential

lossordamagewhichmaybesufferedbytheotherpartyin

connectionwiththecontract.

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Limitation of Liability: Qatar Law(cont)

Principleofdecennialliability.

Contractorandengineer/supervisingarchitectjointlyliableto

compensatetheEmployerforaperiodoftenyearsfromtheproject

handoverdateifthe:

buildingsufferstotalcollapse;

buildingsufferspartialcollapse;or

thestabilityofthebuildingisthreatened.

Strictliability,cannotbewaived.

Claimstobebroughtwithin3yearsfromdiscoveryofdefect.

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Variations

Clause13.1FIDICRedBook.

VariationsmaybeinitiatedbytheEngineeratanytimepriortoissuingthe

Taking-OverCertificatefortheWorks,eitherbyaninstructionorbyarequest

fortheContractortosubmitaproposal.

ContractortobeboundbyeveryVariationunlessitgivespromptnoticetothe

EngineerthatitcannotreadilyobtainGoods.Uponreceivingsuchnotice,Engineertocancel,confirmorvarytheinstruction.

Variationtoincludechangestothe:

changestothequantities,qualityofanyitemorwork;

changestothelevels,positionsand/ordimensionsofanypartoftheworks;

sequenceortimingoftheexecutionoftheWorks;

omissionofanyworkunlessitistobecarriedoutbyothers;and

anyadditionalwork,Plant,Materialorservicesnecessaryforthe

PermanentWorks. 9

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Variations Qatar Law (contd.)

UnderQatarlaw,aVariationcanbeevidencedinmanywaysoral,by

conductand/orinwriting.

Maybeprovenbyexchangeofcorrespondence,engineersconsenttothe

additionalworks,minutesofmeetings,expertdeterminationcasethroughthe

court,etc.

Re-measurementcontractsacontractormustimmediatelynotifythe

employerofanysignificantincreaseinprice.

CommonpracticeforEmployerstoinserttimebarrequirementsasapreconditiontoclaimingVariation.

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Suspension

Contractualrightsofsuspension

clause8.8FIDIC99(Employersrightsofsuspension)

TheEngineermayatanytimeinstructtheContractortosuspendprogressofpartoralloftheWorks.Duringsuchsuspension,theContractorshallprotect,storeandsecure

suchpartortheWorksagainstanydeterioration,lossordamage.

clause16.1FIDIC99(Contractorsrightsofsuspension)

IftheEngineerfailstocertifyinaccordancewithSub-Clause14.6[IssueofInterim

PaymentCertificates]ortheEmployerfailstocomplywithSub-Clause2.4[EmployersFinancialArrangements]orSub-Clause14.7[Payment],theContractormay,aftergiving

notlessthan21daysnoticetotheEmployer,suspendwork(orreducetherateofwork)

unlessanduntiltheContractorhasreceivedthePaymentCertificate,reasonable

evidenceorpayment,asthecasemaybeandasdescribedinthenotice.

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Suspension: Qatar Law (cont.)

Righttosuspendatlaw

formalities;

proportionality/goodfaith;and

risks.

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Termination

Clause16.2ofFIDIC1999-providesforterminationinaneventof

defaultbytheemployer

iftheengineerfailstoissueapaymentcertificatewithinaspecified

period;

ifthecontractordoesnotreceivetheamountdueunderapaymentcertificatewithinaspecifiedperiod;

iftheemployerbecomesbankruptorinsolvent,orgoesintoliquidation;

or

iftheemployerfailstocomplyassignmentprovisions(clause1.7),orif

thereisprolongedsuspension.

Also,iftheEmployerfailsinadducingevidenceofsufficientfundsto

paytheContractor.

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Termination (contd.)

Clause15.2FIDIC(Employersrighttoterminate).

TheEmployershallbeentitledtoterminateiftheContractor:

failstocomplywithrequirementsofperformancesecurityoranoticeto

correct;

abandonstheWorksordemonstratesnointentiontocontinueperformanceofhisobligationsundertheContract;

withoutreasonableexcusefailstoproceedinaccordancewithclause8

(commencement,delaysorsuspension)(sic).;

subcontractsthewholeoftheWorksorassignstheContractwithoutthe

requiredagreement; becomesbankrupt;or

givesoroffersbribe.

Clause15.5FIDIC(TerminationforConvenience).

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Termination: Qatar Law (contd.)

Issueofunilateralterminationofcontractsiscrucialfromboththe

EmployerandtheContractorsperspective.

Amuqawalacontractcanbeterminated

uponcompletionoftheworks;

withmutualconsent;and

withcourtorder.

Riskofwrongfulterminationlengthydisputes,legalcosts,project

delays.

Advisabletodraftclearandconciseterminationclausetoavoida

disputeoverwrongfultermination.

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Conclusion

Balancingcommonlawcontractsundercivillawcanbetricky.

DonotturnyourFIDICcontractintoaPandorasboxseekexpert

advice.

Knowyourproject-usethecorrectmodelFIDICstandardcontractasabase.

Maintainarobustdocumentmanagementteamclear,cogent

evidenceisworthitsweightingoldatthetimeofdisputes.

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THE END

Questions?

ScottLambert

RegionalHeadConstruction&Infrastructure

Email:s.lambert@tamimi.com

Phone:+97143641641

Mobile:+971564091035

mailto:s.lambert@tamimi.commailto:s.lambert@tamimi.com