fidic and qatar law 31 may 2016
TRANSCRIPT
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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:[email protected]
Phone:+97143641641
Mobile:+971564091035
mailto:[email protected]:[email protected]