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RICS SEMINAR

FIDIC & QATAR LAW: WHAT YOU


MUST KNOW
SCOTT LAMBERT, Regional Head Construction &
Infrastructure

31 May 2016
Hotel City Center Rotana
West Bay - Doha

Introduction

Freedom of contract.
Qatar laws

mandatory provisions;

apply if construction contract is silent; and

no binding precedent but judgments/commentary are important.

Works contracts (i.e. muqawala contracts) (Articles 682 715) .

FIDIC

International Federation of Consulting Engineers (commonly known


as FIDIC).
FIDIC is the most commonly used standard conditions of contract in
Qatar .

Liquidated Damages

Clause 8.7 - FIDIC Red Book.


The Contractor shall pay delay damages to the Employer if it fails to
complete the works, by the Time for Completion (subject to any
extensions of time).
Such delay damages shall be the only damages due from the
Contractor for such default .
The rate of such delay damages is quantified in the Appendix to
Tender.

Liquidated Damages: Qatar Law

CIVIL CODE
The parties may agree a fixed amount of damages in advance.
A court may change the amount of damages to reflect the actual loss
suffered, and any contractual agreement to the contrary will be
treated as null and void.
Need to prove the difference between actual loss and pre-agreed
loss.
If the damage caused is due to a foreign element beyond the partys
control.

Time Bars

Clause 20.1 Red Book.


The contractor must give notice of any claim, whether for time or
money, not later than 28 days after he became aware, or ought to
have become aware of the cause giving rise to such a claim.
The Contractor runs the risk of losing his entitlement to additional
time or money if he fails to notify.

Notoriously used by Employers to restrict time periods for giving


notices.

Time Bars: Qatar Law

A failure to adhere to a contracts notice provision will not necessarily


restrict claim.

Counters to FIDIC:

The principles of good faith;

Causing disproportionate harm; and

Unjust enrichment.

When all these factors combined, a court may tread cautiously.

Limitation of Liability

Clause 17.6 FIDIC.


The total liability of the Contractor to the Employer, under or in
connection with the Contract other than under (sic)..shall not
exceed the sum stated in the Particular Conditions.
Not to apply in any case of fraud, deliberate default or reckless
misconduct by the defaulting Party.
Neither party to be liable to the other for loss of use of any works,
loss of profit, loss of any contract or for any indirect or consequential
loss or damage which may be suffered by the other party in
connection with the contract.
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Limitation of Liability: Qatar Law


(cont)
Principle of decennial liability.
Contractor and engineer/supervising architect jointly liable to
compensate the Employer for a period of ten years from the project
handover date if the:

building suffers total collapse;

building suffers partial collapse; or

the stability of the building is threatened.

Strict liability, cannot be waived.


Claims to be brought within 3 years from discovery of defect.

Variations
Clause 13.1 FIDIC Red Book.
Variations may be initiated by the Engineer at any time prior to issuing the
Taking-Over Certificate for the Works, either by an instruction or by a request
for the Contractor to submit a proposal.

Contractor to be bound by every Variation unless it gives prompt notice to the


Engineer that it cannot readily obtain Goods. Upon receiving such notice,
Engineer to cancel, confirm or vary the instruction.
Variation to include changes to the:

changes to the quantities, quality of any item or work;

changes to the levels, positions and/or dimensions of any part of the


works;

sequence or timing of the execution of the Works;

omission of any work unless it is to be carried out by others; and

any additional work, Plant, Material or services necessary for the


Permanent Works.

Variations Qatar Law (contd.)

Under Qatar law, a Variation can be evidenced in many ways oral, by


conduct and/or in writing.
May be proven by exchange of correspondence, engineers consent to the
additional works, minutes of meetings, expert determination case through the
court, etc.
Re-measurement contracts a contractor must immediately notify the
employer of any significant increase in price.
Common practice for Employers to insert time bar requirements as a
precondition to claiming Variation.

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Suspension

Contractual rights of suspension

clause 8.8 FIDIC 99 (Employers rights of suspension)

The Engineer may at any time instruct the Contractor to suspend progress of part or all
of the Works. During such suspension, the Contractor shall protect, store and secure
such part or the Works against any deterioration, loss or damage.

clause 16.1 FIDIC 99 (Contractors rights of suspension)

If the Engineer fails to certify in accordance with Sub-Clause 14.6 [Issue of Interim
Payment Certificates] or the Employer fails to comply with Sub-Clause 2.4 [Employers
Financial Arrangements] or Sub-Clause 14.7 [Payment], the Contractor may, after giving
not less than 21 days notice to the Employer, suspend work (or reduce the rate of work)
unless and until the Contractor has received the Payment Certificate, reasonable
evidence or payment, as the case may be and as described in the notice.
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Suspension: Qatar Law (cont.)

Right to suspend at law

formalities;

proportionality/good faith; and

risks.

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Termination

Clause 16.2 of FIDIC 1999 - provides for termination in an event of


default by the employer

if the engineer fails to issue a payment certificate within a specified


period;

if the contractor does not receive the amount due under a payment
certificate within a specified period;

if the employer becomes bankrupt or insolvent, or goes into liquidation;


or

if the employer fails to comply assignment provisions (clause 1.7), or if


there is prolonged suspension.

Also, if the Employer fails in adducing evidence of sufficient funds to


pay the Contractor.
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Termination (contd.)
Clause 15.2 FIDIC (Employers right to terminate).
The Employer shall be entitled to terminate if the Contractor:

fails to comply with requirements of performance security or a notice to


correct;

abandons the Works or demonstrates no intention to continue


performance of his obligations under the Contract;

without reasonable excuse fails to proceed in accordance with clause 8


(commencement, delays or suspension) (sic).;

subcontracts the whole of the Works or assigns the Contract without the
required agreement;

becomes bankrupt; or

gives or offers bribe.

Clause 15.5 FIDIC (Termination for Convenience).


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Termination: Qatar Law (contd.)

Issue of unilateral termination of contracts is crucial from both the


Employer and the Contractors perspective.
A muqawala contract can be terminated

upon completion of the works;

with mutual consent; and

with court order.

Risk of wrongful termination lengthy disputes, legal costs, project


delays.
Advisable to draft clear and concise termination clause to avoid a
dispute over wrongful termination.

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Conclusion

Balancing common law contracts under civil law can be tricky.


Do not turn your FIDIC contract into a Pandoras box seek expert
advice.

Know your project - use the correct model FIDIC standard contract
as a base.
Maintain a robust document management team clear, cogent
evidence is worth its weight in gold at the time of disputes.

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THE END

Questions?
Scott Lambert
Regional Head Construction & Infrastructure
Email: s.lambert@tamimi.com

Phone: +971 4 3641641


Mobile: +971 56 4091035

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