• Search

Construction Arbitration

Last verified on Wednesday 12th July 2017

Qatar

Craig Shepherd and Sean Whitham

    Legal system

  1. 1.

    Is your jurisdiction primarily a common law, civil law, customary law or theocratic law jurisdiction? Are the laws substantially derived from the laws of another jurisdiction and, if so, which? What instruments have legal force and effect? Who are the lawmaking bodies? How and where are new laws published? Can laws be passed with retrospective effect?

    1. The State of Qatar is primarily a civil law jurisdiction. Shari'a (Islamic) law is the main source of legislation and this is enshrined in article 1 of the Constitution of Qatar. The Qatar Civil Code (Law No. 22 of 2004) (the Civil Code) is modelled on the Egyptian Civil Code, which was itself derived substantially from French civil law.

      The Shura Council is the chief legislative body of Qatar. Draft laws that have passed through the Shura Council and government are referred to the Emir (Head of State) for ratification. In the event that an exceptional matter arises which urgently requires a special law and the Shura Council is not in session, the Emir may issue a decree which will have legal power pursuant to article 70 of the Constitution. Such decree-laws are reviewed by the Shura Council once it has resumed sitting.

      New laws are published monthly in the Official Gazette by the Ministry of Justice. The Gazette is available in Arabic on the website of the Ministry of Justice. Laws take effect after publication in the Gazette and are normally not passed with retrospective effect.

      The Qatar Financial Centre (QFC) is a separate legal jurisdiction within Qatar which is based on the common law system. The QFC has its own court, the Qatar International Court and Dispute Resolution Centre, which deals with civil and commercial disputes arising in connection with contracts concluded under QFC legislation and businesses established within the QFC. 

    Contract formation

  2. 2.

    What are the requirements for a construction contract to be formed? When is a "letter of intent" from an employer to a contractor given contractual effect?

    1. Article 64 of the Civil Code provides that a contract is concluded once there has been offer and acceptance, if the subject and cause of the contract are deemed to be legal, without any breach of what is required by the law and any special formalities to conclude the contract. Unlike in common law jurisdictions, there is no requirement for offer and acceptance to be accompanied by payment or other consideration. However, the offer and acceptance must clearly evidence the mutual intention of the parties for a contract to be made and the agreement must be sufficiently clear and cover all of the essential terms. While there is no express requirement that agreements must be in writing, an agreement is less likely to satisfy the above if the contract is not in writing. The above equally applies to construction contracts. 

      A letter of intent may be contractually binding if it meets the above requirement, including that it is clear that the mutual intention of the parties was for a contract to be made.  Although the law does not specifically deal with letters of intent, article 79(1) of the Civil Code provides that an agreement will be binding if it deals with "all of the essential terms of the contract", even if it leaves certain details to be decided at a later date, so long as it does not stipulate that the agreement is subject to those details being agreed. The Civil Code does not elaborate on what would be considered an essential term, however it is likely this may include payment terms, time for completion, scope of work and contractor's warranties. In order to make sure a letter of intent is binding, it is best practice to ensure that all of the essential points are covered and clearly indicate that the parties intend to be bound by the terms as a contract, despite any details that remain to be decided subsequently. 

    Choice of laws, seat, arbitrator and language

  3. 3.

    Are parties free to choose: (a) the governing law of their contract; (b) the law of the arbitration agreement; (c) the seat of the arbitration; (d) any arbitral rules; (e) anyone to act as arbitrator; and (f) the language of the contract and the arbitration? If not, what are the limitations on choice and what happens if the parties act contrary to them?

    1. Yes, to all. However, the Law of Arbitration in Civil and Commercial Matters (Law No. 2 of 2017) (the LACCM), which governs Arbitration in Qatar, is slightly unclear in relation to (e). Article 11(1) of the LACCM provides that the arbitrator must be appointed from the accredited arbitrators listed in the Arbitrators Register held by the Ministry of Justice but goes on to state that any person can be appointed as an arbitrator, provided that they are of full legal capacity, have not been convicted by a final judgment of a felony or a misdemeanour involving moral turpitude or dishonesty, and are well-reputed and of good conduct. In addition, article 11(10) suggests that an appointing authority can appoint from its own or other lists.

    Implied terms

  4. 4.

    How might terms be implied into construction contracts? What terms might be implied?

    1. Unlike in common law jurisdictions, there is no practice of supplementing a construction contract with implied terms. Qatari law does however recognise that the parties' rights and obligations may extend beyond those expressed in the contract. Article 169(2) of the Civil Code provides that the court may look beyond the literal meaning of the words in the contract and consider the mutual intention of the parties in certain circumstances, taking into account the nature of the transaction, such as obligation to act in good faith. This is subject to the express terms of the contract. Implied terms are likely to only be employed by courts if the contract is left open to interpretation.

    Certifiers

  5. 5.

    When must a certifier under a construction contract act impartially, fairly and honestly? To what extent are the parties bound by certificates (where the contract does not expressly empower a court or arbitral tribunal to open up, review and revise certificates)? Can the contractor bring proceedings directly against the certifier?

    1. The Civil Code does not specifically deal with the obligations of certifiers. The contract may oblige the employer to ensure a certifier acts impartially, fairly and honestly.  That said, and with some exceptions for fraud or criminal conduct, the terms of the contract are likely to be enforced. A contractor may not be able to bring proceedings directly against the certifier in the absence of a contractual relationship between them, except in cases of tort or fraud in which the contractor has suffered damages as a result of the certifier's breach of duty in tort or fraud. 

    Competing causes of delay

  6. 6.

    If an employer would cause (eg, by variation) a two-week critical delay to the completion of the works (which by itself would justify an extension of time under the construction contract) but, independently, culpable delay by the contractor (eg, defective work) would cause the same delay, is the contractor entitled to an extension?

    1. The laws of Qatar do not provide any specific guidance on concurrent delay. The starting point for courts faced with this issue would be to consider the express terms of the contract. Absent any contractual guidance, the court may consider the parties' mutual intentions as inferred from the rest of the contract, and external sources such as correspondence and normal business practice. Recently, a trend has developed for courts to determine the dominant cause of the delay and attribute liability for the delay to the party who is responsible for the dominant cause, as would be the case in other jurisdictions such as the UK. Where neither cause is considered to be dominant, the court may apportion liability between the parties commensurately with their respective degrees of fault. Damages may be set off against each other. The approach of the courts is decided on a case-by-case basis.  

    Disruption

  7. 7.

    How does the law view "disruption" to the contractor (as distinct from delay or prolongation to the completion of the works) caused by the employer’s breaches of contract and acts of prevention? What must the contractor show for a disruption claim to succeed? If an entitlement in principle can be shown (eg, that a loss has been caused by a breach of contract) must the court or arbitral tribunal do its best to quantify that loss (even if proof of the quantum is lacking or uncertain)?

    1. The Civil Code does not expressly deal with disruption.  In order for contractor to successfully claim disruption by an employer, the contractor would need to establish a claim for damages. The contractor would need to prove that: (i) the employer breached its contractual obligations; (ii) the contractor suffered damage; and (iii) the damage suffered by the contractor was caused by the employer's breach. The burden of proof would lie with the contractor in these circumstances.

    Acceleration

  8. 8.

    How does the law view "constructive acceleration" (where the contractor incurs costs accelerating its works because an extension of time has not been granted that should have been)? What must the contractor show for such a claim to succeed? Does your answer differ if the employer acted unreasonably or in bad faith?

    1. There is no recognised concept of "constructive acceleration" under Qatari law. The contractor would therefore need to try to establish a basic claim for breach of contract on the basis that: (i) the employer breached its contractual obligations by not granting an extension of time, (ii) the contractor suffered damages (ie, additional costs incurred due to accelerating the works), and (iii) the damage to the contractor was caused by the employer's breach. It is unlikely that the mere lack of an extension of time would be sufficient grounds for the contractor to succeed, especially as extensions of time are not specifically provided for under Qatari law. If the employer acted unreasonably or in bad faith, this would support the contractor's claim as article 172(1) of the Civil Code provides that a contract must be performed in accordance with its provisions and in a manner consistent with the requirements of good faith. 

    Force majeure and hardship

  9. 9.

    What events of force majeure give rise to relief? Must they be unforeseeable and to whom? How far does the express or implied allocation of risk under the contract affect whether an event qualifies? Must the event have a permanent effect? Is impossibility in performing required or does a degree of difficulty suffice? Is relief available where only some obligations (eg, to make a single payment or carry out one aspect of the works) are affected or is a greater impact required? What relief is available and does it apply automatically? Can the rules be excluded by agreement?

    1. The concept of force majeure is provided for under article 204 of the Civil Code. Article 204 provides that if a party can demonstrate that a loss has arisen due to an external cause that is not of their making, the party is not liable for the damages, unless the parties have contractually agreed otherwise.

      The Civil Code does not explicitly set out the types of events of force majeure that will give rise to relief. Article 188(1) of the Civil Code provides that, where the performance of one of the parties’ obligations becomes impossible (ie, more than just difficult) for an extraneous cause beyond its control, the corresponding obligation shall cease and the contract automatically rescinded. Article 188(2) of the Civil Code provides that where there is partial impossibility, a party may request the performance of the residual obligations that remain possible to perform, or request the dissolution of the contract. Article 258 of the Civil Code permits parties to contractually agree to allocate risks for force majeure to the contractor. 

  10. 10.

    When is a contractor entitled to relief against a construction contract becoming unduly expensive or otherwise hard to perform and what relief is available? Can the rules be excluded by agreement?

    1. Article 171(2) of the Civil Code provides that where, as a result of exceptional and unforeseeable events, the fulfilment of the contractual obligation, though not impossible, becomes excessively onerous in such a way as to threaten the obligor with exorbitant loss, the court may, according to the circumstances and after taking into consideration the interests of both parties, reduce the excessive obligation to a reasonable level. This is a mandatory provision under Qatari law that parties cannot contractually exclude.  

      Article 700 of the Civil Code provides that an increase in the price of raw materials, labour or other expenditure shall not give rise to an entitlement of the contractor or otherwise vary the obligations imposed by the construction contract. This is except where the price escalation came about as a result of an "exceptional incident".  

    Impossibility

  11. 11.

    When is a contractor entitled to relief if after the contract is concluded it transpires (but not due to external events) that it is impossible for the contractor to achieve a particular aspect of the contractual specification? What relief is available?

    1. The doctrine of frustration is not specifically recognised under Qatari law. In the absence of any events of force majeure, exceptional incidents, acts/omissions of the employer, the contractor is likely to be responsible for performing its obligations in full, even where doing so would be onerous. If it does not, this may be deemed to be a breach of contract and damages may be claimed. Despite this, article 191 of the Civil Code may provide a potential way to deal with frustration as it provides that a party may decline to perform its obligation if the other has failed to perform its corresponding obligation. 

    Clauses that seek to pass risks to the contractor for matters it cannot foresee or control

  12. 12.

    How effective are contractual provisions that seek to pass risks to the contractor for matters it cannot foresee or control, for example making the contractor liable for: (a) a specified event of force majeure; (b) ground conditions that no reasonably diligent contractor could have foreseen; or (c) errors in documents provided by the employer, such as employer's requirements in design and build forms?

    1. Article 258 of the Civil Code permits the contractual allocation of risk to the contractor for events it cannot foresee or control, with the exception of the exceptional incidents contemplated by article 171(2) of the Civil Code (which cannot be contractually excluded by the parties as per article 171(3)).

      Article 259(1) of the Civil Code provides that a party may agree to discharge the other from a liability arising from its failure or delay to perform a contractual obligation, except in cases of fraud or gross negligence.

    Duty to warn

  13. 13.

    When must the contractor warn the employer of an error in a design provided by the employer?

    1. If the contract has an express obligation for the contractor to notify the employer of an error in a design within a certain time period, the contractor is required to comply with this time period. Article 686(1) of the Civil Code provides that the contractor must notify the employer immediately if there are defects in the materials provided by the employer, or other factors which may obstruct the performance of the work. Further, article 686(2) provides that the contractor is liable for the consequences if it neglects to notify the employer.

    Good faith

  14. 14.

    Is there a general duty of good faith? If so, how does it impact upon the following (where they are otherwise permitted under the construction contract): (a) the level of intervention in the works that is allowed by the employer; (b) a party’s discretion whether to terminate or suspend the contract; or (c) the employer’s discretion to claim pre-agreed sums under the contract, such as liquidated damages for delay?

    1. Article 172(1) of the Civil Code provides that a contract shall be performed in accordance with its provisions and in a manner consistent with the requirements of good faith. Under article 172(1), the court may apply the terms of a contract in accordance with general principles of good faith.  This is however subject to the express terms of the contract. A failure to act in good faith in exercising a clear right under a contract, such as to terminate the contract or claim liquidated damages, will not necessarily mean that the right is lost. The application of the duty to perform a contract in good faith under article 172(1) is likely to depend on the particular facts and circumstances. Bad faith is likely to include fraud, misrepresentation or other dishonesty. 

    Time bars

  15. 15.

    How do contractual provisions that bar claims if they are not validly notified within a certain period operate (including limitation or prescription laws that cannot be contracted out of, interpretation rules, any good faith principles and laws on unfair contract terms)? What is the scope for bringing claims outside the written terms of the contract under provisions such as sub-clause 20.1 of the FIDIC Red Book 1999 ("otherwise in connection with the contract")? Is there any difference in approach to claims based on matters that the employer caused and matters it did not, such as weather or ground conditions? Is there any difference in approach to claims for (a) extensions of time and relief from liquidated damages for delay and (b) monetary sums?

    1. Article 171 of the Civil Code provides that the contract is the law of the parties. If the contract provides for a time bar, it is likely to be enforced. Absent any issues of dishonesty, time bars are likely to apply even where a party may not have acted in good faith. An employer’s entitlement to liquidated damages is unlikely to be automatically invalidated simply because the employer has caused a delay to the works. Rather, the court has a wide discretion when determining the amount of damages and may take into account the circumstances surrounding the delay.  

    Suspension

  16. 16.

    What rights does the employer have to suspend paying the contractor or performing other duties under the contract due to the contractor’s (non-)performance, or the contractor have to suspend carrying out the works (or part of the works) due to the employer’s (non-) performance?

    1. An employer wanting to suspend payment due to the contractor's non-performance may be able to do so under article 191 of the Civil Code. The provision allows either party to refrain from performing its obligations if the other party has failed to perform its corresponding obligations, unless it is agreed to the contrary or the custom dictates otherwise. In order for the employer to rely successfully on this provision, it must ensure that the obligation of the defaulting party has already fallen due and that it is not itself acting in bad faith, which would be viewed unfavourably by the courts (eg, if the default is minor relative to the contract as a whole). Article 191 is not a mandatory provision and can therefore be contractually excluded by parties. 

    Omissions and termination for convenience

  17. 17.

    May the employer exercise an express power to omit work; or terminate the contract at will or for convenience, so as to give work to another contractor or to carry out the work itself?

    1. Termination for convenience may be expressly provided under the parties' contract, in which case it is likely to be applied according to its terms. Separately, an employer is entitled to terminate a contract for convenience under article 707(1) of the Civil Code, as long as it compensates the contractor for all of the works completed and any profit which the contractor would have made had the work been completed.

      Article 707(2) enables the court, at its discretion, to reduce the compensation payable for the profit missed by the contractor if the circumstances make such reduction fair. It is likely the court would reduce the amount to reflect the costs saved by the contractor by not having to perform the remainder of the work and the profit that the contractor makes by applying its time to other jobs.  

    Termination

  18. 18.

    What termination rights exist? Can a construction contract be terminated in part? What are the practical and financial consequences?

    1. There are several termination rights available under Qatari law: 

      • A party may terminate for convenience under article 707 of the Civil Code (see question 17);
      • A party may seek a court order to have a contract terminated, subject to notice obligations, if the other party has failed to perform some of its obligations under article 183 of the Civil Code. The claimant in these circumstances would be entitled to claim damages for the other party's breach of contract; and
      • Article 184 of the Civil Code allows a party to terminate its contract without obtaining a court order if expressly permitted by the contract. In such circumstances, the party choosing to terminate the contract may be entitled to claim damages for the other party's breach of contract.

      In the context of construction contracts, articles 688 and 689 of the Civil Code specifically allow for the employer to terminate a contract in certain circumstances relating to breach or delay: 

      • Article 688 of the Civil Code provides that where, during the progress of the work, it appears that the contractor is performing the work in a defective/incorrect manner or in breach of the contract, the employer may notify the contractor to correct the defective work within a reasonable time determined by the employer. Where this period expires without remedy, the employer may demand termination of the contract.
      • Article 689 provides that where the contractor's delays in accomplishing the work are to such an extent that it cannot possibly deliver the work within the agreed period, or if the contractor's actions indicate its intention not to perform its obligations or make the performance of its obligations impossible, the employer may demand the immediate termination of the contract.
  19. 19.

    If the construction contract provides for the circumstances in which each party may terminate the contract but does not expressly or impliedly state that those rights are exhaustive, are other rights to terminate available? If so, what are they and what are the practical and financial consequences?

    1. The parties' termination rights under the contract are, absent express provisions, in addition to the parties’ termination rights under the Civil Code set out in the response to question 18.

  20. 20.

    What limits apply to exercising termination rights?

    1. Pursuant to article 183 of the Civil Code, unless stated otherwise in the contract, a court order may be required to terminate a contract. If a party terminates a contract without first obtaining a court order, the termination may be invalid, unless subject to the exception under article 184.

      If a court order for termination is requested under article 183, the court may decide to award the party additional time to cure its breach or refuse the request for termination if the breach is considered to be relatively minor. Termination rights may be subject to any notice obligations being fulfilled in accordance with the contract and they must be exercised in good faith.  

    Completion

  21. 21.

    Does the law of your jurisdiction deem the works to be completed (irrespective of what the contract says) if, say, the employer takes beneficial possession of the works and starts using them?

    1. Under article 693 of the Civil Code, if a contractor completes the work and makes it available to the employer (and notifies the employer of this), then completion may occur if the employer takes beneficial possession of the works. If the employer rejects taking over the work despite being invited to do so under a formal notice, and does not have a good reason for doing so, the work may nonetheless be considered as handed over to the employer.

  22. 22.

    Does approval or acceptance of work by or on behalf of the employer bar a subsequent complaint? What constitutes acceptance? Does taking over the work by the employer constitute acceptance? Does this bar subsequent complaint?

    1. See the response to question 21 above. Further, under article 696(1) of the Civil Code, the contractor may not be liable for any patent defect in the works, once the work has been handed over. In cases where the defect or breach is latent and the employer only detects the defect or breach after taking over the work, the employer may notify the contractor of this and require the contractor to perform remedial works (article 696(2)). This is subject to the express terms of the parties’ contract.

      Relevantly, article 711 of the Civil Code provides for decennial (10-year) liability for defects threatening the structural stability or safety of any fixed installations or buildings. The employer must bring its claim within three years of detecting the defect or breach. 

    Liquidated damages and similar pre-agreed sums ('liquidated damages')

  23. 23.

    To what extent are liquidated damages for delay to the completion of the works treated as an exhaustive remedy for all of the employer’s losses due to (a) delay to the completion of the works by the contractual completion date; and (b) delays prior to the contractual completion date (in the absence of, say, interim milestone dates with liquidated damages for delay attaching to them)? What difference does it make if any critical delay is caused by the contractor’s fraud, wilful misconduct, recklessness or gross negligence? If so, what constitutes such behaviour and can it be excluded by agreement?

    1. Article 265 of the Civil Code allows the parties to a contract to calculate the amount of damages payable in the event of a breach or delay, such as liquidated damages. Article 266 of the Civil Code provides that liquidated damages shall not be payable if it can be proved that the party claiming damages has not suffered any loss. Similarly, article 266 permits the Court to reduce the amount of liquidated damages where it is proven that the amount is exaggerated, or the relevant obligation has been performed in part. Parties may not contract out of article 266 of the Civil Code. Under article 267 of the Civil Code, the amount of liquidated damages is a cap on the damages payable, except in circumstances of fraud or gross mistake.

      For public works contracts covered by the Tender Law (No. 26 of 2005) (Tender Law), Government Employers may impose a penalty on contractors without having regard to actual loss. The Tender Law applies to all ministries, government bodies, public institutions and authorities in Qatar – with the exception of Qatar Petroleum. The Tender Law imposes its own delay damages regime, irrespective of liquidated damages agreed by the parties.  

  24. 24.

    If the employer causes critical delay to the completion of the works and the construction contract does not provide for an extension of time to the contractual completion date (there being no "sweep up" provision such as that in sub-clause 8.4(c) of the FIDIC Silver Book 1999) is the employer still entitled to liquidated damages due to the late completion of works provided for under the contract?

    1. Article 171 of the Civil Code provides that the contract is the law of the parties. Absent an agreement between the parties or a "good reason determined by law", it is unlikely that the court would permit a party to breach or amend the contract. There is no prevention principle in Qatar. Article 257 of the Civil Code, however, allows the court to reduce the amount of liquidated damages payable to an employer where the employer has not suffered a loss, this affords the court some discretion as to the award of liquidated damages. In circumstances where the contractor can prove that the employer has caused a critical delay, the court is likely to order that liquidated damages are not payable to the employer, or should be reduced proportionately with the parties’ responsibility for delay.

  25. 25.

    When might a court or arbitral tribunal award less than the liquidated damages specified in the contract for delay or other matters (eg, substandard work)? What factors are taken into account?

    1. Under article 266 of the Civil Code, the court may award less than the liquidated damages agreed in the contract if the obligor proves that no loss has been suffered, or the claimed amount of liquidated damages is exaggerated. This provision is mandatory and therefore cannot be excluded contractually by the parties. In terms of what is meant by “exaggerated”, Qatar’s Court of Cassation has stated in Case No. 70 of 2006 that "if the debtor proves that the assessment is grossly and vastly exaggerated" then the court may reduce the compensation that was originally agreed upon. Any reduction is likely to be decided on a case-by-case basis. 

  26. 26.

    When might a court or arbitral tribunal award more than the liquidated damages specified in the contract for delay or other matters (eg, work that does not achieve a specified standard)? What factors are taken into account?

    1. It is unlikely that the court would award more than the liquidated damages specified in the contract. Article 266 of the Civil Code allows the court to reduce the amount of liquidated damages in order to be proportionate with the actual loss suffered. However, this power does not extend to increasing the amount from what was agreed. This contrasts with the position in the United Arab Emirates in which the court has the power to both increase and decrease the amount of liquidated damages. 

    Assessing damages and limitations and exclusions of liability

  27. 27.

    How is monetary compensation for breach of contract assessed? For instance, if the contractor is liable for a defect in its works is the employer entitled to its lost profits? What if the lost profits are exceptionally high?

    1. An employer is able to claim damages for defective works under articles 710, 711, 712 and 713 of the Civil Code. However, these provisions are silent as to the employer’s right to claim for loss of profit.

      Article 263(2) of the Civil Code provides that compensation should cover damages incurred by the party, including loss of profit provided that such loss and damage are a natural consequence of the breach. Qatari law distinguishes between damages that are  “direct” and “indirect” or “consequential”. What is considered to be “indirect” or “consequential” may not be the same as under the common law. Direct loss includes loss of profit and “moral damage”. Article 263(3) provides that, absent fraud or gross negligence, a party may only be liable to compensate for damage that was foreseeable at the time of entering into the contract. A loss of profits claim, even if very high, could well be recoverable.

  28. 28.

    If the contractor’s work is technically non-compliant, is the contractor liable for remedying it if the rectification cost is disproportionate to the benefit of the remedy? Can the parties agree on a regime that is stricter for the contractor than under the law of your jurisdiction?

    1. The contract is the law of the parties under article 171 of the Civil Code. The contractor may be required to remedy non-compliant work, even where the breach is technical and rectification costs are disproportionate. Article 694(1) provides that the employer may reject taking over work if a defect has rendered it unfit for its intended purpose. Article 694(2) provides that if the defect has not rendered the work unfit for its purpose, the employer may either reduce the amount payable to the contractor proportionately with the significance of the defect, or may require the contractor to remedy the defect if this is possible. The costs of rectification must be reasonable. However, this may depend on the particular defect and the circumstances as to whether a contractor can avoid its obligations under the contract. The starting point is that the contractor must provide the works in accordance with the contract.

  29. 29.

    If there is a defects notification period (DNP) during which the contractor must or may remedy any defect in its works that appears during a certain period after their completion, if the construction contract is otherwise silent, does it affect the employer’s rights to claim for any defects appearing after the DNP expires?

    1. See question 22. If the contract contains a regime to deal with defects, this is likely to be enforced by the parties. Otherwise, the employer's rights may be in accordance with the Civil Code.

  30. 30.

    What is the effect of a construction contract excluding liability for “indirect or consequential loss”?

    1. Indirect or consequential loss is not recoverable under Qatari law. Article 263(2) of the Civil Code states that recoverable losses are those incurred by the party, including loss of profit, provided that such losses were a natural consequence of the other party's breach.  See further the response to question 27.

  31. 31.

    Are contractually agreed limits on – or exclusions of – liability effective and how readily do claims in tort or delict avoid them? Do they not apply if there is fraud, wilful misconduct, recklessness or gross negligence: (a) if the contract is silent as to such behaviour; or (b) if the contract states that they apply notwithstanding such behaviour? If so, what causation is required between the behaviour and the loss?

    1. Contractually agreed limitations or exclusions of liability are effective in Qatar (albeit not in relation to fraud or gross negligence under article 259(1) of the Civil Code). Article 259(1) is not mandatory, so in theory if the contract provided that the limitation or exclusion of liability applied despite such conduct, it is enforceable. Particularly in circumstances of misconduct or fraud, the court may find that a contractual limitation or exclusion does not apply, however.

    Liens

  32. 32.

    What right does a contractor have to claim a lien (or similar) in the works it has carried out? If so, what are the limits of the right if, for example, the employer has no interest in the site for the permanent works? How is the right recognised and enforced?

    1. Article 1185(1) of the Civil Code provides that, where the contractor’s work increases the value of the property, the amount due to a contractor may be repaid from the proceeds generated by the sale of the property in preference over other unsecured debts. This applies regardless of whether or not the contractor has an interest in the property in question. In order to pursue such a right, the contractor would need to commence proceedings in court, obtain a judgment or award in its favour, request that Qatar's enforcement court attach the property and then await settlement of the amount owed to it from the proceeds generated by the sale of the property. A lien is probably not possible over state assets in Qatar. 

    Subcontractors

  33. 33.

    How do conditional payment (such as pay-when-paid) provisions operate under the law of your jurisdiction (including interpretation rules, any good faith principles and laws on unfair contract terms)?

    1. Conditional payments are enforceable in Qatar if provided for under the contract.

  34. 34.

    May a subcontractor claim against the employer for sums due to the subcontractor from the contractor? How are difficulties with the merits and proof of the subcontractor’s claim addressed, including any rights the contractor has to withhold payment? What if aspects of the project suggest that the law of your jurisdiction should not apply (eg, the parties to both the main contract and the subcontract have chosen a foreign law as the governing law)?

    1. Yes. Under article 702(1) of the Civil Code, a subcontractor may claim sums owed to him directly from the employer to the extent that the amount does not exceed the amount owed by the employer to the contractor at the time. The employer may withhold payments to the contractor to an amount equivalent to the subcontractor's claim until the dispute has been resolved. 

  35. 35.

    May an employer hold its contractor to their arbitration agreement if their dispute concerns a subcontractor (there being no arbitration agreement between the contractor and the subcontractor or no scope for joining two sets of arbitral proceedings) or can the contractor, for example, require litigation between itself, the employer and the subcontractor? Does it matter if the arbitration agreement does not have its seat in your jurisdiction?

    1. Article 8 of the LACCM provides that if litigation is commenced with regards to a dispute in respect of which a valid arbitration agreement exists, the court before which the litigation is commenced shall dismiss the proceedings, provided that the Respondent seeks such an order before the defence is filed or any motions are passed on the merits of the case. Article 2(a) of the LACCM provides that the LACCM applies to any arbitration governed by the law of Qatar, irrespective of the seat of the arbitration. As such, the seat of the arbitration does not change the position under article 8. The LACCM and Civil Code are otherwise silent.

    Third parties

  36. 36.

    May third parties obtain rights under construction contracts? How readily can those connected with the employer (such as future or ultimate owners) bring claims against the contractor in respect of (a) delays and (b) defects? To what extent are exclusions and limitations of liability in the construction contract relevant?

    1. Article 177 of the Civil Code provides that a contract shall not create any obligations binding upon third parties, but may grant rights in such third parties’ favour. Third parties may be given rights under a construction contract. Third parties may also acquire rights at law. Article 176 of the Civil Code provides that where a contract relates to a specific property, and that property is transferred to a third party, the rights and obligations relating to that property are also transferred to the third party.

      Furthermore, the decennial liability regime under article 711 of the Civil Code enables subsequent owners to pursue the contractor for certain defects (on a "strict liability" basis regardless of whether the contractor was at fault) for up to 10 years after completion. Decennial liability cannot be excluded by the contract. See question 38 for more information on decennial liability. It is suggested that exclusions and limitations of liability may not apply to an action under articles 176 or 711 of the Civil Code.

  37. 37.

    How readily (absent fraud, wilful misconduct, recklessness or gross negligence) can those connected with the contractor (such as affiliates, directors or employees) face claims in respect of (a) delays (b) defects and (c) payment? To what extent are exclusions and limitations of liability in the construction contract relevant?

    1. Qatari law recognises the concept of separate legal identity. As such, the affiliates, directors or employees of a company may not be liable for claims made against the company, absent any fraud or other misconduct.

    Limitation and prescription periods

  38. 38.

    What are the key limitation or prescription rules for claims for money and defects (and insofar as you have a mandatory decennial liability (or similar) regime, what is its scope)? What stops time running for the purposes of these rules (assuming the arbitral rules are silent)? Are the rules substantive or procedural law? May parties agree different limitation or prescription rules?

    1. Claims for money will usually expire after a period of 15 years pursuant to article 403 of the Civil Code. This period is likely to commence on the date on which the right to claim crystallises. 

      Once the work has been handed over, article 696(1) of the Civil Code provides that the contractor is no longer liable for any apparent defects or breaches. However, in respect of latent defects, article 696(2) states that if the employer detects a defect or breach after hand over, then the employer may require the contractor to remedy the breach. Set time periods are not prescribed in relation to these events. See question 22 for further details.

      In respect of a claim for defective works (including the collapse of the building) under articles 710 to 713 of the Civil Code, article 714 prescribes a three-year limitation period from the time of collapse of the building, or of detection of the defect.

      Article 711 of the Civil Code provides that the contractor is liable for defects that threaten to compromise the structural integrity of a building or fixed installation, or result in the partial or whole collapse thereof, for a period of 10 years after the employer has taken over the works. The employer has three years from the date of discovering the defects, or from the collapse of the structure, to bring such a claim against the contractor (article 714). Decennial liability is a mandatory provision of Qatari law, meaning that the parties cannot contractually exclude it or agree different rules. It operates on a "strict liability" basis, meaning that the contractor (and the engineer) may be held jointly liable regardless of whether they were at fault (unless it can be proven that the damage or collapse was caused by a force majeure).

      Article 413 of the Civil Code provides that the time running for a prescription period may be stopped upon a claim being filed at court. Further, under article 414, the time period may be suspended if the debtor expressly or impliedly acknowledges the right of the creditor.

      In cases where the prescription period is interrupted, article 415 provides that a new period may begin to run from the time of expiry of the effect arising from the cause of the interruption, and the new period may be the same as the original period.

      It would appear that limitation or prescription periods under the Civil Code may apply regardless of the contract under article 418 of the Civil Code. It is arguable whether this applies to claims made under the contract, if they are subject to their own prescription period by the contract.

    Other key laws

  39. 39.

    What laws apply which cannot be excluded or modified by agreement where the law of your jurisdiction is the governing law of a construction contract? What are the key aspects of, say, the FIDIC Silver Book 1999 that would not operate as its plain words suggest?

    1. As a general rule the contract is the law of the parties under article 171 of the Civil Code. Where laws are mandatory (and cannot be excluded or modified by the parties contractually), this is usually stated in the Civil Code.

  40. 40.

    What laws of your jurisdiction apply anyway where a foreign law governs a construction contract? What are the key aspects of, say, the FIDIC Silver Book 1999 that would not operate as its plain words suggest?

    1. Generally, decennial liability (see questions 22 and 38) is stated to apply to all buildings and fixed installations constructed in Qatar. That said, it is not clear whether this applies where the parties have chosen to have their contract governed by the laws of another jurisdiction.

    Enforcement of binding (but not finally binding) dispute adjudication board (DAB) decisions

  41. 41.

    For a DAB decision awarding a sum to a contractor under, say, sub-clause 20.4 of the FIDIC Red Book 1999 for which the employer has given a timely notice of dissatisfaction, in an arbitration with its seat in your jurisdiction, might the contractor obtain: a partial or interim award requiring payment of the sum awarded by the DAB pending any final award that would be enforceable in your jurisdiction (assuming the arbitral rules are silent); or interim relief from a court in your jurisdiction requiring payment of the sum awarded by the DAB pending any award?

    1. Whether a DAB decision is enforceable, and whether relief may be granted, may be subject to the relevant provisions of the parties' contract. A DAB decision that is intended to provide for interim payment is likely to be enforced by an arbitral tribunal, for which an interim award may be made. It may also be possible to obtain relief in the Qatari courts, particularly if the contract expressly provided for such a right. 

    Courts and arbitral tribunals

  42. 42.

    Does your jurisdiction have courts or judges specialising in construction and arbitration?

    1. There are no courts (or judges) that specialise in construction disputes or arbitration in Qatar. In respect of the QFC, the QICDRC is currently working on introducing a fast-track adjudication scheme to deal with construction disputes called Q-Construct. The scheme would include adjudicators who have experience in construction disputes. The decisions would be binding and enforced by the QICDRC.

  43. 43.

    What are the relevant levels of court for construction and arbitration matters? Are their decisions published? Is there a doctrine of binding precedent?

    1. Disputes arising out of construction contracts may be dealt with by the following levels of court in Qatar: the Court of First Instance, the Court of Appeal and the Court of Cassation. Some of the decisions of the court are published. There is no doctrine of binding precedent in Qatar. Rather, decisions made by higher courts are persuasive, but not binding, on the lower courts.

      Where parties subject their dispute to the jurisdiction of the QFC, the Qatar International Court Dispute Resolution Centre may hear the dispute.

  44. 44.

    In your jurisdiction, if a judge or arbitrator (specialist or otherwise) has views on the issues as they see them that are not put to them by the parties, can they raise them with the parties? Is the court or arbitral tribunal permitted or expected to give preliminary indications as to how it views the merits of the dispute?

    1. Courts and tribunals can only consider the issues that were raised by the parties. Under article 213 of the Qatari Civil and Commercial Procedure Law (Law No. 13 of 1990) (CCPL), a judge is prohibited from basing his decision on mere personal knowledge that was acquired outside of the court. In respect of arbitral tribunals, article 19 of the LACCM states that the parties may agree the arbitral proceedings to be adopted by the tribunal, including the rules of evidence. Pursuant to article 17 of the LACCM, the tribunal can (unless otherwise agreed by the parties) grant interim measures or issue preliminary orders in relation to the nature of the dispute or for the prevention of a reparable harm.

      Otherwise, courts and tribunals are not expected to give preliminary indications as to how they view the merits of the dispute. 

  45. 45.

    If a contractor, say, wishes to arbitrate pursuant to an arbitration agreement, what parallel proceedings might the employer bring in your jurisdiction? Does it make any difference if the dispute has yet to pass through preconditions to arbitration (such as those in clause 20 of the FIDIC Red Book 1999) or if one of the parties shows no regard for the preconditions (such as a DAB or amicable settlement process)?

    1. See question 35 – article 8 of the LACCM provides that if litigation is commenced with regards to a dispute in respect of which a valid arbitration agreement exists, the respondent can seek an order that the proceedings be dismissed.

      Article 70 of the CCPL provides that any assertion that a claim is inadmissible must be raised in the first written submission to the court, and should be raised during the first hearing as a matter of practice. Article 8 of the LACCM provides that any challenge must be before the defence is filed or any motions are passed on the merits of the case. A party who fails to raise the arbitration agreement in accordance with article 8 therefore risks the defence lapsing. The Court of Cassation in Judgment 57/2008 found that a party may waive its right to insist on an arbitration agreement where it does not object to proceedings issued in court. While this decision was made when the previous Arbitration Law (set out in Part 13 of the CCPL) was in force, given the provisions of the LACCM, if a respondent does not raise a challenge in accordance article 8, presumably it will have waived its right to insist on arbitration.

      Having said this, article 9 of the LACCM provides that if issues arise which are outside the authority of the arbitrators, the court may, upon the request of a party, grant interim or precautionary measures, including those set out in article 17 of the LACCM (see question 44), either before or during the arbitral proceedings. 

  46. 46.

    If the seat of the arbitration is in your jurisdiction, might a contractor lose its right to arbitrate if it applied to a foreign court for interim or provisional relief?

    1. Qatari law is silent on this point. However, it is unlikely that a contractor would lose its right to arbitrate in these circumstances. 

    Expert witnesses

  47. 47.

    In your jurisdiction, are tribunal- or party-appointed experts used? To whom do party-appointed experts owe their duties?

    1. Experts are appointed by the court and owe their duties to the court under article 330 of the CCPL. 

      In relation to tribunals, article 24 provides that the parties can submit expert evidence. Article 26 of the LACCM provides that, unless the parties agree otherwise, the tribunal may also appoint one or more experts to report to it on specific issues. The parties are required to give the expert any relevant information or produce any relevant document, goods or property for the expert's inspection. The parties will be given a copy of the expert's report and will have the opportunity to express an opinion on the report and will be if the expert is heard at any hearing, have the opportunity to interrogate the expert. In doing so, a party may hire their own expert to express an opinion on the matters included in the tribunal expert's report unless otherwise agreed.

    State entities

  48. 48.

    Summarise any specific limitations or requirements that apply when the employer is a state entity or public authority (including, for example, public procurement rules, limits on rights to suspend or terminate, excluded lien rights and arbitrating – as well as enforcing an award – against such an employer)?

    1. In cases where the employer is a state entity or a public authority, the Tender Law may apply. Article 10 of the Tender Law requires the approval of the Minister of Finance before a state entity can enter into an arbitration agreement. Attachment of state assets is prohibited under article 57(2) of the Civil Code, therefore a lien over such assets may not be allowed. Qatari law does not expressly prohibit awards from being enforced against a government employer. However, enforcement may not be granted if the award contravenes Qatari public policy. 

      Article 2 of the LACCM provides that an arbitration agreement in relation to disputes with regards to administrative contracts is subject to approval of the Prime Minister.

    Settlement offers

  49. 49.

    If the seat of the arbitration is in your jurisdiction, on what basis can a party make a settlement offer that may not be put before the arbitral tribunal until costs fall to be decided?

    1. The concept of 'without prejudice' privilege is not recognised under Qatari law. If a party makes a settlement offer, this can be put before the arbitral tribunal at any stage during the proceedings. This makes it difficult for the parties to have forthright discussions regarding settlements out of fear that any concessions or offers made might be put before the tribunal at a later stage.  The courts may give lower weight to evidence of settlement negotiations, on the basis that the parties may seek to compromise their own position in order to resolve the dispute. Whether to admit such evidence, and the weight to be given to such evidence, is at the discretion of the court.

      Parties to settlement negotiations may also agree that these negotiations are confidential and 'off the record'. It is advisable for parties to agree to this in writing before any such discussions take place. If evidence is sought to be tendered from confidential negotiations, the court may reject, limit or give lower weight to that evidence on the basis that it is in breach of the parties' agreement. It is suggested that a court is unlikely to reject the admission of confidential evidence altogether, however.

    Privilege

  50. 50.

    Does the law of your jurisdiction recognise "without prejudice" privilege (such that "without privilege" communications are privileged from disclosure)? If not, may it be agreed that a sum is payable if communications to try to achieve a settlement are disclosed to a court or arbitral tribunal?

    1. See question 49. 

  51. 51.

    Is the advice of in-house counsel privileged from disclosure under the law of your jurisdiction? Is the relevant law characterised as substantive or procedural law?

    1. Qatari law is silent on whether the advice of in-house counsel is privileged from disclosure. Lawyers have a duty to keep confidential all of the information and documents received from a client pursuant to articles 51 and 57 of the Advocacy Law (Law 23 of 2006).  

    Guarantees

  52. 52.

    What are the requirements for a guarantee under the law of your jurisdiction? Are oral guarantees effective?

    1. Article 809 of the Civil Code provides that guarantees must be made in writing, even if the original obligation can be otherwise established by evidence. Article 814 provides that a guarantee cannot be for an amount higher than the debt, and the terms of the guarantee cannot be more rigorous than the conditions of the guaranteed debt. The extent of any future obligation to be guaranteed must be defined (article 812(1). Oral guarantees may not be effective. 

  53. 53.

    Under the law of your jurisdiction, will the guarantor’s liability be limited to that of the party to the underlying construction contract, if the guarantee is silent? Can the guarantee’s wording affect the position?

    1. A guarantee may not be enforceable if it is not defined or capable of being defined pursuant to article 812(1) of the Civil Code, which prohibits open-ended guarantees. 

  54. 54.

    Under the law of your jurisdiction, in what circumstances will a guarantor be released from liability under a guarantee, if the guarantee is silent? Can the guarantee’s wording affect the position?

    1. Article 812(2) of the Civil Code provides that the guarantor may at any time withdraw such guarantee as long as the guaranteed obligation has not yet fallen due, provided that the guarantor notifies the creditor of such withdrawal within a reasonable time. 

    On-demand bonds

  55. 55.

    If an on-demand bond is governed by the law of your jurisdiction on what basis might a call be challenged in your courts as a matter of jurisdiction as well as substantive law? Assume the underlying contract is silent on when calls may be made.

    1. Qatari law does not deal specifically with on-demand bonds. Qatari law is unlikely to interfere or prevent banks from honouring a beneficiary's demand for payment of an on-demand bond, regardless of the underlying nature of the contracts between the beneficiary and the contractor (who is normally the debtor of the on-demand bond). However, in cases where the call for the on-demand bond is unlawful or unjustified in the circumstances, a beneficiary would be able to make an ex parte application to the 'urgent court' in Qatar for an injunction to prevent the bank from honouring the call.  

  56. 56.

    If an on-demand bond is governed by the law of your jurisdiction and the underlying contract restrains calls except for amounts which the employer is entitled to (like sub-clause 4.2 of the FIDIC Red Book 1999), when would a court or arbitral tribunal applying your jurisdiction’s law restrain a call if the contractor contended that: (i) the employer does not have an entitlement in principle; or (ii) the employer has an entitlement in principle but not for the amount of the call?

    1. See question 55.

    Further considerations

  57. 57.

    Are there any other material aspects of the law of your jurisdiction concerning construction projects not covered above?

    1. No.

Interested in contributing to this Know-how?

E-mail our Insight Manager


GAR know-how provides reliable cross-jurisdictional insight to help cement the building blocks of international practice. In this section, select experienced practitioners answer commonly asked questions for key jurisdictions so allowing readers to be better-placed to solve the challenges of their working days.

Questions

    Legal system

  1. 1.

    Is your jurisdiction primarily a common law, civil law, customary law or theocratic law jurisdiction? Are the laws substantially derived from the laws of another jurisdiction and, if so, which? What instruments have legal force and effect? Who are the lawmaking bodies? How and where are new laws published? Can laws be passed with retrospective effect?


  2. Contract formation

  3. 2.

    What are the requirements for a construction contract to be formed? When is a "letter of intent" from an employer to a contractor given contractual effect?


  4. Choice of laws, seat, arbitrator and language

  5. 3.

    Are parties free to choose: (a) the governing law of their contract; (b) the law of the arbitration agreement; (c) the seat of the arbitration; (d) any arbitral rules; (e) anyone to act as arbitrator; and (f) the language of the contract and the arbitration? If not, what are the limitations on choice and what happens if the parties act contrary to them?


  6. Implied terms

  7. 4.

    How might terms be implied into construction contracts? What terms might be implied?


  8. Certifiers

  9. 5.

    When must a certifier under a construction contract act impartially, fairly and honestly? To what extent are the parties bound by certificates (where the contract does not expressly empower a court or arbitral tribunal to open up, review and revise certificates)? Can the contractor bring proceedings directly against the certifier?


  10. Competing causes of delay

  11. 6.

    If an employer would cause (eg, by variation) a two-week critical delay to the completion of the works (which by itself would justify an extension of time under the construction contract) but, independently, culpable delay by the contractor (eg, defective work) would cause the same delay, is the contractor entitled to an extension?


  12. Disruption

  13. 7.

    How does the law view "disruption" to the contractor (as distinct from delay or prolongation to the completion of the works) caused by the employer’s breaches of contract and acts of prevention? What must the contractor show for a disruption claim to succeed? If an entitlement in principle can be shown (eg, that a loss has been caused by a breach of contract) must the court or arbitral tribunal do its best to quantify that loss (even if proof of the quantum is lacking or uncertain)?


  14. Acceleration

  15. 8.

    How does the law view "constructive acceleration" (where the contractor incurs costs accelerating its works because an extension of time has not been granted that should have been)? What must the contractor show for such a claim to succeed? Does your answer differ if the employer acted unreasonably or in bad faith?


  16. Force majeure and hardship

  17. 9.

    What events of force majeure give rise to relief? Must they be unforeseeable and to whom? How far does the express or implied allocation of risk under the contract affect whether an event qualifies? Must the event have a permanent effect? Is impossibility in performing required or does a degree of difficulty suffice? Is relief available where only some obligations (eg, to make a single payment or carry out one aspect of the works) are affected or is a greater impact required? What relief is available and does it apply automatically? Can the rules be excluded by agreement?


  18. 10.

    When is a contractor entitled to relief against a construction contract becoming unduly expensive or otherwise hard to perform and what relief is available? Can the rules be excluded by agreement?


  19. Impossibility

  20. 11.

    When is a contractor entitled to relief if after the contract is concluded it transpires (but not due to external events) that it is impossible for the contractor to achieve a particular aspect of the contractual specification? What relief is available?


  21. Clauses that seek to pass risks to the contractor for matters it cannot foresee or control

  22. 12.

    How effective are contractual provisions that seek to pass risks to the contractor for matters it cannot foresee or control, for example making the contractor liable for: (a) a specified event of force majeure; (b) ground conditions that no reasonably diligent contractor could have foreseen; or (c) errors in documents provided by the employer, such as employer's requirements in design and build forms?


  23. Duty to warn

  24. 13.

    When must the contractor warn the employer of an error in a design provided by the employer?


  25. Good faith

  26. 14.

    Is there a general duty of good faith? If so, how does it impact upon the following (where they are otherwise permitted under the construction contract): (a) the level of intervention in the works that is allowed by the employer; (b) a party’s discretion whether to terminate or suspend the contract; or (c) the employer’s discretion to claim pre-agreed sums under the contract, such as liquidated damages for delay?


  27. Time bars

  28. 15.

    How do contractual provisions that bar claims if they are not validly notified within a certain period operate (including limitation or prescription laws that cannot be contracted out of, interpretation rules, any good faith principles and laws on unfair contract terms)? What is the scope for bringing claims outside the written terms of the contract under provisions such as sub-clause 20.1 of the FIDIC Red Book 1999 ("otherwise in connection with the contract")? Is there any difference in approach to claims based on matters that the employer caused and matters it did not, such as weather or ground conditions? Is there any difference in approach to claims for (a) extensions of time and relief from liquidated damages for delay and (b) monetary sums?


  29. Suspension

  30. 16.

    What rights does the employer have to suspend paying the contractor or performing other duties under the contract due to the contractor’s (non-)performance, or the contractor have to suspend carrying out the works (or part of the works) due to the employer’s (non-) performance?


  31. Omissions and termination for convenience

  32. 17.

    May the employer exercise an express power to omit work; or terminate the contract at will or for convenience, so as to give work to another contractor or to carry out the work itself?


  33. Termination

  34. 18.

    What termination rights exist? Can a construction contract be terminated in part? What are the practical and financial consequences?


  35. 19.

    If the construction contract provides for the circumstances in which each party may terminate the contract but does not expressly or impliedly state that those rights are exhaustive, are other rights to terminate available? If so, what are they and what are the practical and financial consequences?


  36. 20.

    What limits apply to exercising termination rights?


  37. Completion

  38. 21.

    Does the law of your jurisdiction deem the works to be completed (irrespective of what the contract says) if, say, the employer takes beneficial possession of the works and starts using them?


  39. 22.

    Does approval or acceptance of work by or on behalf of the employer bar a subsequent complaint? What constitutes acceptance? Does taking over the work by the employer constitute acceptance? Does this bar subsequent complaint?


  40. Liquidated damages and similar pre-agreed sums ('liquidated damages')

  41. 23.

    To what extent are liquidated damages for delay to the completion of the works treated as an exhaustive remedy for all of the employer’s losses due to (a) delay to the completion of the works by the contractual completion date; and (b) delays prior to the contractual completion date (in the absence of, say, interim milestone dates with liquidated damages for delay attaching to them)? What difference does it make if any critical delay is caused by the contractor’s fraud, wilful misconduct, recklessness or gross negligence? If so, what constitutes such behaviour and can it be excluded by agreement?


  42. 24.

    If the employer causes critical delay to the completion of the works and the construction contract does not provide for an extension of time to the contractual completion date (there being no "sweep up" provision such as that in sub-clause 8.4(c) of the FIDIC Silver Book 1999) is the employer still entitled to liquidated damages due to the late completion of works provided for under the contract?


  43. 25.

    When might a court or arbitral tribunal award less than the liquidated damages specified in the contract for delay or other matters (eg, substandard work)? What factors are taken into account?


  44. 26.

    When might a court or arbitral tribunal award more than the liquidated damages specified in the contract for delay or other matters (eg, work that does not achieve a specified standard)? What factors are taken into account?


  45. Assessing damages and limitations and exclusions of liability

  46. 27.

    How is monetary compensation for breach of contract assessed? For instance, if the contractor is liable for a defect in its works is the employer entitled to its lost profits? What if the lost profits are exceptionally high?


  47. 28.

    If the contractor’s work is technically non-compliant, is the contractor liable for remedying it if the rectification cost is disproportionate to the benefit of the remedy? Can the parties agree on a regime that is stricter for the contractor than under the law of your jurisdiction?


  48. 29.

    If there is a defects notification period (DNP) during which the contractor must or may remedy any defect in its works that appears during a certain period after their completion, if the construction contract is otherwise silent, does it affect the employer’s rights to claim for any defects appearing after the DNP expires?


  49. 30.

    What is the effect of a construction contract excluding liability for “indirect or consequential loss”?


  50. 31.

    Are contractually agreed limits on – or exclusions of – liability effective and how readily do claims in tort or delict avoid them? Do they not apply if there is fraud, wilful misconduct, recklessness or gross negligence: (a) if the contract is silent as to such behaviour; or (b) if the contract states that they apply notwithstanding such behaviour? If so, what causation is required between the behaviour and the loss?


  51. Liens

  52. 32.

    What right does a contractor have to claim a lien (or similar) in the works it has carried out? If so, what are the limits of the right if, for example, the employer has no interest in the site for the permanent works? How is the right recognised and enforced?


  53. Subcontractors

  54. 33.

    How do conditional payment (such as pay-when-paid) provisions operate under the law of your jurisdiction (including interpretation rules, any good faith principles and laws on unfair contract terms)?


  55. 34.

    May a subcontractor claim against the employer for sums due to the subcontractor from the contractor? How are difficulties with the merits and proof of the subcontractor’s claim addressed, including any rights the contractor has to withhold payment? What if aspects of the project suggest that the law of your jurisdiction should not apply (eg, the parties to both the main contract and the subcontract have chosen a foreign law as the governing law)?


  56. 35.

    May an employer hold its contractor to their arbitration agreement if their dispute concerns a subcontractor (there being no arbitration agreement between the contractor and the subcontractor or no scope for joining two sets of arbitral proceedings) or can the contractor, for example, require litigation between itself, the employer and the subcontractor? Does it matter if the arbitration agreement does not have its seat in your jurisdiction?


  57. Third parties

  58. 36.

    May third parties obtain rights under construction contracts? How readily can those connected with the employer (such as future or ultimate owners) bring claims against the contractor in respect of (a) delays and (b) defects? To what extent are exclusions and limitations of liability in the construction contract relevant?


  59. 37.

    How readily (absent fraud, wilful misconduct, recklessness or gross negligence) can those connected with the contractor (such as affiliates, directors or employees) face claims in respect of (a) delays (b) defects and (c) payment? To what extent are exclusions and limitations of liability in the construction contract relevant?


  60. Limitation and prescription periods

  61. 38.

    What are the key limitation or prescription rules for claims for money and defects (and insofar as you have a mandatory decennial liability (or similar) regime, what is its scope)? What stops time running for the purposes of these rules (assuming the arbitral rules are silent)? Are the rules substantive or procedural law? May parties agree different limitation or prescription rules?


  62. Other key laws

  63. 39.

    What laws apply which cannot be excluded or modified by agreement where the law of your jurisdiction is the governing law of a construction contract? What are the key aspects of, say, the FIDIC Silver Book 1999 that would not operate as its plain words suggest?


  64. 40.

    What laws of your jurisdiction apply anyway where a foreign law governs a construction contract? What are the key aspects of, say, the FIDIC Silver Book 1999 that would not operate as its plain words suggest?


  65. Enforcement of binding (but not finally binding) dispute adjudication board (DAB) decisions

  66. 41.

    For a DAB decision awarding a sum to a contractor under, say, sub-clause 20.4 of the FIDIC Red Book 1999 for which the employer has given a timely notice of dissatisfaction, in an arbitration with its seat in your jurisdiction, might the contractor obtain: a partial or interim award requiring payment of the sum awarded by the DAB pending any final award that would be enforceable in your jurisdiction (assuming the arbitral rules are silent); or interim relief from a court in your jurisdiction requiring payment of the sum awarded by the DAB pending any award?


  67. Courts and arbitral tribunals

  68. 42.

    Does your jurisdiction have courts or judges specialising in construction and arbitration?


  69. 43.

    What are the relevant levels of court for construction and arbitration matters? Are their decisions published? Is there a doctrine of binding precedent?


  70. 44.

    In your jurisdiction, if a judge or arbitrator (specialist or otherwise) has views on the issues as they see them that are not put to them by the parties, can they raise them with the parties? Is the court or arbitral tribunal permitted or expected to give preliminary indications as to how it views the merits of the dispute?


  71. 45.

    If a contractor, say, wishes to arbitrate pursuant to an arbitration agreement, what parallel proceedings might the employer bring in your jurisdiction? Does it make any difference if the dispute has yet to pass through preconditions to arbitration (such as those in clause 20 of the FIDIC Red Book 1999) or if one of the parties shows no regard for the preconditions (such as a DAB or amicable settlement process)?


  72. 46.

    If the seat of the arbitration is in your jurisdiction, might a contractor lose its right to arbitrate if it applied to a foreign court for interim or provisional relief?


  73. Expert witnesses

  74. 47.

    In your jurisdiction, are tribunal- or party-appointed experts used? To whom do party-appointed experts owe their duties?


  75. State entities

  76. 48.

    Summarise any specific limitations or requirements that apply when the employer is a state entity or public authority (including, for example, public procurement rules, limits on rights to suspend or terminate, excluded lien rights and arbitrating – as well as enforcing an award – against such an employer)?


  77. Settlement offers

  78. 49.

    If the seat of the arbitration is in your jurisdiction, on what basis can a party make a settlement offer that may not be put before the arbitral tribunal until costs fall to be decided?


  79. Privilege

  80. 50.

    Does the law of your jurisdiction recognise "without prejudice" privilege (such that "without privilege" communications are privileged from disclosure)? If not, may it be agreed that a sum is payable if communications to try to achieve a settlement are disclosed to a court or arbitral tribunal?


  81. 51.

    Is the advice of in-house counsel privileged from disclosure under the law of your jurisdiction? Is the relevant law characterised as substantive or procedural law?


  82. Guarantees

  83. 52.

    What are the requirements for a guarantee under the law of your jurisdiction? Are oral guarantees effective?


  84. 53.

    Under the law of your jurisdiction, will the guarantor’s liability be limited to that of the party to the underlying construction contract, if the guarantee is silent? Can the guarantee’s wording affect the position?


  85. 54.

    Under the law of your jurisdiction, in what circumstances will a guarantor be released from liability under a guarantee, if the guarantee is silent? Can the guarantee’s wording affect the position?


  86. On-demand bonds

  87. 55.

    If an on-demand bond is governed by the law of your jurisdiction on what basis might a call be challenged in your courts as a matter of jurisdiction as well as substantive law? Assume the underlying contract is silent on when calls may be made.


  88. 56.

    If an on-demand bond is governed by the law of your jurisdiction and the underlying contract restrains calls except for amounts which the employer is entitled to (like sub-clause 4.2 of the FIDIC Red Book 1999), when would a court or arbitral tribunal applying your jurisdiction’s law restrain a call if the contractor contended that: (i) the employer does not have an entitlement in principle; or (ii) the employer has an entitlement in principle but not for the amount of the call?


  89. Further considerations

  90. 57.

    Are there any other material aspects of the law of your jurisdiction concerning construction projects not covered above?