Nahen Osten Dr. Nicolai Ritter CMS Hasche Sigle, Berlin Mnchen, 30. Juni 2011 CMS - Unsere Standorte 54 Bros 48 Stdte 29 Lnder > 2800 Anwlte 2 Juristisches Projektmanagement bei Bau- und Infrastrukturvorhaben im Nahen Osten | 30. Juni 2011 bersicht 1. Legal Background/Basis of Contracts 2. Entering into a Contract 3. Collaterals/Securities 4. Penalties/Liquidated Damages 5. Decennial Liability 6. Applicable Law and Jurisdiction 3 Juristisches Projektmanagement bei Bau- und Infrastrukturvorhaben im Nahen Osten | 30. Juni 2011 1. Legal Background/Basis of Contracts 4 Juristisches Projektmanagement bei Bau- und Infrastrukturvorhaben im Nahen Osten | 30. Juni 2011 1. Legal Background/Basis of Contracts Origin of Arab Business Laws Islamic Law Different Schools of Law The Mejelle of the Ottoman Empire Civil Law Civil Code french law-based International Business Law International Contract Examples 5 Juristisches Projektmanagement bei Bau- und Infrastrukturvorhaben im Nahen Osten | 30. Juni 2011 1. Legal Background/Basis of Contracts Making Use of Contract Examples Typical examples: NEC, MF1, JCT, ICC, Orgalime, FIDIC Build only/Build and Design/EPC/EPCM Contracts Checklist: What is the specific subject of the parties' agreement? What is the right example to be used? Which amendments are to be made? 6 Juristisches Projektmanagement bei Bau- und Infrastrukturvorhaben im Nahen Osten | 30. Juni 2011 1. Legal Background/Basis of Contracts - Beispiel FIDIC - 7 Juristisches Projektmanagement bei Bau- und Infrastrukturvorhaben im Nahen Osten | 30. Juni 2011 2. Entering into a Contract 8 Juristisches Projektmanagement bei Bau- und Infrastrukturvorhaben im Nahen Osten | 30. Juni 2011 17.01.2011 - 19.01.2011 2. Entering into a Contract Content of the contract Clarify the specific performance to be provided under the contract in detail! 9 17.01.2011 - 19.01.2011 2. Entering into a Contract Content of the contract Example: Clarifying the Design Responsibility Example 1 - ambiguous - Example 2 - more detailed - Prior to commencement of the works the Employer shall provide the Contractor with the Tender/Contract Drawings ready for construction. Drawings to be provided by Employer: 1. Preliminary Design (Project and planning preparation) Develop the essential elements of a solution to the project task 2. Final Design (Systems and integration planning) Work up the complete solution to the project task 3. Building Permission Application Prepare and submit documents for necessary approvals and consents 4. Execution Drawings Prepare and present design solution in implemental form 10 2. Entering into a Contract Different Cultural and Legal Backgrounds Avoid communication difficulties and misunderstandings Foreign Contractor: Make yourself familiar with local culture and customs! Local Employer: Be aware that the contractor is not always acquainted with local culture! 11 Juristisches Projektmanagement bei Bau- und Infrastrukturvorhaben im Nahen Osten | 30. Juni 2011 2. Entering into a Contract 12 Juristisches Projektmanagement bei Bau- und Infrastrukturvorhaben im Nahen Osten | 30. Juni 2011 Structure of the Project Management 3. Collaterals/Securities 13 Juristisches Projektmanagement bei Bau- und Infrastrukturvorhaben im Nahen Osten | 30. Juni 2011 3. Collaterals/Securities Post-dated checks (PDC) Common, but a risk for employer as well as for Contractor Bank guarantee/performance bond Unconditional: Stand alone, guarantee on first demand Conditional: Requires evidence re. breach (et al.) 14 Juristisches Projektmanagement bei Bau- und Infrastrukturvorhaben im Nahen Osten | 30. Juni 2011 3. Collaterals/Securities (Standby) Letter of Credit 15 Juristisches Projektmanagement bei Bau- und Infrastrukturvorhaben im Nahen Osten | 30. Juni 2011 4. Penalties/Liquidated Damages 16 Juristisches Projektmanagement bei Bau- und Infrastrukturvorhaben im Nahen Osten | 30. Juni 2011 4. Contractual Penalties/Liquidated Damages (LAD's) Excerpt of Qatari Civil Code: 17 Juristisches Projektmanagement bei Bau- und Infrastrukturvorhaben im Nahen Osten | 30. Juni 2011 5. Decennial Liability 18 Juristisches Projektmanagement bei Bau- und Infrastrukturvorhaben im Nahen Osten | 30. Juni 2011 5. Decennial Liability Liability regarding Defects Contractual Agreements and Mandatory Law Typical Clause: "The Client's rights regarding defects shall be in accordance with the statutory provisions, unless otherwise expressly agreed in this contract. The Consultant shall not be liable under this Appointment in respect of any claims made more than thirty-six (36) month after the formal acceptance of his services by the Client." Be aware: Mandatory Law prevails! 19 Juristisches Projektmanagement bei Bau- und Infrastrukturvorhaben im Nahen Osten | 30. Juni 2011 5. Decennial Liability Liability regarding Defects Decennial Liability What is Decennial Liability? Main contractors and design consultants are strictly liable (i.e. without fault) for the cost of rectifying structural defects that appear in a building or structure within ten years of handover (Decennial Liability). In Bahrain: 5 Years Origin: French Code Napolon 20 Juristisches Projektmanagement bei Bau- und Infrastrukturvorhaben im Nahen Osten | 30. Juni 2011 5. Decennial Liability Liability regarding Defects Decennial Liability Excerpt from Bahraini Civil Code: Article 615 (a) The architect and contractor are jointly and severally responsible for the total or partial demolition of constructions or other permanent works erected by them for a period of five years from the date of completing the building or construction subject always to the following articles. (b) However, if it is proved that the intent of the contracting parties that the buildings or constructions shall last for less than five years, the warranty shall be for the period during which they are intended to last. (c) The warranty shall extend to the collapse of buildings even though it arises from a defect in the land or if the employer has authorised the erection of the defective buildings or constructions. It shall also extend to the defects in buildings and constructions which endanger the strength and safety of the works. 21 Juristisches Projektmanagement bei Bau- und Infrastrukturvorhaben im Nahen Osten | 30. Juni 2011 5. Decennial Liability Liability regarding Defects Decennial Liability Excerpt from Bahraini Civil Code: Article 616 (a) If the architects work is limited to producing the design of the building or construction or a part thereof, he shall be responsible for the defects attributed to the design prepared by him but not for the defects due to the execution method. (b) If the employer entrusts him with supervising the execution or a part thereof, he shall also be responsible for the defects attributed to the method of execution the supervision of which is entrusted to him. 22 Juristisches Projektmanagement bei Bau- und Infrastrukturvorhaben im Nahen Osten | 30. Juni 2011 5. Decennial Liability Liability regarding Defects Decennial Liability Excerpt from Bahraini Civil Code: Article 617 (a) The contractor shall only be responsible for the defects in execution but not for the defects in design unless such defects are obvious. (b) However, the contractor shall be liable for the defects due to the design if the architect who prepared the design is an employee thereof. Article 618 If the architect and contractor are responsible for defects in the work, they shall be jointly liable. 23 Juristisches Projektmanagement bei Bau- und Infrastrukturvorhaben im Nahen Osten | 30. Juni 2011 5. Decennial Liability Liability regarding Defects Decennial Liability Key points to note about Decennial Liability: no fault is necessary in order for liability to arise trigger events are normally - total or partial collapse of the building and/or a defect threatening the stability or safety of the structure contractors and consultants are jointly and severally liable liability attaches notwithstanding that the collapse or defect is caused by sub-surface conditions or that the building owner approved the defective work agreements purporting to exclude Decennial Liability are void buildings or structures, the life cycle of which is less than five/ten years, lead to liability for the duration of that life cycle contractors/consultants are unable to pass the risk of Decennial Liability down to its subcontractors/ sub-consultants. 24 Juristisches Projektmanagement bei Bau- und Infrastrukturvorhaben im Nahen Osten | 30. Juni 2011 6. Applicable Law and Jurisdiction 25 Juristisches Projektmanagement bei Bau- und Infrastrukturvorhaben im Nahen Osten | 30. Juni 2011 6. Applicable Law and Jurisdiction Applicable Law Choice of Law: Agreements upon applicable law are in general admissible Examine in each case whether useful Mandatory local law to be observed! Conflict law (Private International Law) to be observed Jurisdiction Choice of jurisdiction is in general admissible too. Local courts normally accept choice of foreign jurisdiction. Examine in each case whether useful 26 Juristisches Projektmanagement bei Bau- und Infrastrukturvorhaben im Nahen Osten | 30. Juni 2011 6. Applicable Law and Jurisdiction Arbitration Alternative Dispute Resolution (ADR): Settlement of disputes apart from State Courts Choice of arbitration is in general admissible Dubai International Arbitration Centre UNCITRAL Model Law and Arbitration Rules International Chamber of Commerce (ICC) New York Convention on recognition and enforcement of foreign arbitral awards 1958 Adjudication Legal process by which adjudicator reviews evidence, arguments and legal reasoning set forth by parties. Useful if contractual relationship is long lasting (i.e. Construction Contracts) Normally unnecessary if purchase contracts are in question 27 Juristisches Projektmanagement bei Bau- und Infrastrukturvorhaben im Nahen Osten | 30. Juni 2011 VIELEN DANK FR IHRE AUFMERKSAMKEIT! Dr. Nicolai Ritter Rechtsanwalt/Lawyer CMS Hasche Sigle Lennstrae 7 10785 Berlin T +49 30 20360-2509 F +49 30 20360-2000 E Nicolai.Ritter@cms-hs.com 28 Juristisches Projektmanagement bei Bau- und Infrastrukturvorhaben im Nahen Osten | 30. Juni 2011 Rckblatt 29 Juristisches Projektmanagement bei Bau- und Infrastrukturvorhaben im Nahen Osten | 30. Juni 2011
Architekten- und Ingenieurrecht nach Ansprüchen: Entscheidungshilfen für Auftraggeber und Auftragnehmer von Planung, Bauüberwachung, Projektleitung und -steuerung