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Rechtliche Herausforderungen bei

Bau- und Infrastrukturprojekten im


Nahen Osten
Dr. Nicolai Ritter
CMS Hasche Sigle, Berlin
Mnchen, 30. Juni 2011
CMS - Unsere Standorte
54 Bros
48 Stdte
29 Lnder
> 2800 Anwlte
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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
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1. Legal Background/Basis of Contracts
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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
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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?
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1. Legal Background/Basis of Contracts
- Beispiel FIDIC -
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2. Entering into a Contract
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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!
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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
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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!
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2. Entering into a Contract
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Structure of the Project Management
3. Collaterals/Securities
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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.)
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3. Collaterals/Securities
(Standby) Letter of Credit
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4. Penalties/Liquidated Damages
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4. Contractual Penalties/Liquidated
Damages (LAD's)
Excerpt of Qatari Civil Code:
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5. Decennial Liability
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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!
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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
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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.
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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.
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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.
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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.
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6. Applicable Law and Jurisdiction
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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
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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
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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
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Rckblatt
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