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Qatar – contractors and termination rights Where a project is awarded on a lump sum basis, the 1984 General Conditions

of Contract favoured by employers in Qatar places much of the risk for increased project costs or delays on the contractor, except where such increased costs or delays are attributable to the employer. A reasonably fair assessment of the General Conditions of Contract by many contractors in Qatar is that it heavily favours the employer. While this may be the case, in certain limited circumstances, a contractor may also be entitled to claim equitable relief in accordance with the Qatar Civil Law No. 22 of 2004. Examples of equitable principles codified in the Qatar Civil Law include the requirement for parties to a contract to conduct themselves "consistent with the dictates of good faith" and an implied duty of the employer to cooperate with its contractors and not to delay or prevent their contract performance. The latter concept is codified in the Qatar Civil Law in Article 199, which states that "every mistake that causes damage to others shall render the person who committed it responsible for compensation". Furthermore, where a contractor has suffered excessive losses arising from exceptional events that could not have been foreseen, the contractor may be able to raise an exceptional event's argument pursuant to Article 171 of the Qatar Civil Law, and if successful, the judge may reduce a contractor's burdensome obligation to a reasonable limit after balancing the interests of the parties. The General Conditions of Contract are silent with respect to a contractor's right to recover for increases in labour and material costs, and seeking any relief pursuant to the Civil Law is now made somewhat harder by its Article 700, which provides in part that "the increase in the prices of raw materials, labour and other costs shall have no effect on the extent of the obligations imposed by the contract". This provision is without prejudice to the exceptional event's argument referred to above. Particularly in view of the express wording of Article 700, whether a contractor is successful in relation to an exceptional event's argument may depend upon when the contract was entered into. If at the time of execution of the contract the Qatar market was already very active and experiencing material price pressures, it may well be difficult for a contractor to argue that the material price increases were unforeseeable.

What happens then when a contractor can demonstrate that the employer or the employer's representative interferes with the progress of the works, causing increased costs and delay? The General Conditions of Contract provide the contractor with a mechanism to recover increased costs under these circumstances. The contractor may also be able to recover reasonable reimbursement of the costs incurred by it on the basis of the Qatar Civil Law, the implied duty of the employer to cooperate with its contractors and not to delay or prevent their contract performance, and the obligation of the employer to compensate the contractor for the employer's own mistakes.

81/2001 determined that the contractor was not negligent in its delayed performance where payment was delayed. where the contract does not address a particular issue that arises during performance or gives little direct relief. the contractor may rely upon the Qatar Civil Law. but if the certification process is proven by the contractor to have been unreasonable. the contract is the first place one must look in determining the parties' respective rights. On occasion.Often. it is interesting to note the Qatar Court of Appeal. a contractor's delayed performance may be attributable to cash flow difficulties arising from an employer's failure to pay the contractor's due entitlements during the works. the General Conditions of Contract do not specify a time period for the engineer's certification. which allows contractors to argue that the courts should apply a "reasonableness" standard with respect to the process by which the engineer reviews payment applications and the engineer's time period for review. While the General Conditions of Contract do not allow a contractor to terminate or suspend performance of the works in such a situation. Moreover. in Appeal No. Subject to applicable principles of Qatar law. the Civil Law extends interpretation of dictates of good faith to common "usage". Unless this is further clarified in the tender or special conditions of contract. contractors and employers alike should be mindful of the rights and obligations imposed by the Qatar Civil Law and the relief that may be sought and granted as a matter of law. but rather the employer was responsible for the disruption and delay in the works. While the General Conditions of Contract require payment upon each of the engineer's interim certificates to be made within the time stated in the tender. Contractors will need to look to projects of a similar nature in Qatar and the region as well as other time periods specified in the contract to support their argument for reasonableness. . compensation for the contractor's costs and expenses arising from unreasonable delay could be awarded. contractors face difficulties as a result of the lack of timeliness in payments made by the employer under contract. which requires the parties to act in a manner consistent with the dictates of good faith.