Construction Law

Limitation of liability clauses and consequential loss: Court revisits the approach in ‘Peerless’

The phrase “consequential loss” is very commonly used in exclusion and limitation of liability clauses. Despite its widespread use and a significant amount of case law on the topic, the legal meaning of the phrase in specific contexts is notoriously difficult to pin down. Moreover, there is a clear difference in the approaches applied by Australian and UK courts to interpreting the phrase. A recent decision of the Supreme Court of Western Australia has gone back to basics and, in doing so, has broken new ground on how to interpret the phrase. …

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Construction Law, Contract Administration, PMP Hints, Procurement Management, Project Management

CMGuide Founder to Speak in AACEI Conference in Dubai

AACEI – UAE Section announces the one day Technical Conference on “Claims Management Practices” to be conducted at Hotel Gloria, Dubai on 09th November 2013. This Conference has been designed with a focus on Understanding claim events through the whole project life cycle right from Inception to the execution phase of the project. Along with understanding the claim events, early mitigation measures right from FEED stage and through various risk study methods become vital. Major claims of the days being on time related issues, a sheer attention is given on the topics related to Schedule preparation and Extension of Time studies during the one day conference.  …

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Construction Industry, Construction Law, Contract Administration, Project Management

FIDIC guidance on enforcing DAB decisions

By Gerrmy Glover

FIDIC, as is well known, are currently finalising a new amended version of the Yellow Book. In a taste of what is to come, on 1 April 2013 the FIDIC Contracts Committee issued a Guidance Note dealing with the powers of, effect of and the enforcement of Dispute Adjudication Board (“DAB”) decisions.

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Construction Industry, Construction Law, Contract Administration, Procurement Management, Project Management

FIDIC’s 26th Annual FIDIC International Contract Users’ Conference

Exclusive saving for all FIDIC users 

As a CMGuide reader, you’re invited to attend FIDIC’s 26th annual FIDIC International Contract Users’ conference at a 10% saving.

Indisputably the leading international forum for those wishing to make the most of the FIDIC suite of contracts, this is your annual opportunity for comprehensive best practice advice on using the range of contracts and understanding the implications of the latest contract amendments – directly from the very people who draft and amend the contracts! …

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Construction Law, Contract Administration

Adjudication in The Middle East

By Nicolos Gould
Adjudication is now a dispute resolution process that most in the UK construction industry are familiar with. The process was introduced by the Housing Grants, Construction and Regeneration Act 1996, which became effective from May 1998. We have therefore lived with it for almost 15 years. Adjudication is included in all of the standard form contracts, but in any event will be implied, as we all now know, into any contract that meets with the definition of “construction contract” under the Act.

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Construction Law, Procurement Management

Bonds provide cover against risk

By David Johnston
BONDS are one method used by employers in construction and engineering projects to mitigate the risk of non-performance by a contractor.

The overriding principle behind the use of bonds is that the entity which issues the bond contractually agrees to take responsibility for the performance of one or more obligations owed by the contractor to the employer, in the event that the contractor fails to perform.

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Construction Law, Contract Administration

Lenders look to limit risks on projects

By David Johnston

Project finance loans are provided against project cash flows, rather than the assets of the project company. Any risk to the project cash flows endangers the lender’s ability to recover the debt capital. The lender, therefore, needs to ensure that the terms of the project documents are satisfactory and will both facilitate and protect the project’s ability to generate the necessary revenue to satisfy the loan repayments, particularly where – as happens all too often – the project runs into difficulties. As part of this, the lender will seek to ensure that the risk allocation between the project company and any third parties is acceptable and, therefore, that the project is considered bankable.

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Construction Law, Construction Technology, Procurement Management, Sustainability

Jordan eyes renewable energy

By Katie Liszka

JORDAN is highly dependent on imported energy in the form of natural gas and fuel oil. In 2011, 97 per cent of its energy was imported. The kingdom has also suffered as a result of problems with the supply of gas from Egypt. In addition to its dependency on imported energy, Jordan also projects a high growth in energy demand. Hence, the country has set itself ambitious targets in relation to the introduction of renewables into its energy mix, which will account for at least 10 per cent of the total supply by 2020. There are also a number of individual targets, such as approximately 1,200 MW (megawatts) for wind power and 600 MW for solar.

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Construction Law, Contract Administration, Procurement Management, Project Management

Lessons for GCC on concurrent delay

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By David Johnston

DELAYS on engineering and construction projects are almost inevitable; the more complex the project, the more likely the prospect of delay, and the more chance of two or more delays occurring at or around the same time.

Where the contractor is culpable for the delay, for example, rectifying its own defective workmanship, it is usually not entitled to an extension of time. However, where an employer-caused delay occurs concurrently with the contractor’s culpable delay – for example, where the employer has instructed a variation, and assuming that each of these events is of approximately equal significance – is the contractor now entitled to an extension of time?

Various legal jurisdictions have struggled with this question and come to different positions. Some of these positions are set out in this article, as are some suggestions as to how this debate should inform approaches taken by employers to concurrent delay on construction projects in the GCC.
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Construction Law, Contract Administration, Project Management

Termination for Construction Contracts

By Heba Osman
A common scenario: the Employer is not happy with the Contractor’s performance, whether because of failure to perform the works in the manner provided for in the Contract or because of some other breach of the Contract. The Employer picks up the Contract, which – in the UAE – is usually some modified FIDIC standard form, in search of the termination provision. Most such termination provisions require the Employer to send the Contractor a notice to correct the failure or the breach within a specified period. If the Contractor fails to correct the breach, then the Employer becomes entitled to terminate the Contract. The Employer, feeling confident of its legal position, sends the termination notice. The Employer is satisfied that it has correctly terminated the contract.
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