Primer on uae civil code


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How does UAE Civil code relates to your Construction Industry? Is it based on Sharia? How does it compare with Common law principles? Find out answers here. A lucid presentation for quantity surveyors and construction engineers

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  • Good evening friends, Thank for introduction. For opportunity to speak on this elite forumUS historian Will Durant once told, “Education is a progressive discovery of our own ignorance”. Introduce background of research RGU, CPD events interaction with lawyers etc.
  • Construction law is always Civil law (unless you have decided to collect your outstanding payments at a knife point!)
  • Branch of law that deals with construction related disputes.Contract, tort included
  • Results of a survey undertaken recentlyParticipants were asked to rank their dispute resolution mechanism in the order of their preferenceAmicable settlement was the first choice and litigation was the last choiceNegotiation was part of amicable settlement. We all trained in negotiation and mediation if you have children esp. teenagers.
  • Law of a Country can’t be overruled by Standard Conditions of Contract
  • No forum non convenience!Mandatory provision like pre estimated LD’s
  • The list may look long but be assured that we will finish on time
  • These are the various laws we come across often. Except in-laws all other laws are here!
  • This looks more organized
  • All roads to Rome!
  • Two main branches of Civil lawFrench and German
  • Unwritten Constitution.Common for all
  • England and America are two countries divided by a common language. This quote is attributed to George Bernard Shaw and Oscar WildeUS gallon and imperial gallon and even on weight measure they have different cwt.!
  • Civil law Hadley v Boxendale, or Serck controls v Drake and Scull EngineeringCriminal law R(egina) means Queen
  • Important topic, Get this funda clear once for all!
  • We operate in an environment where both common law professionals and civil law experts co-exist
  • This is tricky as we read a lot about them but not applicable under local law
  • Major areas of contrast
  • Detailed legislation. Like ‘Unless agreed by the parties’ etcFrench tort law is based on case law
  • Let the decision stand!Court of Cassation case law is only for understanding of law
  • Freedom of contract versus fairness of dealingsParol means oralIn UAE intention of parties is very importantTribunals have the authority to rewrite your agreements, Beware
  • Common law, Barrister runs the showCivil law, Judge takes the control of proceedings
  • Party names, Which court the judgment was delivered, Significant cases cited, also legislation
  • No party names, despite being a public proceedingNo case reference, only legislation
  • Just the last branch of law!
  • No uniformity, French civil code influenceEgyptian law is the pioneer to current civil codes
  • Turkey the capital of Ottoman empireAll the yellow parts are part of Ottoman
  • Majella is based on Islamic lawAl Sanhouri managed to integrate Majella and French Civil Code
  • Broad classification. China has mixture of laws. Civil law is dominant
  • Commercial break!!Unintentional leaning tower is PISA
  • Intentional leaning towers. Wanaka tower is extremely leaning.We do have a leaning tower, Capital gate hotel in Abu Dhabi. Currently holding Guinness book record
  • The Contractor must have a concern on NCR. How to rectify this defect??May be few pennies saved by not doing soil investigation?Who is at fault? Contractor or Structural designer?
  • You can argue that if contractors of PISA tower is not sued, why are you bothering a minor out of plumb!!
  • After travelling around the world let us get back to UAE!
  • We are Young jurisdictionDIFC follows common law, Often called Common law oasis amidst of Civil law desert!
  • The most referred civil law in UAE
  • Practically covers every aspect of ContractYou can’t restrict any party’s right to apply to Court
  • Million dollar question and conflicting views
  • Common complaint by Common law professionalsThis article appeared in a local magazine
  • Convinced the Queen of Spain for his voyageDemanded one tenth of the wealth that he brings from new countries
  • He sailed westward thinking that he can easily reach India, since the earth is a globe.Not aware of America and not aware of Pacific ocean at allIndia the land of gold, land of pearls and land of black peppersLater Portuguese found route to India. Vasco da gama
  • 6 years after Columbus discovery of America, Vasco da Gama found route to India.
  • He thought he has travelled upto Japan and China
  • On third trip landed in South AmericaOnly on fourth main land of USA
  • Practically covers every aspect of ContractYou can’t restrict any party’s right to apply to Court
  • Next time someone says to you, Civil code is insufficient, you call him Columbus!
  • Another Civil law lawyer has responded in his article contesting the observations
  • I took some time to compare few civil codes on couple of aspects.French is oldest civil law
  • What does our own UAE law says on intentions of the partiesIt is very much comparable
  • Another important aspect of contractsInterpretationThe Civil codes of various countries is comparable
  • This idea is similar to English Common law also
  • In one of my project where I was the RE, the PD used to argue that under Sharia law I was wrong!
  • I had a PD who always argue in every progress review meeting that what we, the Engineer is doing is against Sharia law.I owe my LLM to aggressive Contractors and demanding clients and indifferent consultants!Sharia law is A main source and not THE main source
  • Civil code is clear on the application of Sharia
  • If there is a UAE law than it is presumed to be Sharia complaintNo challenge is possible
  • Civil code takes priority
  • Four legged stool. That is the Sharia in ConstructionDetailed explanation for another time
  • Now the end of the tunnel is at sight!! What a relief?
  • Short and sweet!Crisp definitionsJust two articles to cover subcontracts
  • Lawyer viewColorful to make it interestingQS view
  • Contractor obligations
  • This is important
  • Condition precedent 887Not a piece of cake.To be looked from good faith also
  • My favourite topicMy dissertation was just on these TWO articles
  • Both Common law and UAE law is similar in leaving the Subcontractor high and dry.Tell about Irish subcontracting. Subcontractor joining politics to bring out legislation
  • Almost done! Patience!!
  • Thank the participantsPlease give your feed back at this link (will take less than 5 minutes)Detailed analysis will be later in Part 2
  • Primer on uae civil code

    1. 1. Indian Institute of Quantity Surveyors Review of UAE Law in context of Construction law provisions 28th September 2013 Presented by: R. Venkat, FCIArb, FCMA LLM (Const Law), B.Eng, C.Eng © Venkat
    2. 2. Review of UAE Law in context of Construction law provisions Civil Question: What is Construction law? © Venkat
    3. 3. 3 Construction Engineer Lawyer Construction lawyer Construction law © Venkat
    4. 4. NO ONE LIKES TO LITIGATE 4© Venkat
    5. 5. UAE CIVIL CODE; WHY IT IS RELEVANT TO US? 5 FIDIC 99 Clause 1.4 Law and Language The Contract shall be governed by the law of the country (or other jurisdiction) stated in the Appendix to the Tender Contracts in UAE are mostly administered by FIDIC 87 and FIDIC 99 with amendments. What do they say on local law? FIDIC 87 Clause 5.1 Language/s and Law (b) the country or state the law of which shall apply to the Contract and according to which the Contract shall be construed. Law of the Country is like a safety net. © Venkat
    6. 6. UAE CIVIL CODE; WHY IT IS RELEVANT TO US? 6 Civil code on the applicability of the local law The law of UAE will prevail if there is a conflict of laws (Art 10) Ignorance of the provisions of the law is no excuse (Art 29). A mandatory provision [of law] shall take precedence over a duty created by a contractual stipulation (Art 31) Residency or where the Contract was concluded will decide the applicable law (Art 19(1)) The lex situs of the place in which real property is situated shall apply to contracts made over such property (Art 19(2). © Venkat
    7. 7. PROPOSED WALK-THROUGH • Categories of Law • Common law Versus Civil law • Middle eastern law • What is UAE Civil Code? • Does it address all Construction related issues? • Is it only based on Sharia Law? • Law of Contract; Important provisions © Venkat
    8. 8. CATEGORIES OF LAW 8 Common law Civil law Case law Public law Private law Criminal law Contract law Tort law Construction law © Venkat
    9. 9. CATEGORIES OF LAW Legal systems Civil law Common law Source of law Case law Statute Regulation Civil law Criminal law Applicability Private law Public law 9© Venkat
    10. 10. • Legal tradition which has its origin in Roman law • Codified in the Corpus Juris Civilis of Justinian (Eastern Roman emperor; 529 AD) • Civil law is fully codified, highly systemized and structured • Broad general principles without setting out the details Civil Law legal system 10© Venkat
    11. 11. Roman law Code Napoleon French Influence Circa 1800 Germanic family (Enacted in 1900) Belgium, Luxembo urg, Spain, Louisia na and Quebec Austria, Switzerland, Turkey, Japan, Korea and Taiwan Civil Law legal system 11© Venkat
    12. 12. • Refers to legal systems that adopted English legal system • Evolved in England from the 11th Century onwards • Established by William the Conqueror • Principles appear in the reported judgments (most part!) • Scope for a discretionary approach • Rules seem to be more specific and detailed Common Law legal system 12© Venkat
    13. 13. COMMON LAW SYSTEM COUNTRIES 13 Basis of private law for • England, Wales, Ireland, • All states of USA (except Louisiana) • Canada (except Quebec) and • Former colonies of British Empire (India, Pakistan, Malaysia etc.,) USA is the main receiver and considerable changer of English Common law © Venkat
    14. 14. Criminal law is aspect of public law Relates to conduct which the State considers inappropriate Involves enforcement including sentence to prison Public Prosecutor prosecutes the defendant (accused) Civil Law and Criminal law Every legal system will have both Civil law and Criminal law Not to be confused with Civil law legal system Civil law is to settle dispute between two individuals. Claimant Sues the defendant. It‟s a private law Examples: dispute in a sale of land, debt recovery, contract 14© Venkat
    15. 15. PROPOSED WALK-THROUGH • Categories of Law • Common law Versus Civil law • Middle eastern law • What is UAE Civil Code? • Does it address all Construction related issues? • Is it only based on Sharia Law? • Law of Contract; Important provisions © Venkat
    16. 16. WHY WE SHOULD KNOW THE DIFFERENCE 16 “..because of the presence of international law firms (in UAE) with “common law” roots, many contracts which have been drafted in the UAE appear to have been influenced by common law principles. This has created difficulties in the application of the law to these contracts by the courts of the UAE since judicial authority does not recognize some of the principles or the practices of the common law system…” Leading UAE Lawyer Mr. Essam Al Tamimi © Venkat
    17. 17. 17 • Time at large • Prevention principle • Fitness for purpose • Pre estimated LD‟s Established Common law principles are not recognized in UAE © Venkat
    18. 18. 18 Common Law Versus Civil Law 1. Source of law 2. Principle of precedents 3. Interpretation of Contracts 4. Judicial procedure © Venkat
    19. 19. COMMON LAW CIVIL LAW 19 1. Source of law • Mainly from case law from previous judgments. Statutes are also referred. • Statutes are detailed with definitions and contain lengthy enumerations of specific applications and exceptions • Mostly based Codified legislation. Case law is mostly irrelevant (notable exception French Tort law which is fully based on case law) • Codes are concise, state broad principles only © Venkat
    20. 20. COMMON LAW CIVIL LAW 20 2. Principle of precedents • Judges are subject to doctrine of stare decisis • Decisions from Upper Courts must be respected and followed • Hierarchical structure • Judges are bound by Code and facts and not on precedents! • Court of Cassation judgments are referred for understanding of law © Venkat
    21. 21. COMMON LAW CIVIL LAW 21 3. Interpretation of Contracts • Respects freedom of Contract • Primary focus on the written words in the contract. • Parol evidence “prevents a party to a written contract from presenting extrinsic evidence that contradicts or adds to the written terms of the contract that appears to be whole”. • Interest of fairness (as against freedom of contract) • Primary focus on the wider context and intentions of the parties • Not limited to literal meaning of the terms. Evidence of negotiation is admissible • Mandatory provisions can‟t be excluded • Tribunals have power to rewrite the parties‟ agreement© Venkat
    22. 22. COMMON LAW CIVIL LAW 22 4. Judicial procedure • Parties collect evidence and present • More reliance on evidence of fact, oral arguments • Parties appoint experts • Judges are appointed from senior lawyers in practice • Judge plays main role in collecting evidence • Trials are based on written evidence • Court appoints the experts • Judges are separately trained and appointed © Venkat
    23. 23. 23 Resolution Chemicals Ltd v H Lundbeck A/S Court of Appeal (Civil Division) 29 July 2013 Where Reported [2013] EWCA Civ 924; Official Transcript Summary: The Court of Appeal re-stated the test to be applied when assessing whether there was privity of interest between a new party and a party to previous proceedings, so as to prevent the new party litigating the same matter. Abstract: The appellant patent proprietor (L) appealed against a decision ([2013] EWHC 739 (Pat)) that the respondent company (R) was not precluded from bringing proceedings to challenge the validity of L's patent. Appeal dismissed. (1) A judgment that a patent was valid determined issues only between the parties to the revocation action. Judge: Longmore, L.J.; Moore-Bick, L.J.; Floyd, L.J. Significant Cases Cited Special Effects Ltd v L'Oreal SA [2007] EWCA Civ 1; [2007] Bus. L.R. 759; Legislation Cited Patents Act 1977 (c.37) s.65; Patents Act 1977 (c.37) s.72 S A M P L E U K C O U R T J U D G M E N T© Venkat
    24. 24. SAMPLE UAE COURT JUDGMENT(IN TRANSLATION) 24 Dubai Court of Cassation 240/2006 : 23 January 2007 Subject: Muqawala; Contract; Proof; Judges Keywords: 1.Muqawala; obligation - description of obligation - condition and term - condition; 2.Contract - interpretation of contract; trial court - jurisdiction over questions of fact - contract - interpretation of contract; 3.Proof - burden of proof; contract - effects of contract; obligation - description of obligation - condition and term - condition; 4.Contract - making of contract; trial court - jurisdiction over questions of fact - contract - interpretation of contract; 5.Judges - competence; Legislation referred to: 3. Civil Code – articles 243, 420, 423 and 425 4. Civil Code - articles 130, 131 and 132 5. Law of Civil Procedures - article 114 1. The appellant company made an offer in a letter to the respondent company, and that offer was met with an implied acceptance by the latter company by its carrying out the works as set out in the letter. Thus, there was a contract made between the parties, containing the condition in the contract made between the appellant company and the head contractor, © Venkat
    25. 25. PROPOSED WALK-THROUGH • Categories of Law • Common law Versus Civil law • Middle eastern law • What is UAE Civil Code? • Does it address all Construction related issues? • Is it only based on Sharia Law? • Law of Contract; Important provisions © Venkat
    26. 26. MIDDLE-EASTERN LAW 26 • Arab countries have followed the Egyptian Civil Code. • To understand Middle east law, we need to know bit of history • Ottoman empire! • Neither common law nor purely based on civil code • No single uniform Middle East or Arab law • Arab law is mixture of Islamic law and French civil code • Egyptian Civil Code is the first Arab law enacted © Venkat
    27. 27. OTTOMAN EMPIRE 27 Created by Turkish tribes in Anatolia. One of the most powerful states in the world during the 15th and 16th centuries. Spanned more than 600 years and came to an end in 1922. Empire included modern Hungary, Serbia, Bosnia, Romania, Greece, and Ukraine; Iraq, Syria, Israel, and Egypt, North Africa as far west as Algeria; and most of the Arabian Peninsula.© Venkat
    28. 28. The Ottoman government compiled a uniform Civil Code called "Majella“ After the fall of Ottoman Empire, France and Britain took over different Arab countries. Influence of French Civil Code grew in the Arab countries. Attempt to reconcile between the Sharia and the Western laws has began. The Egyptian Civil Code of 1948 was the first successful product. Legal scholar and professor Abd al-Razzāq al-Sanhūrī (1895-1971) is the author of Egyptian Civil code. His twelve-volume commentary on Civil code is a magnum opus (Al-Wasīṭ fī sharḥ al-qānūn al-madanī al-jadīd) LEGAL SYSTEM IN MIDDLE-EAST 28© Venkat
    29. 29. LEGAL SYSTEMS AROUND THE WORLD 29 Common law Civil law Middle eastern law © Venkat
    30. 30. 30 Leaning (falling?) Tower of Pisa Tourist View © Venkat
    31. 31. 31 Leaning Tower of Wanaka Leaning Tower of Abu Dhabi True leaning towers of the world © Venkat
    32. 32. 32 Leaning (falling?) Tower of Pisa Tourist View © Venkat
    33. 33. 33 Leaning Tower of Pisa Contractor‟ s view © Venkat
    34. 34. LAWYER’S VIEW 34 Leaning Tower of Pisa © Venkat
    35. 35. PROPOSED WALK-THROUGH • Categories of Law • Common law Versus Civil law • Middle eastern law • What is UAE Civil Code? • Does it address all Construction related issues? • Is it only based on Sharia Law? • Law of Contract; Important provisions © Venkat
    36. 36. LAW SYSTEMS- TIME LINE 36 Roman civil law 6th Century English common law 11th Century Code Napoleon 1800 AD Germanic laws 1900 AD Egyptian civil law 1948 AD Formation of UAE 1971 Civil Code (Federal law 5) 1985 Civil Procedure Code, Federal Law No.(11) 1992 Commercial Transactions Act 1993 DIFC Law 2004 © Venkat
    37. 37. GLANCE AT UAE CIVIL CODE 37 • The Law of Civil Transactions of the State of UAE • Decreed under Federal law 5 of 1985 • Commonly known as Civil Code • Covers all Civil transactions like Contract for work, Sale etc., • The other complimentary law is the Commercial Transactions Act declared under Federal Law No. 18 of 1993 • Civil Code remains the baseplate both of commercial and of civil law in the UAE. • Civil Code that is the most referred law in Court of Cassation judgments. © Venkat
    38. 38. WHAT DOES CIVIL CODE COVER? 38 • Formation of Contract • What constitutes offer and acceptance • The capacity of the parties • Effect of fraud and mistake • Interpretation of agreements • The liberty to withdraw • Remedies for breach and • Numerous general questions of contract law Important Any Clause that purport to exclude a party‟s right to apply to Court for excessive hardship is invalid under UAE Law. © Venkat
    39. 39. PROPOSED WALK-THROUGH • Categories of Law • Common law Versus Civil law • Middle eastern law • What is UAE Civil Code? • Does it address all Construction related issues? • Is it only based on Sharia Law? • Law of Contract; Important provisions © Venkat
    40. 40. DOES CIVIL CODE SUFFICIENT? 40 General complaint Civil code contains just 25 articles on Construction Contract. The Billions of dirhams being spent on buildings are worthy of greater attention than just 25 short articles in the Civil Code. Comment by a lawyer trained on Common law Is it true? Let us use an analogy. Columbus and Civil code!! © Venkat
    41. 41. COLUMBUS AND CIVIL CODE 41 Christopher Columbus Adventurous sailor, tough negotiator and shrewd businessman © Venkat
    42. 42. 42 Wanted to reach India by sailing westward from Spain Landed in Bahamas instead © Venkat
    43. 43. 43 Vasco da Gama‟s maiden voyage to India (1498) © Venkat
    44. 44. FIRST VOYAGE OF COLUMBUS (1492) 44 Landed in Bahamas which he thought was Japan. Then went to Cuba which he declared as China © Venkat
    45. 45. DISCOVERY OF AMERICA 45He never saw the main land of America, until his Third Voyage! (1498) © Venkat
    46. 46. UAE CIVIL CODE COVERS THE FOLLOWING 46 • Formation of Contract • What constitutes offer and acceptance • The capacity of the parties • Effect of fraud and mistake • Interpretation of agreements • The liberty to withdraw • Remedies for breach and • Numerous general questions of contract law 1528 Articles 4 Volumes Contract of work, Contract of Sale, Lease, Mortgage etc., © Venkat
    47. 47. COLUMBUS AND CIVIL CODE 47 Conclusion Declaring Civil code contains only 25 articles on Contracts and The Code does not address the complexities of Construction Contracts is akin to Columbus discovery of America until the third voyage © Venkat
    48. 48. WHAT DOES CIVIL LAW EXPERTS SAY? 48 • It doesn‟t mean that bulky construction law is required to justify the construction boom. • The UAE Civil Code contains more or less as many provisions as it should without becoming over-intrusive in the way private parties wish to distribute their tasks. • Civil Codes of most countries are generally minimalistic • Expanding civil codes into greater detail on the intricacies of specific aspects would be deemed as interventionist in most civil law-based jurisdictions. © Venkat
    49. 49. CONTRACT INTERPRETATION COMPARISON OF CIVIL CODES 49 French civil code Quebec (Canada) Louisiana Civil Code (USA) Art. 1156 One must in agreements seek what the common intention of the contracting parties was, rather than pay attention to the literal meaning of the terms. 1425. The common intention of the parties rather than adherence to the literal meaning of the words shall be sought in interpreting a contract. Art. 2045 Interpretation of a contract is the determination of the common intent of the parties. © Venkat
    50. 50. CONTRACT INTERPRETATION UAE CIVIL CODE 50 Corresponding articles from the civil codes of other countries: • Jordan 239 and 240; • Egypt 150 and 151; • Syria 151 and 152 Article 265 (1) If the wording of a contract is clear, it may not be departed from by way of interpretation to ascertain the intention of the parties. (2) If there is scope for interpretation of the contract, an enquiry shall be made into the mutual intentions of the parties without stopping at the literal meaning of the words .. © Venkat
    51. 51. CONTRACT INTERPRETATION COMPARISON OF CIVIL CODES 51 French civil code Quebec (Canada) Louisiana Civil Code (USA) Art. 1162 In case of doubt, an agreement shall be interpreted against the one who has stipulated, and in favour of the one who has contracted the obligation 1432. In case of doubt, a contract is interpreted in favour of the person who contracted the obligation and against the person who stipulated it. Art. 2057 Contract interpreted in favor of obligor In case of doubt that cannot be otherwise resolved, a contract must be interpreted against the obligee and in favor of the obligor of a particular obligation. © Venkat
    52. 52. CONTRACT INTERPRETATION WHAT DOES UAE CIVIL CODE SAY? 52 This rule is adopted from Western jurisdictions. Common law doctrine Contra Proferentem Latin term which means “against the offeror.” If a clause in a contract appears to be ambiguous, it should be interpreted against the interests of the person who insisted that the clause be included. Article 266 (1) A doubt shall be interpreted in favour of the obligor. © Venkat
    53. 53. PROPOSED WALK-THROUGH • Categories of Law • Common law Versus Civil law • Middle eastern law • What is UAE Civil Code? • Does it address all Construction related issues? • Is it only based on Sharia Law? • Law of Contract; Important provisions © Venkat
    54. 54. SHARIA LAW AND UAE CIVIL CODE 54 Is Sharia is the only source of UAE law? Two different interpretations The starting point is the UAE Constitution, Article 7 of the Constitution says: 'Islam is the official religion of the Federation and the Islamic Sharia is a main source of its legislation'. One view is that since Federal laws shall be promulgated in accordance with the Constitution (Article 110), any law which is does not take Sharia as a source will be void because it violates the constitution. However this is a narrow interpretation. Note the construction of this Article: Sharia is a main source not the only source © Venkat
    55. 55. Article 1 of UAE Civil Code states that The legislative provisions shall apply to all matters dealt with by those provisions in the letter and in the spirit. There shall be no scope for innovative reasoning in the case of provisions of definitive import. If the judge finds no provision in this Law, he must pass judgment according to the Islamic sharia. So the Civil code states that Sharia law will be applicable only when the Civil code has no provision. SHARIA LAW AND UAE CIVIL CODE 55© Venkat
    56. 56. What is the Court‟s view on the applicability of Sharia law? Case involving Margin trading ( Abu Dhabi supreme court Case No. 164/2006) Lower courts declared Margin trading is forbidden under Sharia. Federal Supreme Court held that commercial transactions are permissible unless they are shown to be expressly repugnant to Sharia. Margin Trading Agreements are referred to in the UAE Banking Law and hence it is presumed to be in accordance with Sharia. Accordingly, the Court held that Margin Trading Agreements were valid and enforceable under UAE law. SHARIA LAW AND UAE CIVIL CODE 56© Venkat
    57. 57. In summary Islamic Sharia is a source of UAE law, but it is not the only source. Where UAE law contains a specific provision, UAE courts will give effect to that provision. A UAE court will pass judgment according to Sharia in the absence of a provision of UAE law covering the issue to be determined. Sharia law and UAE civil code © Venkat
    58. 58. 58 Sharia in Construction law Riba Gharar Due Process Good faith Unjust enrichment Uncertainty © Venkat
    59. 59. PROPOSED WALK-THROUGH • Categories of Law • Common law Versus Civil law • Middle eastern law • What is UAE Civil Code? • Does it address all Construction related issues? • Is it only based on Sharia Law? • Law of Contract; Important provisions © Venkat
    60. 60. MUQAWALA CONTRACTS 60 Means “a Contract to make a thing or perform a task” In simple words, Works contract or Construction Contract • Definition and Scope Article 871 to 874 • Obligations of the Contractor Article 875 to 883 • Obligations of the Employer Article 884 to 889 • Subcontractor Article 890 and 891 • Termination of Contract Article 892 to 896 25 Articles covering all aspects of Construction contracts Compare Articles 646 to 676 of Egyptian Civil Code © Venkat
    61. 61. MUQAWALA CONTRACTS 61 Article 874 A Muqawala Contract must provide description of subject matter of the contract, the manner of performance, period over which the contract has to be performed and Consideration manner of performance Method statements description of subject matter Complete drawings and specification consideration Contract Sum period over which the contract.. Construction period © Venkat
    62. 62. MUQAWALA CONTRACTS 62 Contractor obligations (briefly) • (for) Quality of materials Article 875 • (to provide) tools Article 876 • For any loss/damage arising from his work* Article 878 • Permitted to retain the work until payment Article 879 * Except when the loss arising from his work can‟t be prevented © Venkat
    63. 63. MUQAWALA CONTRACTS 63 Mandatory Contractor obligations Article 880(1) • Joint liability with Architect against partial/total collapse of the structure for TEN years. Article 886 • Obligation to notify if the quantities required to complete the work is substantially more than what is included in the Contract in a Unit priced measurable contract © Venkat
    64. 64. MUQAWALA CONTRACTS EMPLOYER OBLIGATIONS (BRIEFLY) 64 • To take delivery upon completion Article 884 • To pay agreed consideration Article 885 • If any termination is sought, it should be done without delay and Contractors must be paid for the work done Article 886(2) In a lump-sum contract, Contractor is entitled for additional payment only if the variation work is undertaken with the consent of Employer Article 887 © Venkat
    65. 65. MUQAWALA CONTRACTS EMPLOYER OBLIGATIONS (CONTD) 65 Contractor is entitled fair remuneration for the work done by him even though there is no consideration specified in the Contract Article 888 Quantum merit in Common law Serck Controls Ltd v Drake & Scull Engineering Ltd [2000] (TCC) © Venkat
    66. 66. SUBCONTRACTING 66© Venkat
    67. 67. SUBCONTRACTING 67 Article 890 Subcontracting is permitted unless • It is prevented by a condition in the contract Or • The nature of work requires that it should be performed by the Contractor The Main Contractor is still liable to the Employer (Article 890 (2)) © Venkat
    68. 68. SUBCONTRACTING 68 The Subcontractor shall have no claim against the Employer for any outstanding monies from the first contractor unless, There is an assignment by the first contractor to the Employer Article 891 Remember the Common law doctrine „Privity of Contract‟ Dunlop Pneumatic Tyre Co Ltd v Selfridge & Co Ltd © Venkat
    69. 69. TERMINATION OF CONTRACTS A Muqawala contract can be terminated in three ways  Upon completion of work (actually it is completion!)  Upon cancellation of the contract by mutual consent  By order of the court Article 892  A party injured by the cancellation may make a claim for compensation from other party to the extent allowed by custom. Article 895 69© Venkat
    70. 70. 70 Concepts that are distinctly different from Common law doctrines • Statutory obligation of good faith (Article 246(1)) • Statutory imposition of joint and several liability (Art 291) • No requirement for “Fitness for purpose”. • Obligation only to use „reasonable skill and care‟ (Art 383) • Un just enrichment (Article 106) • Judge has the power to alter the Liquidated damages (390) • Genuine pre-estimate is of less importance © Venkat
    71. 71. 71 THE ENDNOT The Journey has just began! Questions? A presentation by Venkat Please take few minutes to fill a feedback form Thank You! © Venkat
    72. 72. COURT’S VIEW ON CONTRACT ISSUES 72 • Validity of Contract • Privity of Contract • Governing law • Rules of interpretation • Non-performance of Nominated subcontractors • Comment on the „back to back‟ obligation • Lump-sum subcontracts • Breach of duty by subcontractor • Conditional payment provisions • Variation works • Set off in payments • Liquidated damages Over 100‟s of Case law from Dubai Court of Cassation, Abu Dhabi Supreme Courts © Venkat
    73. 73. 73 • Concept of prevention principle • Defects liability • Time bars and condition precedent notice requirements • Force majeure/Doctrine of unforeseen circumstances • Duty of Good Faith • Right to suspend work • Burden of proof • Liens to secure payments • Termination rights • Unjust enrichment • Role of Engineer • General concerns COURT’S VIEW ON CONTRACT ISSUES Coming Soon!! © Venkat