SLQS QATAR

CPD NO. 54
29 October 2013

INTERPRETATION OF FIDIC RED
BOOK IN CONJUNCTION WITH THE
QATAR CIVIL CODE

Presented by
Ananda P. Wickramasinghe
MSc (Quantity Surveying), LL.M(Construction Law and
Arbitration)
MRICS, MCIArb, ICIOB.




Contents
The Qatar Civil Code (Law No. 22 of 2004)

Interpretation of the Contract.
The binding force of the contract.
Termination and Damages
Extension of the Time for Completion and Liquidated damages

The Civil Code - Interpretation of the Contract
Article 169(1)
If the language of the contract was clear, it is not permissible to
deviate from it by interpreting it in order to identify the will of the
contracting parties.

Article 169(2)
However if there is room to interpret the contract, then the
common will of the contracting parties must be looked for without
stopping at the literal meaning of the terms, taking into
consideration the nature of the dealing and the trust and integrity
that must exist between the contracting parties in accordance with
the custom applicable to dealings.



Article 170

1. Doubt is interpreted in favor of the debtor.

2. However if the contract includes an exemption of liability
term, it shall be narrowly interpreted.


The Civil Code - The binding force of the contract

Article 171(1)
The contract is the law of the contracting parties; it may not be
revoked or amended except by the parties agreement or for the
reasons decided by the law.
Article 172(1)
The contract must be performed in accordance with its contents
and in a manner which consistent with the requirements of good
faith.
Article 172(2)
The contract shall not be confined to committing a contracting
party to its contents, but also includes its requirements in
accordance with the law, custom and equity as per the nature of the
obligation.



Termination
Termination by agreement is generally effective when expressed
in writing by the contracting parties, when the contracting parties
do not agree to terminate the contract or when a notice of
termination is rejected, then the question arises as to how
termination should be validly made. Under the Qatari Law,
termination must be made as provided for by the contract or as
per a court order, or as prescribed by law.

The following Articles deal with termination under the Qatar
Civil Code:

Article 707 deals with Termination at will;

Articles 183, 184, 185, 688, 689, and 692 deal with the
principle of rescission and restitution;

Article 184 deals with Automatic termination; and

Articles 704, and 188 deal with termination due to
impossibility of performance.


Employers Entitlement to Termination
(FIDIC 1999 Red Book)
Sub-Clause 15.5
The Employer shall be entitled to terminate the Contract, at any
time for the Employers convenience, by giving notice of such
termination to the Contractor. The termination shall take effect 28
days after the later of the dates on which the Contractor receives
this notice or the Employer returns the Performance Security. The
Employer shall not terminate the Contract under this Sub-Clause
in order to execute the Works himself or to arrange for the Works
to be executed by another contractor.
After this termination, the Contractor shall proceed in accordance
with Sub-Clause 16.3 ... and shall be paid in accordance with
Sub-Clause 19.6 ...

Sub-Clause 16.3
Cessation of Works and Removal of Contractors Equipment

Sub-Clause 19.6 - Optional Termination, Payment and Release

... Upon such termination, the Engineer shall determine the value
of the work done and issue a Payment Certificate which shall
include:
a) the amounts payable for any work carried out ...
b) the Cost of Plant and Materials ordered for the Works which
has been delivered to the Contractor, ...
c) any other Cost or liability ... reasonably incurred by the
Contractor ...
d) the Cost of removal of Temporary Works and Contractors
Equipment from the Site ...
e) the Cost of repatriation of the Contractors staff and labour
employed ...

The Civil Code
Termination of the Contract Agreement
Article 707 (1)
The work owner may disengage himself from the contract and
discontinue executing the contract at any time before completing
it, provided that he indemnifies the contractor for all the expenses
he has incurred, and the works he has accomplished, as well as the
gain the contractor would have realized had he completed the
work.

Article 707(2)
However, the court may reduce the indemnification due for the
gain the contractor has lost, if conditions render such reduction
equitable. The court shall in particular deduct from the
compensation the portion saved by the contractor as a result of the
work owners disengagement from the contract, and the gain he
might have earned from using his time for another work.

FIDIC 1987 (Red Book) 4
th
Edition
Default of Contractor
Sub-Clause 63.1

If the Contractor is deemed by law unable to pay his debts as they
fall due, or enters into voluntary or involuntary bankruptcy,
liquidation or dissolution (other than a voluntary liquidation for
the purposes of amalgamation or reconstruction), or becomes
insolvent, ... or if the Contractor has contravened Sub- Clause
3.1, or has an execution levied on his goods, or if the Engineer
certifies to the Employer, with a copy to the Contractor, that, in
his opinion, the Contractor:
Sub-Clause 63.1
(a)Has repudiated the Contract,

(b) without reasonable excuse has failed

(i) to commence the Works in accordance with Sub-
Clause 41.1,or

(ii) to proceed with the Works, or any Section thereof,
within 28 days after receiving notice pursuant to Sub-
Clause 46.1,

(c) has failed to comply with a notice issued pursuant to
Sub-Clause 37.4 or an instruction issued pursuant to Sub-
Clause 39.1 within 28 days after having received it,

Sub-Clause 63.1

(d) despite previous warning from the Engineer, in writing,
is otherwise persistently or flagrantly neglecting to comply
with any of his obligations under the Contract, or

(e) has contravened Sub-Clause 4.1,



Sub- Clause 63.1

then the Employer may, after giving 14 days notice to the
Contractor, enter upon the Site and the Works and terminate the
employment of the Contractor without thereby releasing the
Contractor from any of his obligations or liabilities under the
Contract, or affecting the rights and authorities conferred on the
Employer or the Engineer by the Contract, and may himself
complete the Works or may employ any other contractor to
complete the Works. The Employer or such other contractor may
use for such completion so much of the Contractor's Equipment,
Temporary Works and materials as he or they may think proper.

(FIDIC 1999 Red Book ref. Sub-Clause 15.2)
The Civil Code
Contractors Obligations
Article 688(1)
If during the course of work it has been discovered that the
contractor is performing it in a defective manor or contrary to the
contract, the employer shall be entitled to warn him to correct the
method of performance within a reasonable period specified to
him, if such period has lapsed without the contractor returning to
the correct or the agreed upon method, the employer shall be
entitled to request the dissolution of the contract or to obtain a
permission from the court to perform the obligation at the
contractors expense if the nature of the work so permits.

Article 688(2)
It shall be permissible to request the dissolution of the contract
without the need of a warning or specifying a period, if the
correction of the defect or discrepancy shall be impossible.








Article 688(3)
In all situations the judge shall be entitled to refuse the
dissolution request if the defect in the method of performance
shall not decrease to a great degree the value of the work or its
worthiness for the intended use, without prejudice to the right for
compensation if so necessitated
The Civil Code
The dissolution of contract
Article 183(1)
In contracts binding on both parties, if one of the contracting
parties has failed to perform its obligations, the other contracting
party may, after notifying the former, request the dissolution of
the contract together with compensation if there are exigencies.

Article 183(2)
The judge may, if the circumstances so require, extend to the
debtor until a date determined by the judge. The judge may also
refuse the dissolution if what the debtor has failed to perform was
of minimum importance in view of his total obligations.
The Civil Code
Article 184
It may be agreed that the contract shall be considered
automatically revoked without the need for any adjudication in
case of failure to fulfill the obligation arising therefrom.
Such conditions or agreement shall not result in restricting the
judges authority in respect of rescission unless the contract
statement indicates explicitly that it was the intention of the
contracting parties.
The conditions considering the contract automatically revoked in
other than commercial matters shall not exempt the concerned
party from serving the notice. No agreement by the parties to the
contrary shall be valid.

According to Article 184, the contracting parties
may agree within the terms and conditions of the
contract that the contract automatically
terminates due to certain circumstances.

Compensation

Article 185

If the contract has been dissolved, the two
contracting parties are returned to the situation at
which they were before the contract. If the above
is impossible, compensation may be ordered.

FIDIC 1987 (Red Book) 4th Edition
Default of Employer
Sub-Clause 69.1
In the event of the Employer:

(a) failing to pay to the Contractor the amount due under any certificate of the
Engineer within 28 days after the expiry of the time stated in Sub-Clause 60.10
within which payment is to be made, subject to any deduction that the Employer
is entitled to make under the Contract,

(b) interfering with or obstructing or refusing any required approval to the issue
of any such certificate,

(c) becoming bankrupt or, being a company, going into liquidation, other than for
the purpose of a scheme of reconstruction or amalgamation, or

(d) giving notice to the Contractor that for unforeseen economic reasons it is
impossible for him to continue to meet his contractual obligations,
the Contractor shall be entitled to terminate his employment under the Contract
by giving notice to the Employer, with a copy to the Engineer. Such termination
shall take effect 14 days after the giving of the notice.

The Civil Code
Termination due to impossibility of performance

Article 188

In respect of contracts binding on two parties, if it has become
impossible for one of the contracting parties to perform his
obligation for an extraneous cause beyond his control, such
obligation as well as the counter-obligations shall abate. The
contract shall also terminate automatically.
In case of partial impossibility, the creditor may, as appropriate,
plead the contract in respect of the performable part of the
obligation or request abrogating the contract.


Article 204
If the person has proved that the damage had resulted from a
extraneous cause beyond his control such as force majeure, a
sudden incident, the mistake of the person who suffered the
damage or the mistake of others, then he shall not be liable for
compensation unless a provision providing otherwise exists.

Article 258
It may be agreed that the debtor shall sustain the consequences of
surprise incident or a force majeure.

FIDIC 1999 Red Book
Sub-Clause 19.1 Definition of Force Majeure
In this Clause, Force Majeure means an exceptional event or
circumstance:
a) which is beyond a Partys control,
b) which such Party could not reasonably have provided against
before entering into the Contract,
c) which, having arisen, such Party could not reasonably have avoided
or overcome, and
d) which is not substantially attributable to other Party
Force Majeure may include, ...
i. war, hostilities ...
ii. rebellion terrorism ...
iii. riot, commotion, ...
iv. munitions of war, ...
v. natural catastrophes ...


FIDIC 1987 Red Book 4
th
Edition
Release from Performance
Sub-Clause 66.1
If any circumstance outside the control of both parties arises after the
issue of the Letter of Acceptance which renders it impossible or
unlawful for either or both parties to fulfill his or their contractual
obligations, or under the law governing the Contract the parties are
released from further performance, then the parties shall be discharged
from the Contract, except as to their rights under this Clause and Clause
67 and without prejudice to the rights of either party in respect of any
antecedent breach of the Contract, and the sum payable by the
Employer to the Contractor in respect of the work executed shall be the
same as that which would have been payable under Clause 65 if the
Contract had been terminated under the provisions of Clause 65.

Extension of the time for completion of the works
and delay damages

There is no express provision in the Qatari Civil Code for
extension of the time for completion of the works.

However, under the Civil Code Article 687, the contractor is
under an obligation to perform the contract in accordance with
the terms and conditions contained therein and within the agreed
time frame.

FIDIC 1987 Red Book 4
th
Edition
Sub-Clause 44.1
In the event of:
a) the amount or nature of extra or additional work,
b) any cause of delay referred to in these Conditions,
c) exceptionally adverse climatic conditions,
d) any delay, impediment or prevention by the Employer, or
e) other special circumstances which may occur, other than through a
default of or breach of contract by the Contractor or for which he is
responsible,
being such as fairly to entitle the Contractor to an extension of the Time
for Completion of the Works, or any Section or part thereof, the
Engineer shall, after due consultation with the Employer and the
Contractor, determine the amount of such extension and shall notify the
Contractor accordingly, with a copy to the Employer.

(FIDIC 1999 Red Book Ref. Sub-Clause 8.4)

The Civil Code
Article 687
The Contractor shall perform the work according to the conditions
of the contract agreement within the agreed period. If no
conditions or period is agreed, the contractor shall perform the
work according to the generally accepted standards within
reasonable period as required by the nature of work with due
observance to the usage of workmanship.
The contractor shall also provide at his expense the any labour,
tools and equipment required for performing the work unless
otherwise stipulated by the agreement or usage.

Further, the Civil Code Article 172(1) provides: a contract must
be executed in accordance with the contents thereof and in a way
that is consistent with the requirements of good faith.

Liquidated Damages/Delay Damages
FIDIC 1987 Red Book 4
th
Edition

Damages for Delay
Sub-Clause 47.1
If the Contractor fails to comply with the Time for Completion in
accordance with Clause 48, for the whole of the Works or, if applicable,
any Section within the relevant time prescribed by Clause 43, then the
Contractor shall pay to the Employer the relevant sum stated in the
Appendix to Tender as liquidated damages for such default and not as a
penalty (which sum shall be the only monies due from the Contractor for
such default) for every day or part of a day which shall elapse between
the relevant Time for Completion and the date stated in a Taking-Over
Certificate of the whole of the Works or the relevant Section, subject to
the applicable limit stated in the Appendix to Tender. The Employer may,
without prejudice to any other method of recovery, deduct the amount of
such damages from any monies due or to become due to the Contractor.
The payment or deduction of such damages shall not relieve the
Contractor from his obligation to complete the Works, or from any other
of his obligations and liabilities under the Contract.

(FIDIC 1999 Red Book ref. Sub-Clause 8.7)
The Civil Code
Article 256
If the debtor fails to perform or delays performing the obligation
specifically, he shall be bound to compensate the creditor for the
damage he suffers unless he proves that the failure to perform or
delay is due an extraneous cause beyond his control.

Article 204
If the person establishes that the damage originated from an
extraneous cause he has nothing to do with, such as a surprise
incident, an event of force majeure, an error from the affected
person, or an error from a third party, he shall not be committed
to pay compensation for such damage unless otherwise
prescribed.

Article 257
The court may reduce the amount of or decide no
compensation if the creditor contributes to or aggravates the
damage.

Article 265
If the object of the obligation does not concern an amount of
money, the contracting parties may define in advance the
amount of the compensation in the contract or in a
subsequent agreement.


Article 266
No agreed compensation shall be due if the debtor establishes that
no damage has been caused to the creditor. The court may reduce
that compensation if the debtor establishes that the compensation
was greatly overestimated or the original obligation has been
partially executed. Any agreement to the contrary shall be null and
void.

Article 267
If the damage exceeds the amount of the agreed compensation, the
creditor may not claim any sum in excess of this amount except if
he establishes that the debtor has committed fraud or serious error.


It can be seen that, the Qatar Civil Code recognizes and provides
that notwithstanding provision for liquidated damages, a debtor
can request to have the court strike out or reduce the level of the
liquidated damages where the debtor is able to prove that the
creditor did not suffer any loss or that the estimate of the
liquidated damages was excessive and the obligation in question
had been partly performed.


Accordingly, provided that risk for these events is not
contractually allocated and in the event of a successful
demonstration that the delay event is solely due to matters beyond
the contractors control, a contractor may rely on Articles 204 and
256 to establish that it has no liability to the employer, whether for
liquidated damages or its actual loss.
Thank You
Questions ???