CIOB Complex Projects Contract 2013: Construction Issues in the Middle East

8 November 2013, London

Francis Ho, Head of Construction
francis.ho@olswang.com | + 44 20 7067 3000 | Twitter: @fkyh

CPC2013 in the Middle East

An international contract Roots in common law (similar to FIDIC or NEC) Provisions for Local Law and requirements in General Conditions (e.g. clauses 5.3, 10.7.1, 15.5, 18) Arbitration allows for more familiarity for international parties in dispute resolution, use of the English language, neutralityand better worldwide enforceability Special Conditions allow further modification to suit local requirements/local markets Local counsel advice recommended as always

www.olswang.com

Twitter: @fkyh

Local Sponsors
May be bound by local laws regarding jurisdiction and dispute resolution forum (e.g. Board of Grievances in KSA) Public policy requirements Prohibition on speculation Prohibition on gambling Usury Other practices forbidden under Shari ah law May also be influenced by politics, e.g. embargo on use of Israeli goods and services

www.olswang.com

Twitter: @fkyh

Local Contractors
Local content requirement Joint ventures with local parties Advantages and disadvantages Risk of lack of expertise Cultural incompatibility differing localised business practices Appropriate security for performance required Eid al-Fitr Eid al-Adha Ramadan Summertime working hours

www.olswang.com

Twitter: @fkyh

Split EPC Contracts

Tax advantages in on-/off-shore works split Where there is a split EPC, developer/owner will generally require wrapwhich: Takes precedence over split EPC contracts Provides for joint and several liability of on- and off-shore contractors Contains liquidated damages provision for late performance of entire EPC works Contains overriding dispute resolution clause Imperative for parties to obtain local law advice to ensure contract structure compliant with local laws

www.olswang.com

Twitter: @fkyh

Contract Administration and Expectations

Consider relevant legal regime applicability of notices as condition precedent to claim Guillotine provisions?

Civil law jurisdictions Obligations of good faith and co-operation

www.olswang.com

Twitter: @fkyh

Managing Disputes
Issues with evidence in international projects Without prejudice privilege Local rules of evidence GCC civil code jurisdictions should only disclose those documents requested by other side Disclosure during mediation may be used in subsequent proceedings Managing performance security On demand bonds / standby letters of credit Notice? Evidence: When to call? Revocable/irrevocable Enforcement of arbitral awards and court judgments
7 www.olswang.com Twitter: @fkyh