A dispute concerning wrongful termination by an employer of works that were substantially complete
Our client, a locally based construction company, entered into a contract of about AED 40m for the construction of an industrial manufacturing facility for a pipe manufacturer in the UAE.
The contract was based upon FIDIC red-book 1987 conditions with bespoke particular conditions. The construction period was set as 12 months.
There were delays caused by the engineer by the late issuance of drawings and information, as well as by the late approval of the design by the civil defence authority, thereby entitling the contractor to an extension of time with costs. There were also a number of issues concerning under-valuation and non-payment of variations. The contractor was accordingly starved of funds to carry out its work, causing still further delays. The employer, acting in bad faith, waited until the construction was almost complete and then terminated the contract and encashed the contractor’s performance bond.
Peter Evans Partnership was employed by the Contractor to advise upon the contractual situation and develop a strategy for resolving the issues. Following this, the firm carried out a forensic review of the documents and drafted a formal request for an Engineer’s Decision under Clause 67 for submittal by the contractor. The matter is currently heading for arbitration under the ICC rules and the partnership is now liaising with the appointed legal advisors and preparing the Statement of Claim.