Expert quantum appointment in connection with a major termination-for-convenience dispute
An Arabian Gulf-based real estate developer entered into a FIDIC based contract with a far eastern main contractor for the construction of a US$650m multi storey residential development in Abu Dhabi.
The contract contained a term that allowed the employer to terminate for convenience, and, following the financial crisis in 2008 (at which time the works were at a very early stage) the employer did elect to terminate for convenience. Upon this occurrence, the contractor was entitled to recover ‘reasonable’ costs and profit reflecting the work carried out up to that date, but submitted an inflated claim for around US$ 100m. The Employer duly refused to pay and the matter ended up in arbitration under the ADCCAC rules.
Peter Evans was appointed as quantum expert on behalf of the employer, and, following a forensic study of the documents, prepared an expert report in the form of a Scott schedule and summarising with the opinion that the value of work carried out was closer to US$ 10m than US$ 100m.
The tribunal was convinced by the expert report and testimony put forward and duly awarded a figure of around US$ 10m to the contractor.