Letters of Intent: Still Crazy After All These Years?
Reviewing the wealth of commentary on the use of letters of intent in construction contracts, one might speculate that at the time the pyramids were being built some well-intentioned Egyptian lawyer was earnestly hammering out hieroglyphics warning his contemporaries of the potentially dire consequences of commencing construction works without a concluded contract in place. Nevertheless, despite the plentiful guidance cautioning contractors against relying on letters of intent which has been produced by legal professionals in more modern times, a significant proportion of construction projects do, in fact, proceed on the basis of a letter of intent. This practice is particularly common withi [...]
Liquidated Damages in PPP Transactions
One of the most interesting aspects of working in different jurisdictions is seeing how different regions approach the same issues in different ways – both legally and commercially. An example of this in the context of PPP transactions, is the differing approach taken in the UK and the Middle East in respect the inclusion of delay liquidated damages regimes in Project Agreements.
Liquidated Damages in UK PPP transactions
In the UK, the general presumption is that a Project Company will not be liable for delay liquidated damages in the event that the service availability date (or “commercial operation date”) is not achieved by the relevant target service availability date (or “s [...]
The Middle East Nuclear Renaissance – Update
To continue the nuclear theme of my last blog, which considered the legal and regulatory frameworks necessary for a country aspiring to nuclear power, and suggested that the UAE had set the bar high in its progress to date, this blog looks at what other countries in the region are up to and how all these projects might be financed.
I had the good fortune to attend the Middle East Nuclear Energy Summit in Amman, Jordan last month. Jordan is arguably second only to the UAE in the race for peaceful nuclear energy. Indeed the Chairman of the Jordan Atomic Energy Commission told the conference of his country’s plan to become a net exporter of electricity, and to use their indigenous su [...]
The Nuclear Option: legal consequences
As you will all have noticed, there is something of a nuclear renaissance underway. Among existing nuclear powered countries those leading the comeback are the US, China and India, all building, or with ambitious plans to build many more nuclear power plants. There is also substantial interest in nuclear power from countries that do not currently have nuclear power. Of these countries, the United Arab Emirates (UAE) can probably claim to be one of the furthest along the path of nuclear new build having recently announced the award of a contract to build four nuclear reactors to a South Korean consortium and with first power to the grid scheduled for 2017. So what does an aspiring nuclear [...]
Let’s talk about it: is mediation a viable option in Dubai?
Mediation has become established in the West as a useful alternative to more confrontational and adversarial forms of dispute resolution. Here in Dubai it is uncommon, but in our experience the number of disputes is on the increase, so could it, or should it, have a role to play?
Mediation is an alternative dispute resolution procedure that allows parties with a dispute to engage a neutral third party to facilitate communication between the parties, with the aim of resolving the dispute. As it is a voluntary and consensual process, parties must agree to mediate and are free to withdraw at anytime. Mediation is also non-binding and it may well not lead to a resolution of the d [...]
Do you own the copyright in your employees’ designs?
If you’re based in the UAE, the answer to the above question is probably not.
Why is copyright important?
If a company has invested significant time and money in the creation of designs for a particular project then it will want ownership rights in relation to those designs. Copyright provides some protection against third parties copying your designs.
Copyright becomes particularly important in the event of a dispute where one of the parties to a construction project may try to move on and to take your valuable designs with them. If you do not own the copyright in those designs then you will not be able to prevent others from using them on other projects.
Who owns the copyrigh [...]
To What Extent Does Freedom of Contract Exist for You in the UAE?
If you are a construction contractor accustomed to operating in common law jurisdictions where the doctrine of “freedom of contract” is generally upheld, you should be aware that the position under UAE law is different. We explore how it is different below …
Common Law Approach
In most common law and European jurisdictions, party autonomy and freedom of contract (whilst being gently eroded since the 19th century) are concepts that are recognised and respected. English law, for example, allows commercial parties to contract freely, provided that the agreement does not contravene any laws or public policy, and the courts will generally try to support the agreement between the part [...]
Tales Of The Unexpected: Where Liability Lurks Unseen #3
Recap
After a diversion a fortnight ago to address the newsworthy events in Dubai, normal service resumes with this blog. The previous two blogs in this series considered decennial liability and liability for harmful acts under UAE law.
This blog will briefly consider whether it is possible to limit liability under your contract eg by including liquidated damages provisions, and whether the courts will give effect to such a provision.
Limiting liability
On the face of it there seems clear evidence that it is possible to limit liability under a contract – take a look at Article 390(1) of the Civil Code.
However, it is not so certain that such a limitation will be upheld. In fa [...]
Dubai World restructuring and PPPs in the Gulf
The news of the requested standstill period for Dubai World debt repayments has left those of us who advise on Public Private Partnership (PPP) projects in the region wondering what it will mean for us……
Why is it relevant for PPPs?
As most readers of this blog will be aware, PPP projects are usually largely funded by debt borrowed by a Special Purpose Vehicle (SPV). The SPV uses the money to build an asset gets paid by the public sector for the provision of services or utilities connected to that asset over the long term. The payments to the SPV come from the relevant public authority to whom the services/utilities are provided eg the schools authority, or the power offtaker.
[...]Tales of the Unexpected: Where Liability Lurks Unseen #2
Recap
The previous blog on this topic considered the potential for liability to be unwittingly assumed by parties to construction contracts. This was highlighted by the example of decennial liability under the UAE Civil Code. This blog considers another perhaps unknown liability: strict liability for harmful acts under UAE law, and considers whether parties are able to exclude such liability by contract.
THE LAW OF TORTS IN THE UAE
Extent of Liability
The UAE law of tort is set out in Articles 124 and Articles 282 – 298 of the Civil Code. These articles appear to impose strict liability on an “actor” in respect of any harm done (it seems accepted by all commentators that thi [...]
