Construction Disputes in Bahrain

the
Construction
Disputes Law
Review
Editor
Hamish Lal
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© 2021 Law Business Research Ltd

Construction
the
Disputes Law
Review
Reproduced with permission from Law Business Research Ltd

This article was first published in December 2021
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Editor
Hamish Lal
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ACKNOWLEDGEMENTS
The publisher acknowledges and thanks the following for their assistance
throughout the preparation of this book:
AKIN GUMP STRAUSS HAUER & FELD LLP
ALUKO & OYEBODE
BASE QUANTUM IRELAND LTD
BRUUN & HJEJLE
C H TAY & PARTNERS
CHARLES RUSSELL SPEECHLYS LLP
EKP
HOGAN LOVELLS
INCE
RAJAH & TANN SINGAPORE LLP
SIROTA & PARTNERS
i
CONTENTS
PREFACE�� v
Hamish Lal
Chapter 1 BAHRAIN��1
Mazin Al Mardhi and Dana Marshad
Chapter 2 DENMARK��11
Christian Johansen
Chapter 3 ENGLAND AND WALES��22

Hamish Lal
Chapter 4 IRELAND��40
John Delaney
Chapter 5 MALAYSIA��52
James Ding Tse Wen
Chapter 6 MEXICO��64
Luis Enrique Graham Tapia, Juan Arturo Dueñas Rodríguez, Orlando F Cabrera C and
Anna García-Morineau
Chapter 7 NIGERIA��75
Babatunde Fagbohunlu, SAN and Ngo-Martins Okonmah
Chapter 8 RUSSIA��86
Vladimir Kostsov, Anastasia Fomenko and Artem Sirota
Chapter 9 SAUDI ARABIA��96

Scott Hutton, Hadi Melki, Arthur Dedels, Harry Taylor and Ibrahim Al-Atiki
Chapter 10 SINGAPORE��111
Andre Yeap, SC and Soh Lip San
iii
Contents
Chapter 11 UNITED ARAB EMIRATES��125

Rabih Tabbara
Appendix 1 ABOUT THE AUTHORS��135

Appendix 2 CONTRIBUTORS’ CONTACT DETAILS��143
iv
PREFACE
The number of construction disputes is increasing and thus The Construction Disputes Law
Review arrives with perfect timing. A number of textbooks on construction law cover the
same general legal topography and do so in a similar format constructed around national case
law or local rules. This book is different because it recognises the jurisprudential importance
of comparative analysis of the key problems in international construction law. This area is
complex. International construction law creates a blend of legal questions and there is naturally
a high demand for answers. This book seeks to fulfil that demand. Whether the reader is
a company executive, a private practitioner, an in-house counsel or an arbitrator, I hope very
much that this first edition will prove useful in navigating the complex world of international
construction law. In that context, I extend warmly my gratitude to the contributors from
some of the world’s leading law firms who have given such valuable support and cooperation
in the preparation of this work.
The Review is not intended to be an exhaustive guide to case law and legislation. It
covers comprehensively all aspects of international construction law but does so with a much
greater emphasis on the practical aspects and the practical implications of the case law, statutes
and procedures. My thinking was to provide an authoritative, clear and accessible text on
construction law to assist both those who draft international construction contracts and
those who deal primarily with dispute resolution (whether statutory adjudication, mediation,
arbitration or litigation). We have focused on time bars as condition precedent to entitlement;
right to payment for variations and varied scope of work; concurrent delay; suspension and
termination; penalties and liquidated damages; defects correction and liabilities; bonds and
guarantees; and overall caps on liability. These topics very often form the battleground in
disputes and are constantly in legal flux. For example, the Singapore Court of Appeal in
CAJ v. CAI 1 recently provided more guidance on apportionment in the context of concurrent
delay to completion.
I express, once again, my gratitude to all the excellent contributors from all the
jurisdictions represented in The Construction Disputes Law Review. Their biographies can be
1 CAJ v. CAI [2021] SGCA 102.
v
Preface
found in Appendix 1 and these highlight the wealth of experience and learning from which
we are fortunate enough to benefit. I also thank the team at Law Business Research, who have
excelled in managing and helping to deliver a project of this size and scope.
Hamish Lal
Akin Gump Strauss Hauer & Feld LLP
London
December 2021
vi
Chapter 1
BAHRAIN
Mazin Al Mardhi and Dana Marshad 1
I INTRODUCTION
Given the considerable economic development experienced in Bahrain over the past
30 years and the Bahraini governments’ aspirations to achieve the goals of Vision 2030,
the construction industry has witnessed considerable growth in recent years. As a result,
construction law practitioners are generally thriving throughout the region in respect of both
contentious and non-contentious work.
With respect to the legal framework governing construction disputes, Bahrain’s
Legislative Decree No. 19 of 2001 (the Civil Code) remains the primary source of law,
containing provisions specific to the interpretation of muqawala (construction) contracts.
Construction-related disputes form a significant portion of the cases heard by both
national courts and alternative dispute resolution platforms, particularly through arbitration.
The popularity of International Federation of Consulting Engineers (FIDIC) standard
form contracts among industry professionals in the region has inevitably led to arbitration
becoming an increasingly common forum for the resolution of construction disputes.
II YEAR IN REVIEW
Bahrain is a civil law jurisdiction and as such court judgments do not automatically form
legal precedent as they would in common law jurisdictions such as the United Kingdom.
Equally, court judgments do not automatically become public knowledge and often take
some time before being disclosed.
That said, a noteworthy judgment was issued by the Court of Cassation upholding an
International Chamber of Commerce arbitral award whereby a contractor facing substantial
liquidated damages (LDs) for late delivery of works was able to avoid all liability on the basis
that loss was not actually suffered by the party imposing the LDs. The decision enforced the
discretionary powers afforded to courts and arbitral tribunals not only to adjust the value
of LDs but also to remove them altogether where the defaulting party can establish that the
damages are grossly disproportionate to the actual loss suffered.
From a common law perspective, pre-agreed LDs are not subject to any such review or
determination by the courts irrespective of whether actual damage was suffered or not. Given
the nature of LDs arising from a valid agreement between the parties, some may consider the
court’s ability to determine whether such damages are payable as excessive and contrary to the
fundamental principles of freedom of contract.
1 Mazin Al Mardhi is a senior associate and Dana Marshad is an associate at Charles Russell Speechlys LLP.
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However, shariah law principles relating to damages and prevention of harm justify the
discretion afforded to the civil courts to ensure that damages are not grossly disproportionate
to the loss or harm suffered by a non-defaulting party. One must draw an important
distinction between LDs and penalties that are not subject to the same provisions of the Civil
Code allowing further determination or adjustment by the courts.
III COURTS AND PROCEDURE

Bahraini civil courts have the power to settle construction disputes referred by parties, and to
issue interim measures in the context of both litigation and arbitral proceedings. The role of
the courts in respect of arbitration is generally supervisory insofar as the court may determine
applications to set aside and ratify arbitral awards. Civil courts may also appoint arbitrators
upon application by a party.
Ratification of arbitral awards by the High Civil Court is a necessary precondition
for enforcement of any arbitral award. Where the jurisdictional challenges are filed with
a tribunal during the course of arbitration, the civil court has jurisdiction to hear further
appeals against any partial or final award wherein the tribunal has delivered a ruling on its
own jurisdiction. The High Civil Court’s judgment on any such appeal is not subject to
further appeal.
Additionally, civil courts are empowered to issue orders for interim measures at any
stage of arbitral proceedings upon the application of a party. Such applications are ex parte
and commonly filed with the courts of urgent matters to obtain an expedited decision that is
immediately enforceable.
i Fora
The civil courts are six-tiered:
a the courts of minor causes;
b the courts of execution;
c the courts of urgent matters;
d the High Civil Court;
e the Court of Appeal; and
f the Court of Cassation.
Unlike certain foreign jurisdictions such as the United Kingdom, Bahrain has no specialised
courts empowered to determine construction disputes.
Judges are not required to have particular expertise in construction matters. As such,
matters requiring technical or specialist knowledge are very often referred to court-appointed
experts for assessment and evaluation. Generally, courts rely heavily on court-appointed
expert reports for the determination of cases to the extent that claims relate to technical or
industry-specific knowledge.
Certain high-value commercial claims (including claims arising in relation to
construction disputes) fall under the jurisdiction of the Bahrain Chamber for Dispute
Resolution (BCDR). Cases falling within the jurisdiction of the BCDR must satisfy at least
one of the following criteria:
a the claim value must exceed 500,000 Bahraini dinars;
b at least one party must be a financial institution licensed by the Central Bank of
Bahrain; or
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c the dispute must be of an international commercial nature (i.e., a substantial part of the
commercial obligations must be carried out outside Bahrain or the dispute be located
outside Bahrain).
ii Jurisdiction
National courts have jurisdiction to hear construction disputes, or any other disputes for
that matter, unless the parties have excluded this jurisdiction by way of written agreement
prescribing an alternative dispute resolution mechanism.
The requirements for the recognition and enforcement of any such agreement are
stipulated within the Civil and Commercial Procedures Law2 and the Arbitration Law,3
which mirrors the United Nations Commission on International Trade Law (UNCITRAL)
Model Law on International Commercial Arbitration (the UNCITRAL Model Law). Civil
courts will uphold such agreements provided that they are validly executed in accordance
with the provisions of the aforementioned laws.
iii Procedure rules

The procedural rules that govern construction disputes are found in the Bahrain Civil and
Commercial Procedures Law. One should consider the following general rules of procedure
when filing a claim with the courts:
a All court proceedings are conducted in Arabic language. As such, any documents
submitted to the courts must be translated into Arabic by a licensed translator.
Notwithstanding this, Article 4 of Legislative Decree No. 27 of 2021 amending some
provisions of the Judicial Law issued by Decree No. 42 of 2002 recently noted that the
court is able to hear the statements of litigants or witnesses who do not speak Arabic
through a translator who shall take an oath to tell the truth. Further, parties to a dispute
may, before filing a lawsuit, agree in writing to choose one of the languages approved
for use by the courts. The Minister of Justice, Islamic Affairs and Endowments is due to
issue an edict specifying the languages other than Arabic that can be used in the courts.4
b The litigation process is similar across the various circuits of the civil courts, with
proceedings commencing on submission of the claimant’s application to the competent
court in the form of a statement of claim to the Case Registration Department and
payment of the applicable case registration fees online.
c Judgments issued by the first instance court may be appealed to the Court of Appeal
and the Court of Cassation, which is the highest court. The general time frame for
filing an appeal is 45 days from the date that the other party is notified of the relevant
judgment subject to the appeal.
d The right to appeal is lost if a party fails to appeal a judgment within the permitted
time frame.
2 Decree No. 12 of 1971 concerning the Bahrain Civil and Commercial Procedures.
3 Law No. 9 of 2015.
4 The edict will note the mechanism and scope of application for cases where it is possible to agree on the use
of a language other than Arabic according to their value, subject matter or parties, and the terms of that
agreement, in addition to the requirements that must be met in the language of the contract in dispute and
the rules regulating translation and hearing of witnesses (see Article 4 of Legislative Decree No. 27 of 2021
amending some provisions of the Judicial Law issued by Decree No. 42 of 2002).
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e Parties may apply for the enforcement of precautionary measures to protect the status
quo prior to the delivery of a final judgment, subject to certain conditions being
satisfied for the justification of such measures (e.g., precautionary seizure or freezing of
assets) pending resolution of the dispute in question.
Where precautionary measures are requested prior to the initiation of substantive proceedings
in respect of the merits of the case, a court of summary proceedings may grant such request
subject to the requesting party commencing proceedings before the competent court within
eight days of the order for precautionary measures being issued. In the event the requesting
party fails to do so, the precautionary measure would be automatically lifted upon expiry of
the eight-day period.
IV ALTERNATIVE DISPUTE RESOLUTION

The two most common forms of alternative dispute resolution (ADR) adopted in the
construction industry are arbitration and mediation.
i Arbitration
Bahrain’s Arbitration Law, which is for all intents and purposes the UNICTRAL Model Law,
applies to:
a arbitration seated in Bahrain (unless agreed otherwise); and
b arbitration seated outside Bahrain where the parties have agreed to apply the
Arbitration Law.5
Bahrain acceded to the New York Convention (1958) in 1988 as well as the 1966 Convention
on the Settlement of Investment Disputes Between States and Nationals of Other States
(the ICSID Convention). Since adopting the UNCITRAL Model Law as its substantive
arbitration law, Bahrain has further aligned the standard and quality of arbitral proceedings
with best international practice.
To foster the legitimacy of arbitration and enforcement of arbitral awards, the highest
courts of Bahrain apply a non-interventionist approach to arbitral awards, treating it as final
and binding except in exceptional circumstances. The High Court on its own initiative will
set aside the award if:
a the matter cannot be settled by way of arbitration;
b the award contradicts morality or public policy;
c procedural irregularities (for instance, the tribunal was not constituted as required
under the arbitration agreement or Bahraini law); and
d lack of a valid arbitration agreement.
Where any aspect of a construction dispute relates to matters of criminal activity or public
policy, such matters are reserved exclusively for national courts and may not be subject to
arbitration without exception.
5 See Article 1(1) of the Arbitration Law.
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ii Mediation
Bahrain recently passed Legislative Decree No. 22 of 2019 relating to dispute settlement by
mediation (the Mediation Law). The Mediation Law covers construction disputes as they fall
within the scope of ‘civil and commercial dispute’.
Under the Mediation Law, parties are free to appoint their own mediator or alternatively
appoint a certified mediator registered at the Ministry of Justice (MOJ). In the event of
disagreement, the parties may refer to the president of the High Civil Court to appoint a
certified mediator at the MOJ. Mediation may be conducted before the BCDR subject to
specific rules of conduct or such other rules as agreed by the parties.
V CONSTRUCTION CONTRACTS
Because of the covid-19 pandemic and other adverse market conditions, projects have
generally suffered from cash flow problems, resulting in a rise in the encashment of ‘on
demand’ bonds across the region.
Increasingly in arbitration proceedings, employers or main contractors attempt to
recoup liquidity shortfalls from contractors or subcontractors, simply because they can.
A party simply needs to request the bank to release the value guaranteed without having to
prove fault and regardless of any objections raised by the party issuing the bond. The bank is
only required to adhere to the specific terms of the performance bond to ascertain whether
the call is actionable.
In theory, liquidation of a bond may be prevented after a call is made, by way of a court
order for an injunction. However, in practice, applications of this kind rarely succeed for
a number of reasons. In particular, the bank is contractually under an obligation to release
the funds without delay.
Normally, the bank would notify the issuing party of the call as a matter of courtesy
prior to releasing payment. As such, the window to secure an injunction order is extremely
limited and such orders may take two to five days to issue, subject to the strength of the
application and consideration of the judge.
Before issuing an injunction or freezing order, the court must be satisfied that the
circumstances justify an action of this kind. Such orders are generally granted where a party
can demonstrate that the call on the bond was highly prejudicial to the party’s rights or
ongoing formal dispute resolution proceedings relating to the bond or underlying claims; or
clearly made in bad faith or in connection with demonstrable fraud.
Contract interpretation
Construction contracts are not subject to interpretation in a manner different from other
commercial agreements governed by the provisions of the Civil Code.
This is to say that where the parties have expressed their commercial terms in a clear
manner, the terms must be interpreted in accordance with their ordinary meaning and with
due regard to the customs and practices of the industry in question.6 Where uncertainty
exists and the true intention of the parties cannot be easily determined, then it is necessary
6 Article 125(a) of the Civil Code; Bahraini Court of Cassation in Challenge No. 824 J.Y. 2017; and
Bahraini Court of Cassation Challenge No. 519 J.Y. 2008.
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to ‘ascertain the common intention of the parties and go beyond the literal meaning of the
words, taking into account the nature of the dealing and what it must embody in terms of
trust and honesty and in accordance with existing customs in such dealings’.7
As such, pre-contract documents such as heads of terms and the conduct of the parties
may be considered when interpreting the common intentions.
The Cassation Court decided that, in interpreting documents, it must consider all
phrases in their entirety guided by the principle of Article 125(b) of the Civil Code. If the
ambiguity is due to the phrase having more than one meaning, it is prudent to interpret it in
a manner that suits the nature of the contract.8
Moreover, the notion of implied terms is codified under Article 127 of the Civil Code.
Essentially, a contract is not limited to the express terms but also includes everything that
according to law, custom and equity is deemed, in view of the nature of the obligation, to
be necessary to the contract, taking into consideration custom and usage, requirements of
equity, nature of business, good faith and honesty. Therefore, implied terms enhance the
express terms of the contract rather than contradict or override them.
VI COMMON SUBSTANTIVE ISSUES AND REMEDIES

The most common categories of claims adjudicated in construction disputes include:
a prolongation claims for delay, disruption and associated costs;
b variations to the scope of works;
c poor workmanship or defective works; and
d consequential and liquidated damages.
With respect to the substantive issues often raised in the context of construction disputes, the
following issues are frequently adjudicated upon.
i Time bars as condition precedent to entitlement

Generally, courts have the power to consider the application of time-bar provisions with
discretion and flexibility on a case-by-case basis.
Where it is evident that a strict interpretation of a time-bar provision would prejudice
the contractor’s right to pursue legitimate claims or recover its substantiated entitlements, the
contractor may avail of certain provisions of the Civil Code, including:
a Article 28(c), which provides that the exercise of rights is unlawful where the benefit of
the rights is disproportionate to the harm caused to another party;
b Articles 182 and 183 concerning unjust enrichment; and
c Article 129 requiring parties to execute their contracts in accordance with the principle
of good faith.
Accordingly, an employer may be prevented from relying on a contractual time bar to avoid
having to pay the contractor for works executed if:
a the sole breach is the lateness of the contractor’s claim;
7 Article 125(b) of the Civil Code and Bahraini Court of Cassation in Challenge No. 520 J.Y. 2017.
8 Bahrain Court of Cassation Challenge No. 355 J.Y. 2012.
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b the employer was made aware of the contractor’s intention to raise such a claim despite
the contractor’s failure to meet the contractual time-bar deadline; or
c the delay was actually a breach on the part of the employer.
The approach taken by the courts with respect to the application of time-bar provisions and
the consequences of failing to adhere to these is aligned with the approach adopted in the
2017 FIDIC suite of contracts.
In particular, note that, under Clause 20.2.1, the failure to notify an initial claim or
provide full particulars within the time prescribed does not necessarily result in the failure of
the claim. FIDIC contracts afford the engineer discretion to waive these requirements in special
circumstances. Similarly, the courts have discretion to permit the advancement of legitimate
claims for entitlement notwithstanding a failure to comply with time-bar provisions.
ii Right to payment for variations and varied scope of work

Where variations are carried out pursuant to employer instructions, the contractor’s right
to payment is generally safeguarded by the courts. With due regard to the overall intention
of the parties and objective of the contract, the courts will consider whether any failure to
adhere to strict notice requirements is sufficiently material to dismiss claims for payment. It
is rarely the case that legitimate claims for payment in respect of varied works are dismissed
for this reason, even in circumstances where formal procedures are not strictly complied with.
The success of claims for payment for variations depends on the quality of records
evidencing the employer’s or engineer’s instruction and the value of the varied works delivered.
Where variation costs are disputed, courts will often appoint an expert to assess the prevailing
market prices and recommend costs payable.
iii Concurrent delay

Under Bahraini law, the concept of concurrent delays and the prevention principle do
not exist.
The prevention principle is not defined within Bahraini law or formally recognised by
the courts. When determining the impact of concurrent delays on prolongation (or other)
claims, the courts will adopt a flexible approach for the apportionment of liability with due
regard to the principles of contributory negligence pursuant to Article 217 of the Civil Code.
If the court is satisfied that contributory negligence played some part in exacerbating the
harm caused, it may also rely on other provisions of the Civil Code to justify an appropriate
apportionment of liability:
a Article 87 provides that ‘A party who has committed a mistake cannot take advantage
of the mistake in a manner contrary to the principles of good faith.’
b Article 28(b) provides that an exercise of a right shall be unlawful where it aims to
achieve an unlawful interest. A contractor seeking to avoid or reduce its exposure to
liquidated damages in circumstances where concurrent delays have occurred may avail
of this provision; for instance, arguably, the employer would be exercising an unlawful
right if the employer had also contributed to the delay.
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iv Suspension and termination

With respect to a party’s right to suspend the performance of its obligations, courts do not
consider the act of suspension to be cancellation or rescission of the contract, which would
require specific notice. Exercising a right to suspend may be done unilaterally, even where the
contract does not provide for particular conditions warranting suspension.
Courts will consider whether a party’s right to suspend performance is lawful in light
of the overriding principle of good faith and whether the breach of a mutual obligation is
sufficiently material to justify suspension.
Where costs are incurred by the non-suspending party as a result of the suspension, the
suspending party will not be liable for these as damages if the non-suspending party’s mutual
obligation has not been satisfied.
On the other hand, the right to exercise termination is treated differently by the courts.
Unless expressly agreed otherwise, parties may not unilaterally terminate a contract. A party
must apply for a court order declaring termination of the contract – a practice that is fairly
unique to the region. This is not to say that parties may not agree on events that lead to
termination of a contract; however, the termination must be enforced by way of either
mutual consent or court order.
Where a party commits a material breach of its obligations and is served with notice
of the breach by the non-defaulting party, the courts will first consider whether specific
performance is possible for the defaulting party to remedy its breach.
Where performance is no longer possible, the non-defaulting party may seek rescission
of the contract and claim damages that arise as a natural result of the breach,9 in which case
the courts will aim to restore the innocent party to the position it was in before the contract
was entered into.
The courts have the power to grant the debtor a remedial period to meet its obligations
(applicable to the circumstances). The court may also reject the application for rescission, if
the obligation that was unperformed by the debtor is insignificant compared with the overall
obligations under the contract.10
v Penalties and liquidated damages

Notwithstanding that courts may be satisfied that pre-agreed liquidated damages are
a genuine and reasonable pre-estimate of damages, the courts have discretionary power to
modify the amount of the damages where the costs of the actual damage suffered are grossly
disproportionate to the liquidated damages prescribed by contract.11
The burden of proof lies with the defaulting party to prove that the harm actually
sustained by the claimant is grossly disproportionate, as opposed to the claimant proving
the extent of damage or loss incurred. The courts will not be willing to adjust the level of
liquidated damages where the difference between the LDs imposed and the actual harm
suffered is not considerable. The courts’ approach is aligned with the overriding principle
stemming from shariah law that a harm must be suffered for compensatory damages to
become payable.
9 Article 140 of the Civil Code.

10 Article 140(b) of the Civil Code.
11 Article 226 of the Civil Code.
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vi Defects correction and liabilities

Where disputes arise in relation to defective works or allegations thereof, the courts adopt
an objective and factual approach, normally assisted by court-appointed experts to assess the
veracity of the allegations. Experts will assess the extent of defective work against contractual
specifications, including any fit-for-purpose provisions in their assessment, and the courts
will more often than not uphold the expert’s findings.
Where the works in question are particularly complex, construction practitioners will
generally include arbitration agreements in their contracts to benefit from the industry-specific
knowledge of reputable arbitrators and experts. The practical difficulties of translating highly
technical documents from English to Arabic can also be problematic at best.
The doctrine of decennial liability (which is a form of statutory liability) as defined
in Articles 615 to 620 of the Civil Code provides that contractors and engineers are jointly
and severally liable for any collapse or defect, either in whole or in part, of buildings or fixed
structures constructed by them, for a period of 10 years from the delivery of the works.
The scope of decennial liability extends to (1) the total or partial collapse of the works;
and (2) any defect that threatens the stability or safety of the work. This liability may not be
excluded or limited by way of agreement.
Architects may also be held liable where defects threatening the safety or stability of the
building are found to be the result of a faulty design or in circumstances where the architect
supervised the works.12
Generally, actions in respect of decennial liability shall not be heard after the lapse of
three years from the date of the collapse of the works or discovery of the defect.
vii Overall caps on liability

Civil liability is a matter of contract or tort subject to Bahraini law.
Unlike contractual liability, tort-based liability for wrongful acts that cause harm
(such as gross negligence, fraud or wilful misconduct) may not be subject to limitation by
agreement of the parties. Any agreement purporting to provide exemption from liability
for a wrongful or harmful act is null and void. Tort-based liability is also much wider than
contractual liability as it may give rise to both foreseeable and unforeseeable damages, whereas
contractual liability does not include unforeseeable damages.
Tort-based liability must be established on the basis of a breach of duty imposed by the
law, loss or harm sustained by a party, and causation between the breach and harm suffered.
Contractual liability, on the other hand, is subject to freedom of contract and consent.
As such, liability caps may be agreed and are enforceable by the courts. However, certain
exceptions are found within the Civil Code; for example, limitation of liability clauses will
generally not be upheld in respect of infringement of intellectual property rights.
12 Article 616(a) of the Civil Code.
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VII OUTLOOK
The enforceability of force majeure clauses across the construction industry and other
sectors in Bahrain became one of the substantive issues adjudicated by national courts and
arbitral tribunals over the course of the past year. The restriction on movement of materials,
equipment and personnel has inevitably had a severe impact on projects, causing severe delay
and disruption, hence the surge in force majeure claims.
Notwithstanding the above, courts witnessed an increasing number of cases
where contractors have adopted a somewhat lax approach when particularising their
force majeure-related claims on the basis that the general impact of government-imposed
measures is undeniable. As such, many practitioners failed to appreciate that the standards of
evidence for substantiation of such claims had not changed from a judicial standpoint.
The courts have generally responded to force majeure claims with the same levels of
scrutiny previously demonstrated prior to the covid-19 pandemic, which is an approach
welcomed by most construction practitioners. For example, where contractors filed claims
deficient of fully substantiated delay or quantum analysis, or both, to justify claims for delay
and disruption, the claims failed.
One of the key concepts in each of the civil codes is pacta sunt servanda, which translates
as ‘the agreement shall govern the parties; any failure to adhere to the terms of an agreement
will be considered a breach’. However, the principle of freedom of contract must be reconciled
with that of good faith in the construction and performance of a contract.
With due consideration to both the aforementioned principles, force majeure provisions
are enforceable through the courts. However, it will be for each party to prove that the
specific events in question fulfil the contractual criteria, and to substantiate the impact and
harm suffered as a result.
10
Appendix 1
ABOUT THE AUTHORS
MAZIN AL MARDHI
Charles Russell Speechlys LLP
Mazin Al Mardhi’s primary area of practice is construction engineering and projects, covering
both contentious and non-contentious work for clients based across the Middle East.
Mazin is a senior associate in the firm’s Middle East offices, where he is a member of
the construction, engineering and projects team. Mazin acts for a range of clients primarily
based in the member states of the Gulf Cooperation Council, in relation to various business
sectors, including construction and engineering, industrial manufacturing, general trading,
insurance and hospitality. These clients range from multinational construction companies,
manufacturing and technology companies, and hotel operators to reputable family business
owners, as well as high net worth individuals.
More recently, Mazin has focused his practice on construction disputes under
arbitration. Mazin has acted for clients in high-value disputes conducted by the ICC, LCIA,
DIFC-LCIA, DIAC and ADCCAC, providing all-inclusive legal services. Mazin also works
closely with local advocates and litigators on contentious matters before the national courts
of the United Arab Emirates and Bahrain.
Mazin is qualified to appear before Bahraini courts and is fluent in both English
and Arabic.
DANA MARSHAD
Charles Russell Speechlys LLP
Dana Marshad advises on all aspects of commercial real estate, as well as construction,
covering both contentious and non-contentious work for clients based primarily in Bahrain
and the United Arab Emirates.
Dana is a member of the firm’s construction, real estate and engineering and projects
team. She assists international and local companies on various commercial real estate and
construction matters (both contentious and non-contentious).
Prior to qualifying, Dana worked on various construction projects during her training
in London. She assisted in reviewing standard form building contracts, drafting consultant
appointments as well as preparing advice in relation to a number of issues such as contractor
or subcontractor delays, employer claims and termination.
135
About the Authors
More recently, Dana has been actively involved in drafting project community
documentation, as well as commercial leases. Moreover, she has also been involved in
assisting with reviewing and amending regionally recognised construction contracts such as
the FIDIC 1999 and 2017 suites.
Dana is admitted to practise in England and Wales and is in the process of securing her
Bahraini qualification.
Dana is fluent in both Arabic and English.
CHARLES RUSSELL SPEECHLYS LLP

Bahrain World Trade Centre
Floor 24, East Tower
Isa Al Kabeer Avenue
Manama
Bahrain
Tel: +973 17 133200
Fax: +973 17 133201
[email protected]
[email protected]
www.charlesrussellspeechlys.com
136
ISBN 978-1-83862-855-0

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© 2021 Law Business Research Ltd

Reproduced with permission from Law Business Research Ltd

HEAD OF BUSINESS DEVELOPMENT

BUSINESS DEVELOPMENT MANAGERS

PRODUCTION AND OPERATIONS DIRECTOR

CHIEF EXECUTIVE OFFICER

Published in the United Kingdom

© 2021 Law Business Research Ltd

AKIN GUMP STRAUSS HAUER & FELD LLP

ALUKO & OYEBODE

BASE QUANTUM IRELAND LTD

BRUUN & HJEJLE

C H TAY & PARTNERS

CHARLES RUSSELL SPEECHLYS LLP

RAJAH & TANN SINGAPORE LLP

SIROTA & PARTNERS

1 CAJ v. CAI [2021] SGCA 102.

Mazin Al Mardhi and Dana Marshad 1

III COURTS AND PROCEDURE

iii Procedure rules

IV ALTERNATIVE DISPUTE RESOLUTION

5 See Article 1(1) of the Arbitration Law.

VI COMMON SUBSTANTIVE ISSUES AND REMEDIES

i Time bars as condition precedent to entitlement

ii Right to payment for variations and varied scope of work

iii Concurrent delay

iv Suspension and termination

v Penalties and liquidated damages

9 Article 140 of the Civil Code.

vi Defects correction and liabilities

vii Overall caps on liability

12 Article 616(a) of the Civil Code.

ABOUT THE AUTHORS

CHARLES RUSSELL SPEECHLYS LLP

© 2021 Law Business Research Ltd

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