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Sat 4 Jul 2009 04:00 AM

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In the public interest

Dr Chandana Jayalath discusses Dispute Mechanisms for Public Works in Qatar and why settling disputes out of court is better for everyone.

In the public interest

In Qatar's public works, the employer and the engineer mostly operate as the same entity, although they are two different entities in the strict contractual sense.As such, the dispute clause, that is available in any typical infrastructure projects in Qatar, generally considers both the employer and the engineer as one party to the dispute. This may be why the dispute clause talks about disputes between employer or engineer and the contractor.

Although the majority of disputes are related to amounts or values in terms of Qatari riyals, and the quantity surveyor is the first to debate the issue, the dispute clause is silent when it comes to the quantity surveyor's input and his capacity.

We assume that the quantity surveyor operates as the engineer's representative, so a dispute between the quantity surveyor and the contractor is, in fact, a dispute between the engineer and the contractor by definition.

Disputes shall in the first place be referred to and settled by the engineer. A period of 90 days is allowed for his decision, which shall be final and binding upon the employer and contractor until completion of the work. It is not a matter for the contractor to stop work even in disagreement with the decision or whether the party's intent is to refer the case to court. If the engineer fails to comply with 90 days allowance or if the employer or contractor has a reason to dispute the engineer's decision, either party may refer the dispute to the Qatari Competent Court of Justice, subject to 15 days notice of intent.

The contractor may only refer the matter to the court within 6 months from the issue of maintenance certificate, termination, abandonment or breach of contract, whichever is the earliest. Such a court reference does not however invalidate the contract. It also provides no grounds for the contractor to cease work or for the employer to terminate the employment of the contractor. However, it is the Qatari Law that requires proceedings to take place in Qatar in Arabic, unless the court decides otherwise.

Although the Qatari courts are generally regarded as reliable, their expertise to deal with construction issues is questionable. This may be considered a drawback in the context of a highly technical, multi-million dollar, hotly contested dispute, and as a result, Qatari courts may eventually rely on court-appointed experts.

Apart from the above provisions, the parties sometimes refer the disputes to the Claims Compensation Committee at the Ministry of Finance. The jurisdiction retained with this committee to adjudicate construction disputes is not clear for many practitioners.

Arbitration is not so promoted in Qatar public works but the Qatar Chamber of Commerce and Industry is instrumental in setting up arbitral rules for disputes in Qatar. However, there is no clear reason why the parties do not pursue arbitration since Qatar is signatory to the 1958 Convention on the Recognition and Enforcement of Foreign Arbitral Awards, making foreign arbitral awards enforceable in Qatar.

However, there is a tendency for employers to look for alternatives, one of which is an amicable settlement. It gives extra contractual opportunity for the disputants to revisit the issues with their in-house expertise and arrive at an amicable settlement at the employer's level. This is an important step especially in the public interest.

Dr Chandana Jayalath is a Member of the Royal Institution of Chartered Surveyors and a senior contracts specialist for the Public Works Authority (PWA) in Qatar. His latest industrial exposure has been sidelined in the settlement of various commercial and contractual issues, claims and disputes arising in the infrastructure projects spearheaded by the PWA.

The opinions expressed in this column are of the author and not of the publisher.

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