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Many years ago when I used to deal with the JCT forms of contract, if a nominated subcontractor delayed the works, the contractor could use this as a legitimate reason to claim an extension of time. Either things have either changed since then, or not all forms of contract take this view.

Under the FIDIC Red Book form of contract, the Engineer may appoint a nominated subcontractor, but once the Contractor has accepted the nomination, he becomes responsible for the actions of the subcontractor and may not claim for any failures of the subcontractor.

In a situation where the Engineer nominates a subcontractor who has submitted a competitive price but is incapable of providing adequate performance (does this sound familiar at all?) it seems inequitable to make the Contractor responsible when he has had nothing to do with the selection of the subcontractor. Does the Contractor have any recourse in such a scenario? Well, sort of, as we will see.

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Let’s take a look at what has been happening in the Gulf construction market recently.

Drake & Skull announced plans for a major restructuring after suffering losses in 2016 of AED 787M, an improvement on 2015 when they lost AED 939M. A few weeks ago 8,000 employees of the 40 year old company Saudi Oger received letters announcing that 31st July 2017 will be their last day at work. The company apparently owes $3.5Bn to Saudi banks. Arabtec needed a cash injection early this year too after announcing losses of AED 3.4Bn in 2016. In 2015 the losses were reported at AED 2.35Bn. In March last year Al Jaber missed a debt repayment of AED16.2Bn which had been put in place in 2014 to restructure the company and in August, they announced the sale of their share in ALEC and the Shangri-La Hotel Abu Dhabi to finance yet another restructuring exercise. Then there’s the fall out between Al Habtoor and Leighton, the list goes on and this is just the tip of the iceberg for the Gulf construction industry…the small sub-contractors, sub sub-contractors and suppliers don’t make news in the financial press.

What is going on with contractors in the Gulf? Is there no work?

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UAE contractors are facing tough market conditions, with cash flow constraints and greater competition for fewer contracts placing a squeeze on margins. Expo 2020 is just around the corner now but much of the anticipated bonanza from Expo and related projects has yet to kick off. The region however still offers decent long-term fundamentals for companies prepared to ride out the current slowdown in the market.

In addition to the current slow down, UAE contractors still face pressure on cash-flow from trying to close out legacy projects, and be paid for projects delivered back in 2008-10. Many contractors are finding that market conditions in 2016 are tougher than in the previous year and most have witnessed an increase in construction disputes.

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In this blog I am going to share one of the secrets that we teach on our courses to help our students and attendees produce successful claims. If you are not already applying these principles, I guarantee that they will make a massive difference to your claims and to whether they will be accepted and, resolved in a timely manner.

Let’s first take a moment to think about what a claim actually is. My definition of a claim is “something that comprises an assertion of a party’s right under the terms of a contract or at law”. In other words, we are simply asking for something to which we are entitled. (more…)

In a recent blog we explained the concept of e-courses and what you can expect when you sign up for one. In this blog, we take an objective look at e-courses by examining their pros and cons to help you decide if learning via e-courses is for you.

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The Pros

Convenience – in today’s busy world where we’re trying to fit what often feels like a hundred things into our day, the biggest advantage of taking an e-course is convenience. You don’t need to alter your weekly schedule to accommodate class attendance, rather, you fit study in to your existing schedule. For example, some people perform best in the morning (usually after a coffee!) whereas others could be night-owls and prefer to study into the late hours. You decide and you are in control which means you are more likely to learn efficiently and get the maximum benefit from the course. (more…)