In our June market overview we are seeing that the low price of oil is continuing to affect the economy in Qatar, with cut-backs and redundancies evident. However, despite the slow-down it is forecast that US$22.2 billion will be spent on infrastructure projects this year as Qatar presses ahead with its commitments to hosting the FIFA 2022 World Cup and to realising the Qatar National Vision 2030.
Analysing the impact of the reduced spend across construction works we have identified the following trends:
- general slow-down in projects;
- late(r) payment;
- increase in internal JV disputes; and
- contractual manipulation by strategic de-scoping of works.
As a result formal disputes are on the rise. For organisations that are contemplating formal dispute resolution proceedings here are some of the key issues for consideration, both at the outset and during a dispute.
Is there a magic bullet?
- There is rarely if ever a ''magic bullet''. You must prove your claim(s).
- Decide early if it is a case of ''can't pay'' or ''won't pay''. It is rarely the former, usually the latter. The key is to escalate your claim within a list of priorities – the ''squeaky wheel'' principle.
Taking charge of timelines
- Time is always on the side of the payer, never the recipient. Consequently the payer (employer) can always afford to sit back.
- Unless there has been a clear and unequivocal waiver it is difficult to avoid clearly drafted dispute escalation provisions, but:
(i) agree a timeline for each stage of the process;
(ii) keep a record of any failure to meet the timeline; and
(iii) warn of any failure before withdrawing from the process.
- Decide early whether the other side's tactic is merely to waste time. If so set your strategy to combat this.
Is this the right route forward?
- Decide early whether you believe the other side is negotiating in ''good faith''. If no then quick escalation to formal dispute resolution proceedings is the only realistic way forward.
- Relationships are key in the Middle East. Are you concerned about relationships going forward? This may influence your decision.
Will my claim succeed?
- You will not be paid just because you make a claim. You must evidence each and every part of your claim by demonstrating:
(i) a contractual, or other, entitlement;
(ii) a causal link between entitlement and loss; and
(iii) the value of your claim.
- The quality of the evidence required for negotiation is less robust than that required for a formal dispute process. If it is obvious that negotiation will or is unlikely to be successful then prepare both. It will not be wasted time and effort.
- In difficult times (such as these) you must appear resolutely determined albeit reluctant to bring a claim if a negotiated settlement cannot be reached.
In September we will host the third seminar in our 2016 Qatar Law Construction Essentials series. The next in the series offers a practical guide to common issues arising in dispute resolution procedures in Qatar. The core focus will be how Qatar law applies to the issues you are likely to encounter.
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