Contractor’s exposure to delay damages under Qatari law

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As the countdown clock to the immovable 2022 FIFA World Cup deadline ticks ever louder, the expansion and diversification of Qatar’s construction industry continues apace.

Of pressing concern to all contractors is the extent and duration of their liability in respect of the works they agree to perform. Parties to a construction contract will routinely agree to allow for the payment of liquidated damages (LDs) by the contractor in the event that he breaches certain of his contractual obligations thereunder. The contractor derives some comfort from being able to estimate his potential exposure to the employer in such circumstances (and to price the risk accordingly); for his part, the employer benefits from having a mechanism to quickly recover pre-agreed amounts to compensate for losses flowing from such breach, without having to prove his actual damage in the context of costly and time-consuming formal legal proceedings. While liquidated damages are generally enforceable as a matter of Qatari law, this article will examine the scope for their imposition to be refuted in certain circumstances…

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