1. AR50123 Assignment
Name: (Sameh Kandil Mohammed Ibrahim)
In submitting this assignment, I certify that all this material is my own work,
except where I have indicated otherwise with appropriate references.
The steps you are required to take in constructing your Practical Scenario assignment are
provided below as an aid to organising your answer. For example, you might like to use these
points as a basis for section headings.
1) Give an outline of the project that is the focus of your practical scenario, in
Order to provide a context for your responses to the following: [5 marks]
Page 1 of 9
2)
Drawing on your practical scenario:
a) Describe the basis on which your contract selection was made and evaluate
how well the contract generally performed against your contract selection
criteria. [25 marks]
b) List the aspects of design liability that were dealt with under the contract,
Explaining why each was regarded as a significant feature of the project.
[20 marks]
c) How was risk apportioned in the contract? Evaluate the extent to which the
Contract provisions met the actual on-site conditions encountered. [20 marks]
d) What unforeseen problem(s) arose? [30 marks]
i) Explain the basis for your choice of conflict management technique to
settle the problem.
Assuming the problem escalates into a full-blown dispute:
ii) Identify and justify a choice of a preferred dispute resolution
technique.
iii) Analyse how the parties are likely to view each other once the dispute
resolution technique has run its course. Were the alternatives feasible?
Do not include the chosen standard form of contract with your answer but ensure that it is
fully referenced. Where you include extracts from the literature or clauses/judgments from
case law in your answer make sure they are clearly distinguished from the body of your
answer by, for example, setting them in bold italics. Do not include unnecessary detail or
padding.
Maximum essay length 2,000 words (there is no minimum).
(Write your assignment, with an appropriate title, here.)

2. AR50123 Assignment
Name: (Sameh Kandil Mohammed Ibrahim)
Section 1-Part A: Project Description
Page 2 of 9
Project Description
Project: District Cooling Plant for Rihan Heights
Location: United Arab Emirates
Employer: MUBADALA Capital Land Real Estate L.L.C
Architect: WS Atkins Partners Overseas
Main Contractor: Kharafi National
Type of Project: EPC Turnkey Project
Type of Contract: Lump Sum Fixed Price
Conditions of Contract: FIDIC – EPC Turnkey – First Edition 1999
An EPC/Turnkey contract was signed between Mubadala Capital Land Real Estate and Kharafi
National to construct a Central District Cooling Plant, Reticulation Pipes Networks and
Installation of cooling equipment in the Energy Transfer Stations to service the Rihan Heights
Development in Zayed Sports City- Abu Dhabi, United Arab Emirates.
The main contractor scope includes design, procurement, delivery, construction, testing and
commissioning, provision of spare parts and operation/maintenance of the plant for 12 months
following commissioning and possessing the taking over certificate.
Furthermore, the contractor is responsible for any coordination issues, which may arise with
any other contractor(s) who may be involved in Zayed Sports City; which may include, but is
not limited to, design changes, stockpiling the material on site and taking over work areas.
There were two contractors, with which Kharafi has to coordinate. Firstly, the main contractor of
Rihan Heights towers who constructed the Energy Transfer Stations rooms in basement floor
where Kharafi is going to install the Cooling equipment.
Secondly, the infrastructure contractor who is carrying out the utilities works which will serve
the towers. The utilities service corridors were intersecting in plenty areas with the route of
reticulation Pipes Networks of the District Cooling Plant.

3. AR50123 Assignment
Name: (Sameh Kandil Mohammed Ibrahim)
Section 1-Part B: Construction Law Aspects
Law of Contract
As per Field (2013), the law of contract was applied in the cooling plant project as follow: -
Page 3 of 9
• Offer and Acceptance
Mubadala, Employer, wishes to enter into a contract for the Engineering, Procurement and
Construction of District Cooling Plant for Rihan Heights and invited a firm price tender.
The Employer received the tender documents of all tenderers (Offers) to evaluate all of them
and then he accepted the offer of Kharafi awarding it the executing of the whole work under the
offered lump sum fixed price.
• Intention to Create a Legal Relation
The Employer nominated Kharafi by issuing the letter of Acceptance confirming that; the
contract documents will be issued within 45 days of issuing the letter of acceptance. Until
finalizing the formal contract documents, the letter of acceptance together with the
correspondences and the submitted tender shall constitute a binding contract between Kharafi
and the Employer.
The letter of acceptance was signed and then issued by Employer to Kharafi who accepted and
signed it as well.
• Agreement in the Eyes of the Law
All the essential terms and conditions of the agreement, as was advised by Fenn et al., Mason
and Lavers (2008:1-10), were included in the letter of acceptance, which was accepted and
signed by both parties. These terms were; contract conditions, time for completion,
responsibility of the Contractor towards exiting site conditions, Insurances, liquidated damages
and advance payment.
• Considerations
The Employer stated in his letter of acceptance the consideration, which will be given to the
Contractor in return back to his services. These considerations were valued as 53,166,016
UAE Dirhams.

4. AR50123 Assignment
Name: (Sameh Kandil Mohammed Ibrahim)
Section 2: Contract Selection Criteria
1.0 – Employer’s Selection Criteria
The decision of employer to select EPC/Turnkey contract was based on the followings;
Firstly, The EPC contract reduces the opportunity for claims as the design and construction
are the single point of responsibility of one part as was stated by Huse (2002:18). In the
traditional method of procurement the claims always result from instructions or directions given
by the engineer.
Secondly, getting cost certainty is a target for the employer. The Lump Sum pricing method,
which is often used in the EPC contract enables, the Employer to get such certainty as was
stated by Huse (2002:19).
Thirdly, the employer needs for fast track procurement so he has chosen the EPC contract.
The speed of procurement is another feature of the EPC contract, as was stated by Huse
(2002:20), as it combines the two phases of design and construction. In certain cases the
contractor may start construction before completion of design. Consequently, EPC contract can
lead to earlier completion of project.
Fourthly, the employer was seeking for efficiency, which is a result of EPC contracts because
the contractor designs and builds the works so he doesn’t need time to understand the
Employer’s design. Also the design in EPC projects always takes into consideration the
construction method of contractor, providing more efficiency and timely completion.
Finally, the employer needs the contractor to deliver a cooling system ‘Fit for the Purpose’ for
which it was made. Under EPC contract, the contractor is strictly liable for delivering the fitness
for purpose and he is responsible for the failure of the design to the standards required.
2.0 – Contractor’s Selection Criteria
The contract selection criteria of contractor, Kharafi, do match with the employer selection
criteria as followings;
• The contractor was looking for EPC contract as he has a massive experience in
constructing cooling plants beside he owns all design capabilities, so the contractor
doesn’t need the design to be supplied by design consultant as he can take this
chance and get more financial profits by doing both.
• The contractor was looking for efficiency and delivering this fast track project on time to
maintain his image as an experienced contractor for constructing cooling plants so that
the EPC contract is the key for achieving such targets as performing the design by his
own will give the opportunity to consider his method of construction during the design,
which will lead to more efficiency and completion the project on time.
• The contractor was looking for building a long-term relationship with the employer in
order to win future opportunities so that avoiding issuing claims was an important step
in building such relationship. The EPC contract will let the design and construction to
be the sole responsibility of contractor so that the claims, which always result from the
designer faults and instructions, will be eliminated.
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5. AR50123 Assignment
Name: (Sameh Kandil Mohammed Ibrahim)
Page 5 of 9
Section 3: Design Liability
1.0 - Contract Liability
According to the contract between the Employer and Kharafi National, the contractor shall be
responsible for the design of the works and for the accuracy of all Employer requirements
including design criteria and calculations as was stated in FIDIC (1999:17). Even any data
received by the contractor, from the Employer shall not relieve the contractor from his
responsibility for the design.
Another contract was signed between Kharafi and piles subcontractor and according to this
contract, the design and executing of piles is the sole responsibility of the subcontractor but the
site investigation was the responsibility of Kharafi.
One event was encountered during the project as follows; -
Two of the executed piles were failed in the pile tests thus the subcontractor claimed for the
cost of demolishing the piles and re-digging it because the consultant and Kharafi delivered
and signed off the piles. The main contractor, Kharafi, rejected the claim as the sole
responsibility of that failure is still with the subcontractor, according to the signed contract, even
if the work was delivered and signed off.
2.0 - Law of Tort Liability
Kharafi owned a duty of care for its design and for delivering the cooling plant, which has to be
fit for the purpose. Furthermore, Kharafi had a duty of care regarding visiting the site to have
fully and properly informed itself of the site conditions.
During the project life cycle, there was no evidence for any deviations from Kharafi side for its
duty of care towards the Employer as there were no records for damages during the defect
liability period.

6. AR50123 Assignment
Name: (Sameh Kandil Mohammed Ibrahim)
Section 4: Unforeseen Ground Conditions Risk
The Employer assigned the risk of ground conditions to the contractor, Kharafi, as during the
tender stage Kharafi was invited as a nominated contractor to visit the site and execute the
necessary ground investigations to be fully aware of site ground conditions for which they will
be liable according to the contract’s particular conditions.
The preliminary investigations were carried out in the tender stage, showed that the nature of
site soil doesn’t require digging piles so that Kharafi didn’t price for such piles. After awarding
the project and getting into site to start carrying out more investigations it was appeared on the
surface that it was required to dig and cast piles on which the plant foundations will be rested.
The contractor executed the required piles in a cost of 200,000 AED.
Apparently, the contractor encountered loss due to the possession of the ground conditions risk
as the investigation which were done during the tender weren’t precise enough to enable the
tender team to include the price of piles in the their offer to employer.
Furthermore, the execution of the required piles didn’t generate only the loss of 200,000 AED
but it allowed for more fiscal losses as follows: -
• The plant structure was on the critical path and the required duration of 25 days to
execute the piles weren’t planned in the schedule of project. These 25 days caused
delays to the critical path and thus to the project completion date. The contractor
decided accelerating the schedule by increasing the manpower and extending the
working hours, which increased the expenditures.
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7. AR50123 Assignment
Name: (Sameh Kandil Mohammed Ibrahim)
Page 7 of 9
Section 5: Managing Conflict
Clause 5.1 of the project contract’s particular conditions stated that the contractor should
ensure that the works are fully coordinated and integrated with the activities of other
contractors. Therefore the coordination between Kharafi and the other contractors is the sole
responsibility of Kharafi. A coordination meeting was held between Kharafi and the
infrastructure contractor to coordinate the work amicably and the most critical issue was the
dewatering system of the infrastructure contractor, which is located inside the boundary of
Ancillary building’s foundations, one of the cooling plant structures.
The Planned date to start the work in the building’s foundations was set to be on 22-Feb-11
thus the infrastructure contractor have to remove his system before this date as was agreed in
that meeting.
Unlike the agreed sequence of work, the infrastructure contractor didn’t remove his dewatering
system before 22-Feb-11 to enable Kharafi starting their foundation works. The result of the
aforementioned situation was delays of 20 days to the completion date of the cooling plant so
that Kharafi raised a claim asking for an extension of time and prolongation cost.
At this point the conflict between Kharafi and employer occurred because the employer referred
to the contract clause 5.1, which stated clearly that Kharafi owns the coordination responsibility,
therefore the employer rejected the claim in accordance with this clause.
Kharafi asked for a meeting to negotiate with employer the validity of their claim. Kharafi started
the negotiation meeting with a positional approach stating that the coordination with the
infrastructure contractor occurred according to the formal minutes of meeting so the
encountered delays weren’t due to the lack of coordination but were due to the fault of
infrastructure contractor as he was using an old dewatering system, which stopped within 7
days after operating it. Kharafi confirmed that they notified the infrastructure contractor several
times; however, it is not Kharafi’s responsibility to fix the system or force the other contractor to
replace his faulty system. Kharafi started with a positional approach as they think the delay
occurred was out of their control and the coordination as requested by contract was done as
was proved by the recorded minutes of meeting.
However, the employer insisted that Kharafi owns the sole responsibility of the event according
to the contract’s clause 5.1 plus in fact Kharafi has done a mistake by not informing the
employer in writing with that event.
Kharafi then had taken the principled approach to be more flexible in sorting out the issue to
maintain the relationship with an important employer like MUBADALA. Kharafi stated that they
insisting on their right to have an extension of time but they will withdraw their claim for
prolongation cost.

8. AR50123 Assignment
Name: (Sameh Kandil Mohammed Ibrahim)
Page 8 of 9
Section 6: Dispute Resolution
There are different techniques by which the disputes can be resolved such as Mediation,
Adjudication, Arbitration and Litigation. The preferred techniques are the mediation,
adjudication and arbitration because they are faster, and cheaper than the litigation besides
they maintain the confidentiality rather than the litigation where the case will become public and
will attract the press interest as was stated by Fenn et al., Mason and Lavers (2008:7-32)
The chosen techniques as per clauses 20.2, 20.4 and 20.5 of the general conditions of the
contract, FIDIC (1999:53-55), between Kharafi and Employer were Adjudication and Arbitration.
The dispute wasn’t resolved during the negotiation the employer adopted a positional approach
and clause 5.1 blocked the negotiation as the employer referred to this clause, which confirms
that the coordination between the work of Kharafi and the other contractors is the sole
responsibility of the former.
On the other hand the plant contractor confirmed that they complied with the contract clause by
coordinating closely with the other contractor, however, the faulty dewatering system is out of
the plant contractor control as they notified him with the potential delays but they cant direct the
other contractor to change his system specially the replacement of dewatering system will incur
additional cost to that contractor.
During the arbitration, it was found that Kharafi wasn’t entitled to an extension of time because;
• They are liable for such delays because Kharafi owns the sole responsibility of
coordination with the infrastructure contractor.
• They had to send notification to the Employer regarding the delay issue to enable him
directing the infrastructure contractor, according to the contract between them, to
replace such faulty system.

9. AR50123 Assignment
Name: (Sameh Kandil Mohammed Ibrahim)
Page 9 of 9
References
1. Field, Chris, 2013 (Viewed 2013-04-04). Elements of a Contract.
www.lawhandbook.org.au/handbook/ch12s01s02.php.
2. Fenn Peter et al., Mason Jim, Lavers Anthony. (2008). Unit3 – AR50123:
Construction Law. United Kingdom: Distance Learning Unit, University of
Bath.
3. FIDIC, 1999. Conditions of Contract for EPC/Turnkey Projects. 1st ed.
Federation Internationale des Ingenieurs-Conseils (FIDIC). ISBN 2-88432-
021-0.
4. Huse, Joseph A., 2002. Understanding and Negotiating Turnkey and EPC
Contracts. 2nd ed. London: Sweet & Maxwell Ltd. ISBN 0 421 674105.