Study On The Practice Of Claims For Najmat Development Project, UAE

In high competitive construction market, Construction Claims is a good manner for Contractor to avoid the risks, to protect his legal rights. Also its level reflects the level of contract management. It is a hard and complex work. Both parties shall pay more attention to it because it affects their benefit directly.Presently, the Fourth Edition and New Editon (printed 1999) of FIDIC Conditions of Contract (international) for the Work of Civil Engineerig Construction are widly used and study. However, study on Third Edition little is little in our country, which was nomorly used for Marine Works and Roads and Bridges works in UAE. No price adjustment formula was applied for any escalation of materials based on such edition, i.e. the unit rates are fixed for the duration of contract in UAE. However, facing loss due to the high inflation in the last 2 years, the contractors had to seek any opportunity to control its cost. Claims and Price Adjustment are the main way to avoid the said loss.Under the FIDIC Conditions (Third Edition) and Applicable Law, the writer study Practice of the Claims and Price Adjustment due to the Employer's Variation Order in the background of inflation.Najmat Development Project was suffered great loss due to mentioned inflation and biding under budget. However, the Employer reduced 70% of original scope of work after 3 months of commencement by his own reason. CHEC obtain a chance to claim and price adjustment, which was entitled by the Contract. Through elaborate arrangement of claims, reasonable calculation of cost and time, long term negotiation and amicable settlement, we succeed in the claims make good profit. Moreover, both parties agreed that CHEC has the right to Price Adjustment due to inflation of main materials in future, which establish the foundation of successful execation and the Precedent for subsequence works.Based on FIDIC Conditions of Contract (international) for the Work of Civil Engineerig Construction (Third Edition), review of related literature, comparation of different editions of FIDIC Conditions of Contract and his own experience, the writer introduces the concept of Construction Claims, its legal principles, its procedure, the method of calculation of Time and Cost, including its principles, its methods and its attentions etc.. Also the writer concluded the difference between the Claims and Variations.Finally, the writer introduces the claims management practice for the Najmat Project. The claims report, negotiation and resolution are main parts of such practice. It included project risk analysis, analysis of critical events for claims, entitlement to claims and re-pricing / price adjustment, calculation of time and cost, dispute, negotiations and final resolution.