Privacy Settings

Claim No. TCD 001/2023

THE DUBAI INTERNATIONAL FINANCIAL CENTRE COURTS

IN THE COURT OF FIRST INSTANCE

BETWEEN

BOND INTERIOR DESIGN LLC

Claimant

and

TR88HOUSE RESTAURANT AND ENTERTAINMENT CENTER LLC
(formerly known as ELEVEIGHT RESTAURANT AND ENTERTAINMENT CENTER LLC)

Defendant

---

JUDGMENT OF JUSTICE WAYNE MARTIN

---

UPON the Claimant’s Part 7 Claim Form dated 9 March 2023 and the Particulars of Claim dated 5 May and 1 November 2023 (the “Claim”)

UPON the Defendant’s Defence and Counterclaim dated 22 June and 14 November 2023 (the “Counterclaim”)

AND UPON reviewing all relevant material added onto the Court file

AND UPON reviewing the Rules of the DIFC Courts (the “RDC”)

AND UPON hearing counsel for the Claimant and counsel for the Defendant at the Trial held before me from 12 February to 15 February 2024 (the “Trial”)

IT IS HEREBY ADJUDGED AND ORDERED THAT:

1. The Claim is allowed.

2. The Counterclaim is dismissed.

3. Judgment is entered in favour of the Claimant in the amount of AED 2,873,837.14 which includes interest accrued up to the date of Judgment.

4. Interest will accrue on any outstanding balance of the Judgment debt at the rate applicable to judgments of the Court from time to time from the date of Judgment until the date of full payment.

5. The Defendant shall pay the Claimant’s costs of the proceedings to be assessed by the Registrar if not agreed, save that the Claimant is not entitled to recover anything in respect of the costs of the report prepared by Mr Dev or of him giving evidence.

Issued by:
Delvin Sumo
Assistant Registrar
Date of issue: 28 February 2024
Time: 2pm

SCHEDULE OF REASONS

Summary

1. The Claimant (“Bond”) is a company registered in Dubai which carries on business as a builder and contractor. The Defendant (“TR88”) is a company also registered in Dubai which carries on business as the provider of restaurant and entertainment services. In the early months of 2020, the parties entered into two contracts for the performance of mechanical engineering and plumbing (the “MEP Works”) and Fit-Out Works at premises occupied by TR88 at Plot no. 392-6981, Blue Water, Marsa Dubai.

2. Pursuant to the contracts and the subsequent agreement of the parties, the Works were to be completed by the end of July 2020. However, it is common ground that the progress of the Works was substantially delayed, and they were not completed until 22 December 2021, when TR88 took possession of the premises and opened them for business. In correspondence exchanged during the course of the Works, each party blamed the other for the delays. The parties maintained that position in these proceedings, with each party initially asserting that the other was entirely responsible for all delays, although as will be seen, the parties modified their respective positions during the Trial.

3. When the Works were completed and handed over to TR88, Bond issued a final account in respect of the amounts it claimed were due under the contracts. Because of disputes between the parties with respect to components of that final account, including most particularly components relating to:

no agreement was reached with respect to the balance due on the taking of the final account.

4. Bond commenced these proceedings seeking, in effect, a determination as to the amount due under the contracts and an order for payment of that amount. For the reasons which follow, the Court has concluded that, as at the date of Judgment, Bond is entitled to AED 2,873,837.14, including interest up to the date of Judgment, and judgment will be entered for that amount. Interest will accrue on any amount due under the Judgment until that amount is paid in full at the rate applicable to judgments of the Court. TR88 will be ordered to pay Bond’s costs of the proceedings, save for the costs (if any) of the expert evidence upon which Bond relied, to be assessed by the Registrar of the Court in default of agreement between the parties.

The contracts

5. On 26 January 2020, the parties entered into a contract for the performance of the MEP Works on the project for a lump sum price of AED 6,510,440.00.¹ The time specified for completion of the Works was 123 calendar days from commencement. The operation of the provisions of the contracts relating to the time for performance will be referred to in more detail later in these reasons.

6. On 3 March 2020, the parties entered into a contract for the performance of what is sometimes described as Civil Works and sometimes as Fit-Out Works on the project for a price of AED 3,567,221.00. The contract provided that the Works were to be completed within 128 calendar days of commencement.

7. The general terms of each contract were identical, although of course the Works to be performed pursuant to those terms were different, albeit closely interrelated.

8. Each agreement took the form of a short (one page) agreement executed by the parties, which incorporated an appendix which in turn incorporated various other documents including general conditions of contract and various attachments including such things as the Scope of Works, pre-contractual correspondence and so forth.

9. The appendix to each agreement also includes various detailed provisions relevant to clauses within the General Conditions of Contract. Details within the appendix which are relevant to the issues in these proceedings include:

10. The appendix also provides, by reference to clause 1.4 of the General Conditions, that the law of the contract is the law of Dubai and the laws of the UAE insofar as they apply in the Emirate of Dubai. The appendix also provides that the Commencement Date shall be the date of the release of the advance payment to the Contractor or the date of the signature of the agreement by both parties, whichever is the later.

11. Relevant provisions of the General Conditions include clause 6, which defines the term “Defined Risks” to mean and include various things, including “any failure of the employer or Employer’s Representative” and “loses (sic losses) arising out of charges (sic changes) instigated by the employer or Employer’s Representative”.

12. Clause 7.2 of the General Conditions states that the Contractor was to submit to the Employer’s Representative a programme for the Works in the form agreed by the parties for approval by him.

13. Clause 7.3 of the General Conditions provides:

14. I digress to observe that it seems clear that the words in parentheses in the first paragraph of this clause should be construed on the basis that either the words “save where” are construed as “provided” or on the basis that the word “not” is omitted, so that the Contractor is not entitled to an extension if the delay is caused by any act or omission for which it is responsible.

15. Clause 7.4 of the General Conditions provides:

16. Clause 8 of the General Conditions specifies the procedure to be followed at the time of takeover of the Works by the Employer. By its terms, the Contractor is required to give notice of the contention that the Works are complete, after which the Employer must, within 14 days, either issue a Taking Over Certificate stating the date on which the Works were completed or reject the Contractor’s notice stating his reasons. The clause provides that if the Employer fails either to issue the Taking Over Certificate or reject the notice by giving reasons within 14 days, the Taking Over Certificate shall be deemed to have been issued on the last day of the 14 day period. The clause also provides that a Final Completion Certificate is to be issued 14 days after the expiration of the defects period specified in the appendix to the contract. The clause also provides that if the Employer fails either to issue a Final Completion Certificate within the period specified, or to give notice specifying work required to be done within that time, the Final Completion Certificate shall be deemed to have been issued on the first day after 14 days following expiry of the defects period.

17. Clause 10 of the General Conditions is concerned with variations and specifies the procedure which is to be followed by the parties in relation to variations claimed by the Contractor.

18. Clause 10.4 provides:

19. Clause 10.6 requires the Contractor to submit an itemized makeup of the value of any variations and claims within 28 days of the instruction or event giving rise to the claim. The clause also requires the Employer to check and if possible, agree the value of the variation.

20. Clause 11 of the General Conditions provides that the first half of the retention amount is to be paid within 15 days after the issue of a Taking Over Certificate, and the second half of the retention amount is to be paid within 30 days after all specified defects have been remedied.

21. The same clause provides that within 14 days after the issue of the Final Completion Certificate the Contractor shall submit a final account to the Employer’s Representative, and within 15 days thereafter the Employer is to pay to the Contractor any amount due or specify any disagreement with the amount claimed.

22. Clause 11.8 provides that:

23. Clause 16 of the General Conditions provides that in the event of a dispute “the parties … irrevocably nominate the DIFC Courts in Dubai as the appropriate jurisdiction under the laws of United Arab Emirates applicable therein …”.

The course of the Works

24. Following execution of the agreements, Bond developed and submitted a Baseline Programme to TR88 for approval. The Programme incorporated the Works to be performed under both contracts in a single programme. Following discussions and negotiations which took place during March and April 2020, Bond submitted and TR88 accepted a revised Programme with a finish date of 30 July 2020. As the Programme applied to the Works to be performed under both contracts, 30 July 2020 became the agreed completion date under both contracts.

25. On 11 March 2020, Bond provided TR88 with the advance payment guarantees required under each contract and received the advance payments for the Works to be undertaken under each contract. By virtue of the appendix to each contract, this became the Commencement Date. It follows that the date of 30 July 2020 agreed by the parties does not correspond exactly to the times for performance specified in each contract (123 and 128 days respectively) although nothing turns on this.

26. Within days of the commencement of each contract Bond gave notice of delays as a result of matters for which it asserted TR88 was responsible. For example, on 16 March 2020, five days after the Commencement Date, Bond wrote to TR88 asserting that there was no MEP design available for kitchen equipment which prevented finalisation of the shop drawings and progress on site, together with procurement of materials.²

27. Two weeks later, on 1 April 2020, in a letter to TR88, Bond asserted that the latest drawings which had been issued for construction through an email dated 23 March 2020 included noticeable changes with respect to the first floor indoor gaming area and in the roof, which would have time and cost implications. The letter also referred to delays in approval with respect to the relocation of the Fresh Air Handling Unit (FAHU), and to changes in relation to the placement of firefighting equipment which would also have time and cost impacts. The letter also asserted that specifications for the sanitary fittings had not been finalised, which was impacting the preparation of details relating to installation and the laying of drainage pipes. Reference was also made to the need for the appointment of an ELV specialist contractor, which was asserted to be adversely affecting ELV containment and conduit placement at the site.³

28. These are two early examples of what became a regular chain of correspondence from Bond to TR88 throughout the course of the project, giving notice of matters which were said to be causing delays to the performance of Bond’s Works, and for which Bond was not responsible. Included within that correspondence were a number of claims for extensions of time. The latest of those was a claim made in a letter dated 13 June 2021, claiming an extension of time to complete the Works due under both contracts until 28 August 2021.⁴ The letter referred to nine events which were said to have delayed and were continuing to delay the progress of the Works.

29. For reasons which will be explained, it is unnecessary to review this correspondence in any detail in these reasons.

30. TR88 generally responded to Bond’s assertions by denying responsibility for the matters which were said to be causing delay, and reciprocating with allegations of delay by Bond in the performance of the Works. Some examples will suffice to indicate the tenor of the correspondence between the parties which characterised the course of the project.

31. On 27 April 2020, in the course of correspondence relating to the revised baseline programme, TR88 asserted that Bond was responsible for delays in pre-construction relating to the preparation and submission of shop drawings and submissions with respect to materials, and in construction works by not having a gypsum sub-contractor on board, and in relation to the commencement of works with respect to drywalls and masonry.⁵

32. On 7 June 2020, TR88 sent four letters to Bond, each asserting that “the project is facing continuous delays” as a result of matters for which Bond was responsible – namely:

33. For the sake of completeness, I note that by letter dated 14 June 2020 Bond responded to TR88 asserting that, in effect, all delays were due to matters for which TR88 was responsible.¹⁰

34. On 3 August 2020, TR88 replied to correspondence from Bond issued during July 2020 in which Bond made assertions to the effect that the Works were being delayed by matters for which TR88 was responsible. In that letter, TR88 denied Bond’s assertions and asserted that actual progress had been extremely slow, exacerbated by poor workmanship, the need for re-works and the lack of a permanent project manager.¹¹

35. In the letter TR88 gave specific details of what it asserted were delays in the performance of various components of the contract Works by reference to the revised programme. The assertions were said to be corroborated by various photographs which were included with the letter, and by a site inspection report prepared by Mr Manoj Kumar dated 28 June 2020, which was also included with the letter.

36. In that report, Mr Kumar asserted that the Works were not compliant in various respects and suggested changes in the manner of performing the Works.

37. Again, for reasons which will be explained in due course, it is unnecessary to delve into the detail of the exchanges of correspondence between the parties. It is sufficient to observe that the project was characterised by continuing exchanges of correspondence of the kind illustrated above, in which each party blamed the other for delays in the progress of the Works.

38. It is common ground that the Works were substantially complete by December 2021. On 19 December 2021, Bond sent TR88 a final Fit-Out inspection report and asserted that all defects identified on the “snagging list” had been rectified.¹² On 22 December 2021, TR88 took possession of the site and opened the premises for business.

39. On 28 December 2021, Bond sent TR88 Taking Over Certificates in relation to the Works performed pursuant to each contract. TR88 neither issued the Certificates nor notified Bond of any Works which remained to be completed within 14 days of receipt of the Certificates. Accordingly, under the terms of each contract, the Certificates were deemed to have been issued 14 days after they were provided to TR88 – namely, on 11 January 2022. The first half of the retention monies, which were equivalent to 5% of each contract sum, were payable within 15 days thereafter – that is, by 26 January 2022.

40. 11 January 2022 is also the date upon which the defects period started. Under each contract that period was 365 days. The remaining retention was payable within 30 days of all defects being rectified. The defects period expired on 11 January 2023.

The course of the proceedings

41. During 2022, the parties negotiated with respect to the final statements of account in relation to the monies due under each contract. However, they were unable to reach agreement and these proceedings were commenced on 9 March 2023.

42. In the Claim Form, Bond claimed 4,142,210.71, which was then said to be the balance of account due under both contracts.

43. On 5 May 2023, Bond provided particulars of its claim. Those particulars focused on delays in the performance of the Works said to be caused by matters for which TR88 was responsible and included a statement of final account showing how the amount of 4,142,210.71 was calculated. That account included claims for prolongation costs and variations under each contract.

44. On 22 June 2023, TR88 filed its Defence and Counterclaim. In that pleading TR88 responded specifically to each allegation made by Bond in its Particulars of Claim. The thrust of the pleading can be characterised by the assertion that:

45. TR88 asserted that no extension of time was ever approved or granted and that it was agreed that variations would not be paid unless signed and stamped by TR88.¹⁴

46. TR88’s Counterclaim was based upon alleged delays by Bond in completion of the Works, particulars of which are provided in the pleading. TR88 counterclaimed for liquidated damages and loss of profits by reason of delay in the completion of the Works.

47. On 13 July 2023, Bond served its Reply and Defence to Counterclaim. In general terms, Bond joined issue with the allegations made in the Defence and Counterclaim, reiterated its assertion that TR88 was responsible for all delays to the completion of the contract Works and denied any liability under the Counterclaim.

48. On 1 November 2023, Bond substituted new Particulars of Claim in place of the Particulars previously provided, with the leave of the Court. Those Particulars amplified the claim previously made, and placed particular reliance upon the operation of certain contractual provisions, particularly those relating to the deemed acceptance of applications for extension of time if not rejected within seven days. As with the previous pleading, the focus of the substituted Particulars is upon the delay in the completion of the contract Works. The amount of AED 510,046.88 is claimed by way of prolongation costs in respect of the delays for which TR88 was said to be responsible.

49. Although the claim for a final account is reiterated in the Substituted Particulars, no reference is made in the text of the Substituted Particulars to any component of the final account other than the claim for prolongation costs. In particular, although claimed variations are a significant component of the account under each contract, no reference is made to the variations in the text of the Substituted Particulars.

50. On 14 November 2023, TR88 filed a substituted Defence and Counterclaim in response to the Substituted Particulars of Claim. That pleading responds specifically to each allegation made in the Substituted Particulars, but otherwise takes the same general form as the previous Defence and Counterclaim – namely, the assertion that Bond was falsely blaming TR88 for delays in relation to the performance of the Works in order to obscure delays for which it was responsible. The Substituted Counterclaim reiterates the particulars of delay which are said to be the responsibility of Bond contained in the earlier pleading together with the claims for liquidated damages and lost profits based upon those delays.

51. Apart from reiterating the general assertion that variations were only payable if signed and stamped by TR88, no reference is made in the Substituted Defence and Counterclaim to Bond’s claim for payment in respect of variations or indeed to any other item in the final account claimed by Bond.

The trial

52. When the matter came on for trial, in the course of their opening submissions I observed to counsel that although the claim was for a final account, there appeared to be no reference in the pleadings, written opening submissions or evidence to any components of the final account other than those relating to delay. Using the claims for variations as an example, I observed that the materials before the Court did not identify with any clarity those variations which were agreed, and those which were disputed, nor did there appear to be any direct evidence substantiating the claims for variations that might be disputed. I invited counsel to address me on these issues later in the course of the trial.

The witnesses of fact

53. Each party adduced testimony from two witnesses of fact, each of whom was crossexamined.

Bond’s witnesses

Mr Ajay Kumar

54. Mr Kumar is the MEP Operations Manager for Bond and was the Project Manager for the execution of the MEP Works for TR88. Mr Salas was the Project Manager for the Fit-Out Works on the project.¹⁵

55. Mr Kumar’s first witness statement is brief and is concerned only with issues of delay and extension of time, which are addressed at only the most general level.

56. In his second witness statement, Mr Kumar responded to assertions made in the witness statement of Dr Khalili, in relation to such things as:

• Compliance with the Meraas Manuals, which formed part of each contract;
• The general procedure adopted with respect to variations;
• The extent to which Bond provided a project manager during the course of the project;
• The descoping and rescoping of works in the roof top toilet areas;
• General allegations of delay by Bond.

57. Mr Kumar’s cross-examination focused largely upon issues of delay and the alleged lack of supervision by a project manager. In the course of cross-examination, Mr Kumar confirmed his written testimony to the effect that work on the toilets in the roof top area were descoped and then later rescoped.

Mr Mohamed Riyas

58. Mr Mohamed Riyas is the Operation Cor-Ordinator of Bond. He was responsible for the communications between Bond and TR88 relating to the Works under each contract. His witness statement is brief and refers at a very general level to the communications between Bond and TR88 relating to the project.

59. Mr Riyas was cross-examined in relation to changes in design and the Project Managers used by Bond in relation to the project.

TR88’s witnesses

Dr James Khalili

60. Dr Khalili is a Co-Owner and Manager of TR88. In his witness statement he asserts, at a level of great generality, that Bond intentionally ignored the obligation to apply with the Meraas Manuals which were part of the contracts. He also asserts, again at a level of great generality, that Bond tried to claim for variations in respect of work required to comply with the Manuals.¹⁶ Dr Khalili also stated that he made it clear that any variation must have his signature and the stamp of TR88 on the document before it would be paid.¹⁷

61. Mr Khalili’s witness statement also deals with:

• The asserted lack of a Project Manager on site;
• Quotations for variations which he asserts were unjustified (without providing any details in relation to such quotations);
• Delays (at a level of great generality);
• An assertion that Bond refused to establish a gas connection unless a certain amount of money was paid.

62. Dr Khalili was cross-examined in relation to his assertions with respect to the Meraas Manuals and in relation to some variations. He accepted that some variations were approved without specifying a time within which the work had to be complete, and that variations were being approved by TR88 during December 2021.

63. In cross-examination, Dr Khalili confirmed that a final inspection checklist was sent to TR88 in December 2021.¹⁸

64. Dr Khalili also confirmed that work with respect to the roof top toilets was rescoped, and was not on the critical path and was not in fact performed until March 2022.

65. An email from Mr Kumar of Bond dated 19 January 2022¹⁹, in which Bond asserted that it had completed work on the “snagging list” was put to Dr Khalili. He was unable to dispute that assertion.

66. Another snagging list circulated by TR88 in May 2022²⁰ was put to Dr Khalili in crossexamination. He accepted that Bond was not given access to the premises in order to undertake the Works on that list, and justified that position on the basis that TR88 was running a business on the premises.

67. Dr Khalili accepted that Bond completed all the work relating to the MEP snag list but asserted that the snag list relating to the Fit-Out Works had not been completed by Bond.

Mr Ardalan Foad Bashiri

68. Mr Ardalan Bashiri was TR88’s representative on site. His witness statement is concerned with:

• An asserted lack of a Project Manager and inadequate general supervision on site;
• Delays (at a level of great generality);
• The procedures used with respect to claimed variations;
• Bond’s applications for extensions of time (at a level of great generality).

69. In cross-examination, Mr Bashiri confirmed Dr Khalili’s evidence to the effect that Bond completed the work relating to the MEP snag list, and the assertion that Bond did not complete the work relating to the Fit-Out snag list.

The expert witnesses

70. Bond adduced expert evidence on the subject of delay from Mr Vimal Kaspar Dev, an employee of Bond. TR88 adduced evidence on the subject of delay and quantum from Mr Andew J Bowler, an independent consultant.

71. Mr Dev produced a lengthy report on the subject of delay, and a short report in response to Mr Bowler’s report, although for some reason he did not see Mr Bowler’s report on the subject of delay until a day or two before giving evidence, and was therefore unable to respond in any detail to that report. Mr Bowler produced three reports on the subject of delay and quantum. The experts also produced a joint report briefly identifying the matters upon which they agreed and disagreed.

72. The experts gave their evidence concurrently and were cross-examined by counsel. I also questioned each expert at some length in order to gain a greater appreciation of their reports and the reasoning which underpinned their opinions.

73. For reasons which will appear, it is unnecessary to consider either the reports of the experts or their oral testimony at any great length. It is sufficient to identify the features of the evidence which are material to the issues which must be determined.

74. The expert evidence assumed greater significance than it otherwise might because of the fact that neither party adduced any direct evidence of the detailed facts upon which their respective cases depended. As noted, the factual evidence was given at a great level of generality, and some of it appeared irrelevant to the issues which arose in relation to the final account. It seems that each party assumed that their factual cases could be made out by their expert witnesses or purely by reference to the documents in evidence, even though the assertions made in many of the documents were contentious, as noted above.

75. However, the evidence of each expert was unsatisfactory in a number of respects. Mr Dev is an employee of Bond, and cannot be described as an independent expert. His evidence on delay depended entirely on his application of the Primavera software programme utilised by the parties. He fed data into that programme which then produced conclusions which he adopted. However, he was unable to explain or verify those conclusions by reference to any knowledge or experience of the sequence or manner in which the Works were performed. In this respect, the Primavera programme functioned rather like a “black box”, into which data was put and from which conclusions were extracted but which Mr Dev was unable to explain or verify.

76. Most significantly, Mr Dev made no attempt to assess the impact of the many allegations made by TR88 in relation to delay on the part of Bond. Further, he assumed that all variations which were not refused by TR88 were valid variations, even if they were not accepted by TR88, and entered those variations into the programme of works on the basis that Bond was entitled to extensions of time to perform them.

77. Mr Dev made no attempt to assess actual prolongation costs but rather relied upon estimations made at the time of tender.

78. Mr Bowler did not undertake his own delay analysis but took the position that Mr Dev’s delay analysis had not been established. Although he produced his version of the final account, he was unable to explain or verify a number of the components in that version of the account.

79. For example, Mr Bowler included a credit to TR88 in relation to the descoped roof works in the amount of 475,145, as compared to the credit proposed by Bond of 161,404.98. He was unable to explain the difference between these two amounts. He acknowledged that the Works were rescoped, and that the amount of 475,145 related to the estimated value of the Works at the time they were descoped, but was unable to express any view in relation to the appropriate value or cost of the rescoped works. He attempted to justify this position on the basis that Bond had not engaged a delay expert with whom he could confer in relation to such matters. He made no reference to the detailed account provided by Bond setting out how the credit of AED 161,404.98 was calculated²¹.

80. To take another example, Mr Bowler included in his account amounts in respect of rectification works said to have been performed by third party contractors. It can be inferred that these works might relate to some of the snagging works under the Fit-Out Contract which TR88 assert Bond did not complete. However, Mr Bowler was unable to say when the work was performed, or what work was performed and could only refer the Court to the invoices for information on that subject. If the invoices are in evidence, the Court was not taken to them. Mr Bowler simply relied upon what he was told by TR88, to the effect that this was work done by third parties that should have been done by Bond. He was quite unable to verify that assertion - an assertion which was not made in direct evidence from any witness called by TR88. He appears to have taken no account of TR88’s refusal to allow Bond access to the premises in order to carry out the works on the Fit-Out snagging list.

81. Mr Bowler’s evidence with respect to TR88’s lost profit claim was also unsatisfactory. Essentially, Mr Bowler obtained figures which he asserts identified TR88’s net revenue over a 12 month period, from which he calculated average daily net revenue, which he then applied to a period of delay between 31 August and 22 December 2021. He then assumed that TR88 would have derived 20% profit from net revenue over that period, which was used to calculate his assessment of TR88’s lost profits.

82. When asked how he derived the estimate of 20% profit from net revenue he described it as a “thumb suck”. He confirmed that he had made no attempt to ascertain TR88’s actual profit margin and had simply plucked the figure of 20% out of the air, drawing upon some personal experience as a restauranteur.

83. In the result, for reasons which follow shortly, the inadequacy of Mr Bowler’s evidence in relation to the quantum of lost profits claimed by TR88 became immaterial.

84. Perhaps the most significant components of Mr Bowler’s evidence were two significant concessions which he made. Each was made in both his written reports and his oral testimony. As TR88’s case depended entirely upon Mr Bowler’s testimony, the concessions effectively bound TR88.

85. The first concession was that Bond is entitled to an extension of time up to and including 31 August 2021, by reason of the variations which had been approved. Although Mr Bowler accepted that Bond was entitled to extensions up to that date, he did not accept that Bond was entitled to prolongation costs covering that period on the basis of his view that such an entitlement only arose if Bond could establish that the variations were the sole cause of delay up to that time, and Bond had not established that. In other words, as Mr Bowler confirmed, in his view there was concurrent delay for which both parties were responsible up to and including 31 August 2021.

86. The second important concession was that Mr Bowler was unable to form a view as to whether Bond was solely responsible for the delay between 31 August 2021 and completion of the Works in December 2021. He stated that he lacked the information necessary to form a view on that subject. In the course of his oral testimony, it became clear that he was not aware of the detail of the variations that were issued and approved over this period, and in fact there were nine such variations. He did however accept, as a matter of principle, that if the variations were on the critical path of the Works, their issue would justify a further extension of time, in the same way as the variations he had considered justified an extension of time up to and including 31 August 2021.

87. In summary, Mr Bowler expressly accepted that there was concurrent delay for which both parties were responsible up to and including 31 August 2021. He did not and could not assert that Bond was solely responsible for delay between 31 August 2021 and the completion of the project Works, and the variations issued during that period give rise to the distinct prospect that there was also concurrent delay during this period.

The closing addresses

88. Shortly prior to presenting Bond’s closing address, counsel for Bond produced a modified version of Bond’s claim for a final account which omitted any claim for prolongation costs. Counsel confirmed that claim was abandoned. The other components of the modified final account will be considered specifically in due course.

89. In the course of his closing address, counsel for Bond also confirmed that Bond’s claim in respect of variations was limited to those which had been signed and stamped on behalf of TR88.

90. As a result of the significant concessions made by Bond, it is possible to deal very briefly with the issues which appeared to be most contentious at the commencement of the Trial – namely, the issues of delay and the variations. Once those issues are excluded, the case becomes one of analysis of the various components in Bond’s modified final account. However, that exercise is hampered by the failure of the parties to adduce evidence specifically directed to the components of the account. As will be seen, some of those issues have to be resolved by reference to the burden of proof, given the paucity of the evidence

91. The exercise is further hampered by the fact that for reasons which are not apparent, counsel for TR88 was unable to provide any meaningful submissions to the Court in relation to the various components of the final account claim, even though those components had been in the final account since the commencement of the proceedings.

The variations

92. Both parties produced lists of the variations which they asserted had been approved by TR88. One discrepancy in the lists was resolved during the course of closing addresses, and there is no longer any dispute in relation to the amounts claimed by Bond in respect of variations which were agreed and approved by TR88.

Delay

93. The subject of delay, which as I have noted was almost the entire focus of the pleadings and much of the factual and expert testimony was relevant to three claims, namely:

94. Bond’s claim for prolongation costs was abandoned on the last day of the Trial.

95. TR88’s claim for liquidated damages and lost profits is limited to the period between 31 August and substantial completion of the Works on 22 December 2021. However, as the appendix to each contract makes clear, TR88 can only claim liquidated damages if Bond was solely and exclusively responsible for the delay over that period. Similarly, although not subject of a contractual provision, obviously TR88 could not claim damages for lost profits if delays for which it was responsible operated concurrently with delays for which Bond was responsible. In such a circumstance, as business could not have been conducted even if Bond had not caused delay, TR88 would have suffered no loss by reason of delays for which Bond was responsible.

96. In summary, TR88 can only claim liquidated damages and/or lost profits if it has established that Bond was solely responsible for the delay over the period in respect of which those claims are made – namely the period between 31 August 2021 and 22 December 2021. The only evidence given in support of TR88’s claim in this respect was given by Mr Bowler. As already noted, Mr Bowler expressly disavowed any assertion to the effect that Bond was solely responsible for delay over that period and acknowledged that the variations which were issued during that time could support the conclusion that it was a period of concurrent delay.

97. It follows that TR88 has failed to discharge the burden of proving an essential element of its claims for liquidated damages and lost profits – namely, that Bond was solely responsible for the delay over the period in respect of which those claims are made. It follows tha both claims must be dismissed. This means that it is unnecessary to determine whether TR88 could obtain general damages equal to its loss instead of liquidated damages, pursuant to Article 390 (2) of the UAE Civil Code.

The components of the final account

98. It remains to go through the various components of the revised final account submitted by Bond in the course of closing its case. As already noted, there is very little contentious evidence or competing submissions in relation to these components.

MEP Contract

Original contract value

99. It is common ground that the original contract value was AED 6,510,440.00.²²

Descoped value for roof top MEP Works

100. Bond allows a reduction of the amount of AED 161,404.98 in respect of the descoped roof top MEP Works. As already noted, Mr Bowler includes an amount of AED 475,145.00 in respect of this item in his proposed final account.²³ However, the note to his account states “difference on the value of the lump sum deduction to be verified” and in the course of his testimony Mr Bowler stated that he was unable to identify the reason for the difference between the amount allowed by Bond, and the amount to which he referred.

101. It is clear that Mr Bowler took the amount of AED 475,145.00 from a letter dated 28 July 2021 from Bond, in which the descoped works were quantified in that amount. However, as already noted, on 29 September 2021 TR88 rescoped the works by issuing an instruction “to proceed with all MEP Works in roof top toilet areas as per latest design”.²⁴ By letter dated 4 October 2021 Bond accepted that instruction, noting that the additional works would take 40 days to perform.²⁵

102. There is no evidence which establishes the difference between the works which were descoped in July 2021, and the works which were rescoped two months later. Bond produced a detailed calculation showing how the amount which it allows as a credit was calculated.²⁶ That calculation was sent by Mr Riyas to Mr Bashiri by email on 18 October 2021, although curiously neither gave evidence about it. The account provides a detailed estimate of the value of works descoped totaling the amount of AED 276,443, which is offset by the value of materials which had to be acquired totaling the amount of AED 115,038.02, leaving a net credit to TR88 for the value of the descoped work in the amount of AED 161,404.98. That amount has been allowed as a credit by Bond in all statements of final account prepared since late 2021.

103. The Court was not referred to any evidence of any response from TR88 to the calculation provided about the time the work was performed in late 2021. In particular there is no evidence that the amount was disputed until Mr Bowler produced his report. Although the evidence is less than complete, the transmission of a detailed account which was not disputed is sufficient to establish the value of the descoped works in the absence of evidence to the contrary.

104. Put another way, on the face of the evidence before the Court, as it has not been established that the rescoped works differed from the descoped works, Bond would be entitled to assert that no credit should be allowed for this area of the Works. However, Bond has always been prepared to allow a credit in the amount of AED 161,404.98 in respect of the differing value of the works. If TR88 wishes to assert that the credit allowed is insufficient, it has had ample opportunity to adduce evidence on that topic and it carried the burden of proof in that regard. It has failed to make any real attempt to discharge that burden. Accordingly, a credit should be allowed against the contract value in the amount of AED 161,404.98 in respect of the descoping of the roof top MEP Works.

Amount paid to date

105. Bond’s revised final account shows the total amount paid to date made up of two components – in the amount of AED 5,476,740.85 plus a further amount of AED 341,327.58 described as “balance advance to be recovered”. The logic of separately dealing with each of these accounts is not all clear as they are both amounts paid by TR88 to Bond. The combination of those amounts is AED 5,818,068.43.

106. Mr Bowler has taken the same approach as Bond, but allows credits for the amounts of AED 5,510,413.26 and AED 116,327.59²⁷ Together those amounts equal AED 5,626,740.85, which is almost AED 200,000 less than the amount which Bond proposes to credit TR88. As Bond’s figure is disadvantageous to Bond as compared to Mr Bowler’s figures, there is no reason not to accept Bond’s calculations.

Outstanding retention

107. It is common ground that the outstanding retention is the amount equal to 10% of the contract price – namely the amount of AED 651,044.

Variations

108. By the end of the Trial, it had become common ground that the variations to the MEP contract agreed and approved by TR88 totaled the amount of AED 1,389,853.64.

Descoped value of BOQ items 22 and 23

109. It is common ground that TR88 should be allowed a credit of AED 226,482.33 in respect of the descoped value of BOQ items 22 and 23.²⁸

Amount received from TR88 in respect of variations.

110. In its revised final account Bond allows a credit to TR88 in respect of AED 861,146.94 in relation to amounts paid in respect of variations to the MEP contract.

111. In Mr Bowler’s proposed final account, he includes this item at the amount of AED 1,087,629.27. The explanation provided in respect of the difference is “payment made ex VAT”, although clearly that could not explain the difference between those two amounts.

112. Neither Mr Bowler nor TR88 have led any evidence to establish the amount paid in respect of variations to the MEP contract. The amount of AED 861,146.94 which Bond proposes to allow in respect of this item has not changed since these proceedings were commenced almost a year ago. If TR88 wished to adduce evidence to show that a greater amount was in fact paid in respect of variations to the MEP contract it has had every opportunity to do so. TR88 carries the burden of proof in this respect and has made no attempt to discharge that burden.

113. In these circumstances, the credit proposed by Bond should be accepted. I note in passing that the difference between the credit proposed by Bond and the credit proposed by Mr Bowler is roughly equal to the difference between the amount proposed by Bond by way of credit in respect of the contract Works and the amount proposed by Mr Bowler so that, in a very rough sense, those differences offset each other.

Balance due

114. The combination of the various debits and credits set out above produces a balance due in the amount of AED 1,484,234.96.

Interest

115. As noted, clause 11.8 in the appendix to the contract provides that TR88 is to pay Bond interest on amounts due under the contract at a daily rate equal to an annual rate of 15% per annum. Article 73 of the UAE Commercial Code²⁹ provides that the Court should generally give effect to rates of interest agreed by parties in their contracts. There is no reason why that provision should not be given effect in this case.

116. 15% per annum is equivalent to a daily interest rate of 0.041%.³⁰

117. The contracts provide that the works shall be paid for progressively as completed. The Taking Over Certificate deemed to be issued on 11 January 2022 should be taken as the date upon which payment for the Contract Works (other than the retentions) was due. The retention was the amount of AED 651,044, so that the amount of AED 833,190.96 was due on that date. Interest on that amount at the rate of 0.041% per day for the 422 days between the amount becoming due and the commencement of the proceedings totals the amount of AED 144,158.70.

118. The first instalment of the retention, in the amount of AED 325,522 was due on 26 January 2022. Interest on that amount for the 407 days between 26 January 2022 and the commencement of proceedings totals the amount of AED 54,319.86

119. The second half of the retention, being also the amount of AED 325,522 was due within 30 days after the defects were rectified. The evidence doesn’t establish when that was. As TR88 makes no claim that the works were never completed (although it asserts that some of the works were completed by others) it can safely be concluded that the works are complete. Bond claims interest on the second instalment of the retention from the expiry of the defects period on 11 January 2023. It seems likely that this is a conservative approach, as the works were likely complete before then. In the circumstances this is as good a date as any. Interest at the daily rate of 0.041% on the amount of AED 325,522 for the 57 days between 11 January 2023 and the commencement of these proceedings on 9 March 2023 is the amount of AED 7,625.24.

Total due under the MEP Contract

120. Thus, as at 9 March 2023, total accrued interest was the amount of AED 206,103.80. When added to the balance due under the contract of the amount of AED 1,484,234.96, there was a total of AED 1,690,338.76 owed by TR88 to Bond under the MEP contract at the time these proceedings were commenced.

The Fit-Out Contract

Original contract value

121. It is common ground that the original contract value was the amount of AED 3,567,221.00.

Descoped value of the roof top civil works

122. In its revised final account, Bond proposes to allow a credit of the amount of AED 1,087,997.69 in respect of the descoped value of the roof top civil works. In his report, Mr Bowler proposes a slightly higher amount – namely AED 1,096,614.27. The only notation provided by Mr Bowler in relation to the difference is “to check why different”. No evidence has been given to explain the difference, which is not material in any event, and TR88 has led no evidence to establish an entitlement to a greater credit than that proposed by Bond. Accordingly, there is no reason why the credit for the descoped works should not be allowed in the amount proposed by Bond, namely AED 1,087,997.69, which produced a revised contract value of AED 2,479,223.31.

Amount paid to date

123. It is common ground that the amount paid by TR88 to date in respect of contract works under the Fit-Out Contract is AED 2,191.018.83.

Outstanding retention

124. In its revised final account Bond claims an amount of AED 247,922.33, being 10% of the revised contract price after deducting the descoped value of the roof top civil works. However, in his statement of final account, Mr Bowler would allow Bond to claim 10% of the original contract sum – namely, AED 356,722.10. As Bond’s proposed claim in respect of outstanding retention is disadvantageous as compared to Mr Bowler’s proposal, there is no reason why it should not be accepted.

Variations

125. It is now common ground that the total amount of variations agreed and approved under the Fit-Out Contract is AED 210,149.50.

Amount paid in respect of variations

126. In its revised final account Bond proposes to allow a credit to TR88 of AED 32,933.32 in respect of amounts paid in relation to variations under the Fit-Out Contract. This is precisely the same amount as was included in the final account at the time these proceedings were commenced.

127. In his proposed final account, Mr Bowler contends this item should be AED 52,858.32. However, no evidence has been adduced to sustain that assertion. In the absence of such evidence, the amount of the concession proposed by Bond should be accepted, as TR88 has made no attempt to discharge the burden of proving that a greater amount should be allowed.

Other descoped works

128. In his proposed final account relating to the Fit-Out Contract, Mr Bowler proposes that there should be other deductions in respect of descoped works in five areas – trampoline park flooring, kids play area flooring, kids hall flooring, office flooring and the deletion of a glass balustrade. These omissions are said to be the subject of correspondence written in August and September 2020.

129. Bond contends that credits for these omitted works are included in the composite amount of AED 1,087,997.69 which it has allowed in the inaccurately described item relating to descoped value for roof top civil works. That proposition gains some support from the statement of final account rendered by Bond in March 2022, in which credit is given for the amount of AED 1,087,997.69 simply on the basis of “omissions”³¹. However, in the result, there is no evidence which would enable me to resolve this issue one way or the other. The amount of the credit proposed by Bond in respect of omissions from the Fit-Out Contract has not changed since these proceedings were commenced – or, indeed, since the final account was issued by Bond a year before these proceedings were commenced. TR88 has had ample opportunity to adduce evidence to establish that the amount proposed by Bond is insufficient to allow for all the omissions from the contract Works. That evidence has not been adduced. TR88 has made no attempt to discharge the burden of proving that it should receive a greater credit than proposed by Bond. In these circumstances, the credit should be allowed in the amount proposed by Bond.

Back Charges

130. Although Mr Bowler refers in his reports to amounts paid by TR88 to third parties which he asserts relate to completion of the Works, he has not included those amounts in the various versions of the final account which he has included in his reports. As far as I can see, their omission is not explained in those reports.

131. As already noted, Mr Bowler is unable to verify the works to which those payments related, and the Court has not been directed to any other evidence which would sustain the proposition that these payments related to completion of the Works which were the responsibility of Bond. Further, even if it is assumed that these payments relate to the work on the snagging list relating to the Fit-Out contract, as TR88 denied Bond the opportunity of fulfilling its contractual obligations by denying Bond access to the site, TR88 could not claim the cost of performing those works from Bond. It follows that no adjustment should be made to the final account in respect of these payments.

Balance due

132. The combination of the various debits and credits referred to above with respect to the FitOut Contract produces a total amount due under that contract of AED 713,342.96.

Interest

133. The same approach will be taken with respect to interest due under the Fit-Out Contract as in relation to the MEP Contract. The amount due under the Fit-Out Contract was AED 465,420.63 (excluding the retention). Interest on that amount at the rate of 0.041% per day for the 422 days between 11 January 2022 and the commencement of the proceedings totals AED 80,527.08.

134. The first half of the retention, being the amount of AED 123,961.17 was payable no later than 26 January 2022. Interest on that amount for the 407 days between then and the commencement of proceedings is the amount of AED 20,685.40

135. Interest on the second half of the retention over the 57 days between 11 January 2023 and the commencement of these proceedings on 9 March 2023 is the amount of AED 2,903.74.

Total due under the Fit-Out Contract

136. Thus, as at 9 March 2023, total accrued interest under the Fit-Out contract was the amount of AED 104,116.22. When added to the balance due under the contract of the amount of AED 713,342.96, there was a total of AED 817,459.18 owed by TR88 to Bond under the Fit-Out Contract at the time these proceedings were commenced.

Total due under both Contracts

137. The total amount due under both contracts as at 9 March 2023 was AED 2,507,797.94.³²

Interest until judgment

138. Bond is entitled to interest at the contractual rate under judgment is entered. Based on a total amount due of AED 2,507,797.94 interest accrues at a daily rate of AED 1,028.20 on every day between 9 March 2023 and the date of Judgment. As judgment will be entered on 28 February 2024, the amount of AED 366,039.20³³ should be included within the amount for which Judgment is entered by way of contract interest up to the date of Judgment. The amount for which Judgment will be entered is therefore AED 2,873,837.14.

139. Following Judgment, interest will accrue at the judgment rate until the Judgment debt is paid in full.

140. The amounts referred to above are set out in a table which is a Schedule to these reasons, and which provides the final account as between the parties.

Costs

141. There is no reason why costs should not follow the event, and TR88 should pay Bond’s costs to be assessed by the Registrar if not agreed. However, those costs should not include any amount in respect of Mr Dev’s report, for a number of reasons, including:

MEP Contract	AED
Original contract value	6,510,440.00
Descoped value for roof top MEP Works	(161,404.98)
Amount paid for contract Works	(5,818,068.43)
Outstanding retention	651,044.00
Variations	1,389,853.64
Descoped value of BOQ items 22 and 23	(226,482.33)
Amount paid in respect of variations	(861,146.94)
Balance due	1,484,234.96
Interest on balance due until 9 March 2023	206,103.80
BALANCE DUE (including interest) as at 9 March 2023	1,690,388.76

Fit-Out Contract	AED
Original contract value	3,567,221.00
Descoped Works	(1,087,997.69)
Amount paid for contract Works	(2,191,018.83)
Outstanding retention	247,922.33
Variations	210,149.50
Amount paid in respect of variations	(32,933.32)
Balance due	713,342.96
Interest on balance due until 9 March 2023	104,116.22
BALANCE DUE (including interest) until 9 March 2023	817,459.18

TOTAL BALANCE DUE under MEP and Fit-Out Contacts (including interest) as at 9 March 2023	2,507,797.94

Interest accruing at the daily rate of AED1,028.20 from 9 March 2023 until judgment on 28 February 2024 = AED 366,039.20

JUDGMENT SUM = AED 2,873,837.14