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Claim No. TCD 003/2019

THE DUBAI INTERNATIONAL FINANCIAL CENTRE COURTS

IN THE COURT OF FIRST INSTANCE

BETWEEN

PANTHER REAL ESTATE DEVELOPMENT LLC

Claimant

and

MODERN EXECUTIVE SYSTEMS CONTRACTING LLC

Defendant

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JUDGMENT OF JUSTICE SIR RICHARD FIELD

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1. The Claimant (“Panther“) is a developer of residential property in the UAE. On 11 July 2017 it concluded (as the Employer) a contract (the “Contract”) with the Defendant (“MESC“) (as Main Contractor) for the construction and completion of the East 40 Building in Al Furjan, Dubai (the “Works“), a residential tower building consisting of 112 residential units (the “Project“). The agreed price payable to MESC for completion of the works was AED 40,331,550.

2. The Contract included Part 1- General Conditions of Contract, which comprise the FIDIC Conditions of Contract for Construction for Building and Engineering works Designed by the Employer (First Edition, 1999) as supplemented and amended by Particular Conditions set out at Part II to the Conditions of Contract. The governing law of the contract is DIFC law and disputes thereunder are subject to the exclusive jurisdiction of the DIFC Courts.

3. The Commencement Date specified in the Contract was 11 July 2017 and the Time for Completion was 16 months, giving rise to a Completion Date of 10 November 2018. However, the Approved Baseline Programme Completion Date was 16 December 2018 and the parties are agreed and accept that this became the Completion Date under the Contract. A witness for MESC, Mr Alkerdi, appeared to contend that the Commencement Date was 21 September 2017, the day after receipt of the Demarcation Certificate, but as between the parties it was common ground that the Commencement Date was 11 July 2017.

4. Under Sub-Clause 8.7 of the Contract, in the event that MESC failed to comply with Sub-Clause 8.2 (Time for Completion), MESC was liable to pay delay damages calculated at a daily rate of AED 42,500, with a cap on the liquidated sum equal to the value of 10% of the contract price, namely AED 4,181,153.25.

5. Panther appointed NAGA Architects, Designers and Planners (“Naga“) as the Engineer for the Project. References below to “the Engineer” are references to Naga in the capacity of Engineer appointed in respect of the Project.

6. Pursuant to Sub-Clause 4.2 of the Contract, the MESC provided a performance security consisting of an unconditional and on-demand guarantee in the amount of AED 4,033,155.00, equivalent to 10% of the Agreement Price, issued by Emirates NBD dated 24 May 2018 (the “Performance Guarantee”), which the Claimant was entitled to encash whenever it considered that it had suffered loss arising out of the MESC’s breach of contract or if the Claimant considered that sums were due from the MESC to it in relation to the Contract. In addition, pursuant to Sub-Clause 14.2 of the Contract, the MESC provided an advance payment guarantee (the ‘‘Advance Payment Guarantee”) in the amount of AED 4,033,155.00, equivalent initially to 10% of the Agreement Price on which the Claimant was entitled at any time to call in whole or in part if it considered that the MESC was in breach of contract or if any sums were due from the MESC to it under the Contract. (The Performance Guarantee and the Advance Payment Guarantee are hereafter referred collectively as (the ‘‘Security Guarantees”).

7. MESC commenced work on the Project in July 2017. By early July 2019, the delays in achieving completion of the Works were such that the agreed Completion Date of 16 December had been overshot by about six and a half months. By this date, MESC had made three EOT’s under Sub-Clause 8.4 of the Contract, the first two of which had been refused by the Engineer. The third EOT was rejected by the Engineer on 22 July.

8. EOT No 1 was dated 18 February 2018 and cited five delay events, namely, Event No. 1 - the late receipt of the Civil IFC Drawings (Structural and Architectural) for which 62 days were claimed; Event No. 2 - the delay due to Etisalat/Du Cable inside the Plot Limit claiming 31 days; Event No. 3 – delay due to late issuance of Authority Approved Post Tension Drawings for Podium, claiming 28 days; Event No. 4 – Changing Passenger Lift Supplier; and Event No. 5 – delay in receipt of MEP IFC Drawings claiming 70 days.

9. EOT No. 2 was dated 27 June 2018. This cited the Delay Events relied on in EOT No. 1, save that the two IFC Drawing delays were combined into one Delay Event and Event No. 4 – delay due to Changing Passenger Lift Supplier -- was deleted and replaced with a new Delay Event No. 4 – Iate issuance of Post Tension Drawings for Typical Floor Slab claiming 7 days.

10. EOT No. 3 was also dated 27 June 2019. This cited 11 Delay Events. Event No. 1 - delay in receipt of Civil IFC drawings, claiming 76 days; Event No.2 - delay due to Etisalat/Du cable, claiming 107 days, Event No.3 - delay due to late issuance of Post Tension Drawings for Podium Slab, claiming 125 days; Event No. 4 - delay due to late issuance of post tension drawings for Typical Floor Slab, claiming 132 days; Event No. 5 - delay due to issuance of revised Kitchen Layout drawings, claiming 139 days; Event No. 6 - delay in Finalisation of 12th floor Structural Design, claiming 100 days; Event No. 7 - delay in finalisation of 12 floor Architectural Design, claiming 120 days; Event No. 8 - delay in finalisation of 12th floor Pool Deck and Finishes Layout, claiming 161 days; Event No.9 – delay in Approval of Full Ceiling Design, claiming 100 days; Event No.10 – delay in Final Architectural and Structural Layout for roof, claiming 115 days; Event No. 11 – delay in receipt of Gym Design, claiming 298 days.

11. On 6 July 2019, MESC sent a letter to the Engineer serving a notice of slow down of the Works in response to the Engineer’s refusal to approve: (i) an extension of time; (ii) variations; (iii) delay in issuing payment. By letter dated 9 July 2019 to MESC, sent on Panther’s behalf by its lawyers Al Tamimi & Co (“Al Tamimi”), it was stated that Panther and the Engineer had been entitled under the Contract to take the actions complained about and MESC was warned that it would be a serious breach of contract to slow down the works.

12. On 15 July 2019, there was a top level management meeting at which the status of the Works was discussed and MESC undertook to provide a realistic completion program. At Progress Meeting 104 held on 31 July, MESC’s Head of Projects gave a commitment to increase manpower and supervision to comply with a newly proposed Completion Date. There was also reference at this meeting to a proposal by MESC for there to be a Memorandum of Understanding (“MoU”) to be agreed to by all parties.

13. By letter dated 8 August 2019, the Engineer instructed MESC in accordance with a power to do so under the Contract to produce a realistic program for the completion of the Contract. It was stated in this letter that MESC had no entitlement to any extension of time.

14. Sometime in August/November MESC submitted its proposed MoU which included a condition that the completion date for the Works would be revised to 31 December 2019 and that any delay damages to date would be waived.

15. At the Management Meeting held on 27 October 2019 to try to reach agreement as to handing over the Project by 31 December 2019 and to discuss the MoU, MESC committed to complete handing over the Project by that date and to using maximum endeavours to meet this milestone subject to all parties agreeing and signing the MoU. MESC said that if the MoU was not signed this would lead to more delays and the Project would be open-ended and MESC would not be committed to any completion date. Panther expressed dissatisfaction with the MoU and proposed further discussion on the proposed waiver of its rights. This meeting was attended by, inter alios, Mr Rezk on behalf of Panther and Mr Alkerdi on behalf of MESC.

16. On 28 October 2019, MESC sent the Engineer a copy of the MoU signed on behalf of MESC requesting that the document be forwarded to Panther for final endorsement. Also on this date, Panther liquidated the Security Guarantees receiving AED 4,033,155.00 under the Performance Guarantee and AED 1,000,304.67 under the Advance Payment Guarantee.

17. In a letter dated 3 November 2019 to Panther, headed “Slow Down the Rate of Work”, MESC protested at the encashment of the Security Guarantees on the day following when both parties had come to a mutual agreement for the way forward. The letter stated that in view of this development, MESC had no option other than reducing the amount of work. On the same day, AL Tamimi & Co, Panther’s lawyers, wrote to MESC on behalf of Panther describing the MoU as a crude and baseless attempt to deprive Panther of its clear and legitimate entitlements: MESC was seeking to use its own failures to perform under the Contract as leverage to absolve itself from liability for its breaches. Accordingly, Panther would not be executing the MoU under any circumstances.

18. Also on 3 November 2019, the Engineer confirmed that the Works had been suspended by MESC which had blocked all entrances to the Site and shut down the electric power and instructed its subcontractors not to attend at the Site. Five days earlier, on 28 October 2019, Panther had liquidated the Security Guarantees receiving AED 4,033,155.00 under the Performance Guarantee and AED 1,000,304.67 under the Advance Payment Guarantee.

19. On 6 November 2019, by which time the Project had been delayed by 365 days according to the Engineer and Panther, Panther sent the following termination letter (the ‘‘Termination Letter”) to MESC.

20. Sub-Clause 15.2 of the Contract provides in relevant part:

21. On 14 November 2019, MESC personnel tried to enter the Site and, when stopped from doing so by men working for a security firm appointed by Panther, made phone calls following which within fifteen minutes a bus load of labourers came to the Site’s entrance and succeeded in violently forcing their way in and attacking the staff and threatening to kill the security personnel, who called the police. Order was restored once the police had arrived at the scene.

22. Thereafter, within 20 days, Panther concluded a contract with another contractor, obtained a building permit on 28 November 2019 and completed the Works on 1 May 2020.

23. On 30 January 2020, MESC submitted a fourth EOT claim to the Engineer contending that it was entitled to an extension to the end of February 2020 by reason of late finalisation by the Engineer of the Balcony Glass Balustrade Design that occurred in late August 2019 when MESC’s approved baseline programme showed that the submission of the balcony design was planned to be completed no later than 22 April 2018. The Engineer rejected this claim, noting that MESC had failed to submit the drawings and calculations and to execute the mock-up and getting approval for submission from the Engineer to comply with the Project specifications and safety requirements which were MESC’s responsibility. Further, the subcontractor (Petra) was not a nominated subcontractor and MESC were liable to manage the subcontractor’s works. MESC was fully responsible for: (i) the balustrade works delay as it was their scope of works; and (ii) the delay of the subcontractor.

24. Briefly stated, Panther seeks liquidated delay damages and other delay damages, damages for the cost of completion (including remedying defective works) and damages for the loss of the opportunity to rent or sell the residential units within the period of 16 December¹ to 1 May 2020 (the ‘‘Takeover Completion Period”) which has resulted in lost proceeds from the potential sale of residential units or lost rent and charges from the potential rental of the units. Panther also seeks a declaration that it was entitled to encash the Security Guarantees which were validly liquidated and that it is entitled to retain the proceeds thereof.

25. MESC denies that it is liable to Panther as alleged or at all. MESC pleads that it was entitled to a total extension of time of 292 days which would deprive Panther of its claimed right to terminate by reason of the exhaustion of the maximum amount of delay damages. MESC’s expert witness on delay is of the opinion that there were 325 days of critical delay down to 6 November 2019 of which 306 days were to be assigned to Panther and 19 days assigned to MESC. In advancing its pleaded case on delay MESC relies on the following pleaded delay events :²

26. MESC submits that Panther was responsible for the great majority of the days by which completion of the Works were delayed and are entitled to an extension of time of 306 or 292 days with the result that the primary ground for immediate termination stated in the Termination Letter – the exhaustion of the cap on delay damages³ -- was an ineffective ground for termination. MESC also contends that the other contractual grounds for immediate termination stated in that letter – abandonment of the Works and/or a repeated and plainly demonstrated intention not to continue performance under the Contract” -- are not good grounds for immediate termination⁴ and that it is not open to Panther to rely on the rights conferred by Articles 86 and 88 of the Contract Law to terminate on the grounds of repudiatory and anticipatory breach because the Termination Letter did not make it sufficiently clear that the termination was based both on the terms of the Contract and on the general law of contract. It follows, submits MESC, that it is Panther that is in fundamental breach of contract and is liable in damages to compensate MESC, inter alia, for prolongation costs, the value of the unpaid work done as at the date of termination of the Contract and the cost of the liquidation of the Security Guarantees..

The factual witnesses

27. It is appropriate at this stage to set out my assessment of the factual witnesses whose evidence went to the conduct of the parties during the course of, and in the aftermath of, the Project. The witnesses were Mr Mostafa Rezk (“Mr Rezk”) and Mr Abilkassym Akprazhiyev (“Mr Akprazhiyev”) called by Panther and Mr Abdul Aziz Ebrahim Al Kerdi (“Mr Alkerdi”) called by MESC.

Mr Rezk

28. Since November 2018, Mr Rezk has held the position of Project Director at Town X Real Estate Development LCC (“Town X”), a company in a contractual relationship with Panther. Prior to November 2018, he held the position of Project Manager with Naga, a position he held from June 2018 until the completion of the Project. He has performed the role of Engineer on construction Projects for 12 years and, as one of a team at Naga, he reviewed the evaluations made in the course of the Project by a technical member of the team, in consequence of which he (Mr Rezk) was familiar with all the determinations made by Naga in the capacity of Engineer. In his witness statement Mr Rezk testifies as to: (a) a range of the Contract’s provisions that are of particular relevance in these proceedings; (b) Panther’s performance of its side of the Contract including: (i) releasing all certified payments to MESC on time except only where MESC was itself in breach of contract; (ii) there having been no existing or unanswered requests or complaints under the Contract’s mechanisms in relation to non-payment or delayed payment; (c) MESC’s EOT claims; (d) MESC’s 25 requests for variations all of which, save for three which were rejected for good reason, were resolved by positive decision or agreement; (e) MESC’s applications to the Dubai Courts seeking to prevent Panther terminating the Contract that failed for lack of jurisdiction; and (f) the defaults and breaches of the Contract alleged by Panther against MESC. On this last topic, Mr Rezk testified as to the suspension of works on 3 November 2019 and the forcible entry on to the Site by some of MESC’s labourers on 14 November 2019 as related in paragraphs 16 and 18 above. In addition, Mr Rezk testified that: (i) on 6 November 2019, MESC prevented a DEWA inspector from accessing the Site to conduct a water estimation; (ii) persistently failed to pay its subcontractors in consequence of which Panther had no choice but to begin paying the subcontractors directly; (iii) there were occasions when MESC had insufficient materials on the Site to achieve the required rate of progress of the Works; (v) MESC’s frequent changes of key management personnel had had an adverse impact on the consistency of MESC’s work force and the progress of the Works and the Project; (vi) MESC’s failure to conform to the requirements of the Contract so that, on 4 November 2019, there were 82 non-performance notices and site observations against MESC which remained open when they should have been closed by MESC in conformity with the Contract; (vi) the events that led to the termination of the Contract on 6 November 2019 as related in paras 11 – 16 above; (vii) by successive letters dated 28 and 31 October and 3 November 2019 MESC baselessly asserted that the proposed MoU had been agreed between Panther and MESC; (viii) the Engineer issued in February 2020 various requests and instructions to MESC to remove its equipment from the Site including cradles and scaffolding on hire which requests were ignored by MESC; (ix) MESC subsequently accepted the final evaluation of the Engineer without reference to any claim for equipment; (ix) at the date of termination of the Contract (6 November 2019) the Works were approximately 84.75 per cent complete but none of the units were near completion and all of them and the common areas required substantial work to bring them to completion.

29. Mr Rezk also confirmed that the actual cost to Panther of remedying defective works and the cost of completion was AED 9,436,762.80 and that, with the exception of one subcontractor, all of MESC’s subcontractors were re-engaged which minimised disruption.

30. In addition, Mr Rezk responded to 12 of the 14 delay events relied on in MESC’s counterclaim. I set out below a summary of his evidence in chief relating to these events and his evidence in cross-examination in respect of those events about which he was questioned.

31. In cross-examination on other topics, Mr Rezk accepted that Panther had a retention of AED 3.3 million at the time of termination. After termination, completion of the Project was delayed by actions taken by MESC to disrupt the work and get itself re-appointed as the Contractor by lobbying Trakhees, calling the police on numerous occasions and applying to the Dubai Courts for an order compelling Panther to re-instate the Contract. Mr Rezk also said that MESC refused to attend a meeting with the Engineer at the Site to discuss the post-termination valuation and that Panther frequently paid part of sums claimed to be due by MESC to subcontractors. Mr Rezk was also very clear that on 27 October 2019 MESC had emphatically announced that if Panther did not sign the MoU, the Project would be open-ended with no fixed completion date and would be prepared to keep the Project going for 10 years before completing it if necessary. Mr Rezk denied that in accordance with a common practice in Dubai, Panther had encashed the Security Guarantees and terminated the Contract in order to put financial pressure on MESC. There was no such practice. Panther had justifiably acted in response to MESC’s breaches of contract, particularly in relation to the delays in the progress of the Works.

32. MESC attack the credibility and reliability of Mr Rezk’s evidence alleging that this follows from his employment with Town X that has a management contract with Panther and his association with the Engineer. MESC also assert that Mr Rezk had a tendency to blame MESC whilst absolving the Engineer and Panther from all issues and contend that in a number of instances his evidence was inaccurate. I reject the submission that Mr Rezk was an unreliable partial witness. In my judgment, whilst at times he adopted the role of an advocate, he was a truthful and reliable witness who had a very impressive grasp of the many documents he exhibited to his witness statement. That said, the cogency of his conclusions on the delay events pleaded by MESC, will depend on which expert’s evidence on delay is preferred by the Court.

Mr Akprazhiyev

33. Mr Akprazhiyev’s evidence principally went to issues of quantum. He did however deal briefly with the complaints Panther make in respect of MESC’s performance of the Contract that are related by Mr Rezk on which he (Mr Akprazhiyev) was not cross-examined to any or any material extent. I deal briefly with the reliability of Mr Akprazhiyev’s evidence on quantum later in this judgment. In my view his evidence as to events occurring during the course of the Project is reliable.

Mr Alkerdi

34. Mr Alkerdi was MESC’s Head of Projects at all material times. His witness statement is essentially a summary of MESC’s pleaded Defence and Counterclaim and as such it is essentially an exercise in advocacy. The exceptions to this are; (i) his statement that the Commencement Date of the Contract was 21 September 2017, the day after the receipt by MESC of the Demarcation Certificate; (ii) what he says regarding the fourteen delay events relied on by MESC which I have recorded in paragraph 22 above; (iii) his statement that it was mutually agreed that the project would be handed over by 31 December 2019.

35. In cross-examination, Mr Alkerdi testified that: (i) during discussions in November and October 2019 the parties agreed to forget the delay that had occurred; (ii) following receipt of the letter from Al Tamimi dated 6 July 2019, which came after the Engineer’s determination of MESC’s EOT3, MESC accepted in accordance with the Contract the Engineer’s determinations in respect of EOT1, EOT2 and EOT3; (iii) the MoU signed by MESC was sent to the Engineer for Panther to sign after Panther had indicated they would sign but at the same time they said they had some comments on it about consultants’ fees; (iv) confirmed the accuracy of the note of the meeting held on 27 October 2019: "MESC informed that failing to sign the MoU by all parties will lead to more delays in the Project. The Project will have an open end and they will not be committed to any completion date." But he denied that he said at the meeting “if it took ten years, if necessary MESC would not complete the Project”; (iv) he did not accept the contents of the Engineer’s Report on the incident on 14 November 2019 (p. 1237); (v) until a new building permit was issued to a new contractor, MESC was entitled to occupy the site and take steps to prevent the site’s occupation by third parties; (vi) he accepted that MESC, after the Engineer had made his decision on MESC’s EOT applications, had an obligation to respect the Engineer’s determination unless MESC expressed dissatisfaction under the formal mechanism within 14 days.

36. In re-examination, Mr Alkerdi said in reference to MESC’s “Slow down rate of work” letter dated 3 November 2019 that, in his opinion, a slowdown of work was not the same as suspension of work.

37. Mr Alkerdi was not such a careful witness as was Mr Rezk who took noticeable care to give reliable and accurate evidence. Where Mr Alkerdi’s evidence on an event that occurred during the Project differs from that given by Mr Rezk, I prefer and accept the evidence of Mr Rezk.

Panther’s case that the Engineer’s negative determinations of MESC’s four EOT’s is fatal to MESC’s claim in these proceedings that it is entitled to an extension of the time for completion of 292 days or any delay.

38. The provisions of the Contract applicable to this part of Panther’s case are as follows:

39. Panther contends that all of the Defendant’s 14 delay events, save for DE-3 and D-4, were either: (a) not notified to the Engineer within 28 days of MESC becoming aware or when it should have become aware of the event or circumstance relied on for the claimed EOT; and/or (b) were not made the subject of a detailed claim within 42 days of giving notice of the event as required by Sub-Clause 20.1. In the submission of Panther, all the conditions prescribed in Sub-Clause 20.1 are in the nature of conditions precedent to MESC being entitled to an EOT. It follows, argues Panther, that MESC is not entitled to an extension of time in respect of DE-1 and DE-2 and DE-5 – DE -14.

40. Paragraphs 42 – 44 of the Claimant’s Closing Submissions read:

41. It follows in Panther’s submission that MESC is barred by Sub-Clause 20.1 from raising all alleged delay events other than DE-3 and DE-4 as a defence or in support of its counterclaim in these proceedings.

42. MESC accepts that : (i) the condition in Sub-Clause 20.1 that the Contractor must give notice to the Engineer, describing the event or circumstance giving rise to claim for an extension of time not later than 28 days after the Contractor became aware, or should have become aware, of the event or circumstance; and (ii) the condition in Sub-Clause 8.13 that the Contractor must provide a time impact analysis (“TIA”) or such additional supporting information as the Employer may require within 28 days of being requested to do so, are both condition precedents to the entitlement to obtain an EOT. In MESC’s submission, none of the other conditions relied on by Panther are conditions precedent because the Sub-Clauses in question do not stipulate that, if there is non-compliance, the Contractor will have no entitlement to apply for an EOT.

43. Panther further argues that the following additional provisions of the Contract affect MESC’s entitlement to seek a EOT or to challenge a EOT determination by the Engineer:

44. Whether a procedural requirement of the nature of the 42 day notice referred to in (1) above is a condition precedent to the entitlement of the obligee to seek a potential advantage under the contract depends on the meaning and effect to be given to the provision. In Bremer Handelsgesellschaft v Vanden Avenne Izegem [1978] 2 Lloyds Rep 109, Lord Wilberforce said in relation to a Sub-Clause in a GAFTA form that was very differently worded from the Sub-Clauses now under consideration:

45. What this means in my view is that the Sub-Clause in question must be construed in accordance with the basic rules of construction that apply to all contracts, see Akenhead J in WW Gear Construction Limited v McGee Group Limited [2010] EWHC 1460 (TCC) at [13].

46. The 42 day requirement does not expressly state that if it is not complied with the contractor will lose what would otherwise be an entitlement to claim an EOT. However, that in itself is not necessarily fatal to a conclusion that it is a condition precedent. In Education 4 Ayrshire Ltd v South Ayrshire Council, a decision of Lord Glennie in the Outer House [2009] CSOH 146, none of the Sub-Clauses in a construction contract requiring the giving of notice in respect of an extension of time or a claim for compensation specifically provided that a failure to comply would disqualify the contractor from seeking such an extension or compensation. Instead, both Clauses made no express mention of any consequences if a notice was not served as soon as practicable of a delay or likely delay. Another Clause concerned with the occurrence of a Works Compensation Event specified a procedure for relief. After considering all the procedural notice clauses Lord Glennie held that compliance with the latter Sub-Clause was a condition precedent to the right to apply for compensation.

47. The fact that the second paragraph of Sub-Clause 20.1 expressly provides that failure to give notice of an event or occurrence within 28 days after the Contractor became aware, or should have become aware, of the same is a factor that prima facie suggests that the 42 day notice Sub-Clause is not a condition precedent pursuant to the “expressio unios exclusio alterius” maxim. However, this maxim is not necessarily determinative: instead it must give way if the wording of the Sub-Clauses when construed in the context of Sub-Clause 20.1 and of the Contract as a whole leads to the conclusion that it was intention of the parties that the Sub-Clause was to operate as a condition precedent even though the Sub-Clause did not expressly so provide. In my judgment this is how this Sub-Clause should indeed be construed for the following reasons.

48. If the 28 day requirement is complied with, it is obviously very important for the sake of commercial certainty that the claim is progressed with reasonable expedition so that both parties know what will be the impact, if any, of the notified event or circumstance on the completion date stipulated in the contract. In my view, the only practical way of achieving this outcome is for the 42 day requirement, which is not in itself of a burdensome nature, to be a condition precedent and not a mere exhortatory proposal which it otherwise would be. Indeed, unless the 42 day requirement is a condition precedent, much of the point of the 28 day condition precedent is substantially undermined.

49. Turning to Sub-Clause 3.5, this is a promise not to challenge an adverse determination if it is not challenged within 14 days of its issuance combined with an agreement that if a compliant 14 notice is given, the determination will only be challenged in accordance with the dispute resolution terms contained in the contract. As Mr Alkerdi frankly accepted in cross-examination, MESC did not give a 14 days’ notice expressing dissatisfaction with any of the determinations made on its three EOT’S and, accordingly, MESC is contractually bound not to challenge those determinations in these proceedings at least in respect of Panther’s entitlement to liquidated delay damages.

50. MESC rely on the judgment of Akenhead J Obrascon Huarte Lain SA v Attorney General for Gibraltar [2014] EWHC 1028 (TCC) for the proposition that the requirement to give a notice only arises when the works are actually critically delayed and even then, the notice would have to be given within 28 days of the critical event occurring.

51. In this case the contract in question contained the same Sub-Clause 20.1 as is in play in the instant case. In reference to this Sub-Clause Akenhead J said:

52. On this basis, MESC contends that due notice was given of the critical delay events:

53. If Akenhead J was intending to say in Obrascron Huarte that, if a contractor was aware of an event or circumstance that gave rise to the real prospect of a delay on the crictical path, he need not seek an EOT giving notice of that event or circumstance under Sub-Clause 20.1 until 28 days had elapsed from the inception of the critical delay, which is how MESC construes the judge’s words, I respectfully disagree with what the judge said. In my opinion, the effect of the first paragraph of Sub-Clause 20.1 is that, if a contractor is aware or ought to have been aware of an event or circumstance that could give rise to an EOT claim, he must give notice of that event or circumstance within 28 days after he became so aware or ought to have been so aware.

54. It follows that I reject MESC’s contention in its closing submissions that due notice was given by reference to the critical delay events as set out in paragraph 52 above.

55. I turn to examine and give my conclusions on Panther’s contention that all but DE-3 and DE-4 of MESC’s 14 delay events were notified after the expiration of the 28 day limit.

56. As to DE-3 (shifting of Etisalat/DU cable) and DE-4) these featured in EOT No. 1 in which MESC claimed 31 days for the former Delay Event and 28 days for the latter Delay Event. The Engineer refused the application in respect of DE-3 on the ground that it was not detailed or supported and was based on MESC’s post-works 16 December 2017 programme update and there had been no such update. In respect of DE-4 (issuance of post tension drawings for podium slab) the Engineer found this event had caused no delay; the delay complained of had been caused by the late submission of the drawings by MESC. MESC concedes that it did not give notice within 14 days of the notification of the Engineer’s adverse determination that it was dissatisfied with the determination. It follows that, as held in paragraph 49 above, MESC thereby became contractually bound and remains contractually bound under Sub-Clause 3.5, to give effect to the Engineer’s determination and thus is disqualified from seeking a different determination in these proceedings at least in so far as Panther’s entitlement to liquidated delay damages is concerned.

57. MESC contends that the delays to which the Works were subject were due to matters for which Panther alone was responsible and, placing heavy reliance on the decision of Bailey J sitting in the Supreme Court of the Northern Territory of Australia in Gaymark Investments Pty Limited et al v Walter Construction Group Limited, MESC further contends that: (a) by reason of the “Prevention Principle”, time is no longer in accordance with the contractual provisions concerned with time, but is “at large”; and (b) it follows that MESC was only obliged to complete the Works within a reasonable period of time, an outcome MESC was in the course of achieving when the Contract was terminated.

58. In Multiplex Construction v Honeywell Control Systems [2007] EWHC 744 (TCC), Jackson J (as he then was) said:

59. In Gaymark, one of the applications before the court was for leave to appeal under s. 38 of the Commercial Arbitrations Act an arbitrator’s interim award that the Employer under the construction contract in question was not entitled to liquidated damages as against Concrete Constructions (the Contractor) for delay in the completion of the works. The liquidated damages provision in the contract provided for damages of $6,500 per day to a maximum of $2.3 million for each day that completion was delayed beyond the date fixed for practical completion or “within any extended time granted or allowed by the Superintendent …”.

60. Sub-Clause 19.2 of the Special Conditions provided: "The Contractor shall only be entitled to an extension of time for Practical Completion where ... (b)(i) the contractor has complied strictly with the provisions of Sub-Clause SC19.1 and in particular has given the notices required by Sub-Clause SC19.1 strictly in the manner and within the times stipulated by that Sub-Clause."

61. The contract did not contain a provision that was sometimes included in contracts of the sort in question that empowered the Superintendent in his discretion to grant a EOT even where the contractor had not complied with the time limits for making such an application.

62. The arbitrator found that a particular period of delay of 77 working days was caused by Gaymark but the contractor’s application for an extension of time in respect thereof was barred by a failure to meet the notification requirements for a EOT.

63. The arbitrator held the prevention principle applied to disentitle Gaymark from the right to be paid liquidated damages. In his view it would be absurd if Gaymark could recover liquidated damages where it itself had been the cause of the delay in question.

64. Bailey J stated that acceptance of Gaymark's submissions would result in an entirely unmeritorious award of liquidated damages for delays of its own making. [69] and he referred to the following passage in the judgment of Salmon J (as he then was) in Peak Construction (Liverpool) Ltd v McKinney Foundations Ltd (1970) 1 BLR 111:

Bailey J then went on to say:

65. As Jackson J observed in Multiplex at [99], Bailey J took a different view from that expressed obiter by Cole J in Turner Corporation Limited (Receiver and Manager Appointed) v Austotel Pty Limited (2nd June 1994); 1997 13 BCL 378 at 12:

66. In his article "Prevention and Liquidated Damages: a Theory Too Far" (2002) 18 Building and Construction Law (p.82) the late Professor Ian Duncan Wallace QC expressed the view that Gaymark was an example of a hard case producing bad law. In his view, both the arbitrator and Bailey J failed to approach the problem posed by the impact of the prevention principle on a right to apply for an EOT subject to strict time requirements in respect of delay caused by the employer. By expressly agreeing, without more to owner prevention or breach being included in the list of permitted grounds of extension, the parties have very clearly indicated that acts or omissions of this kind should be dealt with under the liquidated damages machinery of the contract in which must be included the extension of time notice requirements, unless otherwise stated, in the same way as any other ground of extension. And the practical justifications for making compliance with notice requirements in respect of extensions of time conditions precedent are powerful. First, because whether many such events are or are not on the contractor’s critical path of progress is likely to be much better known to the contractor than to the owner, and secondly, because depending on the particular circumstances and grounds of extension, the owner is warned and may be in a position to reduce or avoid the delay altogether.

67. As Jackson J relates in paragraphs 101 and 102 of his judgment in Multiplex, Professor Wallace’s view was accepted in Peninsula Balmain Pty. Limited v Abigroup Contractors Pty. Limited [2002[ NSWCA 211, where the New South Wales Court of Appeal declined to follow Gaymark and preferred the reasoning of Professor Wallace. Also, in City Inn Limited v Shepard Construction Limited 2003 SLT 885, the Second Division of the Inner House of the Court of Session held that the contractor could not obtain an extension of time if it did not comply with a notice Sub-Clause.

68. In Multiplex Jackson J said that he too doubted that Gaymark had been correctly decided:

69. Before expressing my conclusion on the question whether Gaymark ought to followed and applied in this case, I must deal with a submission made by MESC that the parties to the Contract were each subject to a duty of good faith and/or reasonableness and/or a duty to co-operate by reason of Article 57 (c) and (d) and Article 58 of the DIFC Contract Law whose effect is to prevent Panther from giving full force and effect to the time requirements that I have held to be conditions precedent to MESC’s entitlement to apply for an EOT.

70. These Articles provide:

71. In my view, Panther is not constrained by these Articles in the Contract Law from seeking to be entitled to liquidated damages for the delays for which MESC could have applied for a EOT but failed to do so within the time limits and/or where it failed to serve a dissatisfaction notice within 14 days in respect of the Engineer’s determinations by which MESC’s three EOT applications were rejected. I am of this view because MESC was a willing party to the Contract including the 28 and 42 day notice requirements in Sub-Clause 20.1 which are important conditions precedent serving a significant function and Sub-Clause 3.5 by which MESC freely covenanted not to challenge an adverse determination if it did not challenge it within 14 days of its issuance. These provisions and their effect are stated in clear words. They admit of no scope for the postulated implied term or obligation of good faith. Accordingly, I can see no reason why the overriding principle of pacta sunt servanda should be circumscribed by the operation of these provisions in the Contract Law.

72. I come then to express my conclusion as to whether Gaymark ought to be followed and applied in this case. In my judgment, for the reasons expressed by Jackson J which are set out in paragraph 67 above, Gaymark ought not to be followed by the DIFC Courts. Instead, where a contractor has had the opportunity to apply for a EOT but failed to comply with a time requirement in the nature of a condition precedent /and or where a contractor has not served a notice of dissatisfaction in respect of an adverse determination by the Engineer within the 14 day time period stipulated in Sub-Clause 3.5, the delay in question in completing the Works will count against the contractor and the employer will be entitled to liquidated damages for such delay as provided for in the contract; a fortiori where, as here, the Engineer has rejected the EOT’s in question.

73. It follows that I find that Panther was entitled: (a) to terminate the Contract without notice pursuant to Sub-Clause 15 (2) (h) as it did on 6 November 2019 on the ground that the maximum amount of delay damages stated in the Appendix to Tender was exhausted; and (b) to liquidated delay damages under Sub-Clause 8.7 of the Contract up to that maximum in the sum of AED 4,181,153.

74. I turn to address Panther’s claim that it also lawfully terminated the Contract by reason of the following breaches of contract/wrongful conduct on the part of MESC.

The abandonment ground

75. MESC contends that that this ground must fail because: (a) MESC did not abandon the works but merely gave notice of a slow down of the rate of work; (b) Panther did not give 14 days’ notice of termination pursuant to Sub-Clause 16.2; (c) the termination letter does not explicitly refer to Sub-Clause 16.2 (k); and (d) there is no evidence that Panther concluded that the alleged abandonment was not remedial.

76. I decline to accept any of these contentions. The termination letter stated:

77. In my judgment, MESC would have well understood, and so would a reasonable person knowing the background to the letter of termination including Sub-Clause 15.2 and the events leading up to the issue of that letter, that Panther was terminating the Contract forthwith not only by reason of the maximum amount of delay damages having been exhausted but also on the ground that MESC had abandoned the Works and that Panther believed that this breach of contract was irremediable.

78. I am also well satisfied that from 3 November 2019, notwithstanding MESC’s attempt in its letter of 3 November 2019 to characterise what they were doing at the site as a mere reduction in the rate of work, in substance and on the ground MESC was taking steps to ensure that no work was done including the exclusion of others from gaining access such as subcontractors. I base this conclusion on the following testimony from Mr Rezk in paragraphs 49, 50 and 51 of his witness statement.

79. Mr Rezk was cross-examined on the termination letter but his evidence recorded above was not challenged.

80. Further, I find that the words: “This misconceived and unconscionable conduct leads Panther to believe that your abandonment of the Works and and/or your “intention not to continue performance of [your] obligations under the Contract” cannot be remedied” is amply sufficient to satisfy the requirement that Panther believed that the breach of contract constituted by the abandonment of the Works would not and therefore could not be remedied.

81. For these reasons I find that by the termination letter Panther lawfully terminated the Contract by reason of MESC’s abandonment of the Works.

The Anticipatory/Renunciatory Breach of specific Sub-Clauses ground

82. As I understand Panther’s argument, it is contended that the following wording in the termination letter: … “your [MESC’s] intention not to continue performance of [your] (MESC’s) obligations under the Contract … you have, without any contractual or legal justification whatsoever, ceased to attend the Site and instructed your subcontractors to do likewise… you have stated that that you would not seek to complete the inordinately delayed Works by 31 December 2019 unless Panther executed a document that you describe as MOU,” coupled with the statement “accordingly, we also write to inform you that Panther hereby terminates the Contract, with immediate effect and in accordance with the second paragraph of Sub-Clause 15.2 of the Contract, for these reasons,” constitutes the acceptance of an anticipatory breach of contract by MESC in the form of a renunciation of its obligations to perform under the Contract. In support of this contention Panther cites SK Shipping (S) Pte Ltd v Petroexport Ltd [2010 ] 2 Lloyd’s Rep 158 where Flaux J (as he then was) reviewed the leading authorities that set out where renunciation fits into the doctrine of anticipatory breach of contract. I gratefully accept and adopt what Flaux said in paragraphs [86] and [88] of his judgment:

83. In my judgment, the statement made by MESC at the meeting held on 27 October 2019 that if the MoU was not signed this would lead to more delays, the project would be open-ended, MESC would not be committed to any completion date and would be prepared to keep the project going for 10 years before completing it if necessary, followed by the service of its letter of 3 November 2019 announcing a slow down of the rate of work, clearly amounted to a renunciation by MESC of its contractual obligations under Sub-Clause 3 and 8.1 of the Contract in the nature of an anticipatory breach that was capable of being accepted at common law to bring the Contract to an end.

84. Does Sub-Clause 15.2 allow for termination of the Contract if there is a renunciation of an obligation under the Contract other than in the case of abandonment of the Works? In my judgment, the answer is “no”. In my opinion, none of the sub-paragraphs contained in Sub-Clause 15.2 connotes a renunciation of the Contract. Rather, they either contemplate an actual breach of a specified contractual obligation or they contemplate the occurrence of a specified state of affairs not amounting to renunciation. It follows that the termination letter did not terminate the Contract on the ground that MESC had renounced the Contract.

85. By Sub-Clause 1.4, the Contract is governed by the law of the DIFC and I think it appropriate that I go on to consider whether Panther successfully terminated the Contract for anticipatory breach under DIFC law. At the outset, it is important to appreciate that DIFC law does not include a body of “common law” resulting from a body of case law relating to contracts. Instead, the DIFC law of contract is exclusively contained in the DIFC Contract Law and whilst the decisions of common law courts, including in particular the courts of England and Wales, may be of guidance when interpreting the Contract Law, that is the true extent of the applicability of the common law of contracts developed in those courts to the law of the DIFC.

86. Article 86 (1) and (2)(d), Article 87 (1) and Article 88 (1) of the Contract Law provide:

87. The third paragraph of Sub-Clause 16 (2) of the Contract provides:

88. I have already held in paragraph 83 above that MESC renounced the contract. The question that must now be addressed is whether the termination letter was a good notice of termination under Article 87 (1) of the Contract Law as well as under Sub-Clause 15 (2) of the Contract.

89. I agree with Panther’s submission that the consequences of a termination under Sub-Clause 15.2 of the Contract and a termination under the Contract Law are not inconsistent or in conflict. It follows that Panther were not obliged to elect which type of termination they were going to exercise, but applying the reasoning of Leggatt J in Newland Shipping and Forwarding Ltd v Toba Trading FZC [2014] EWHC 661 (Comm) [50] – [54] relied on by MESC⁷ , which I adopt, I must decide whether s the termination letter makes it sufficiently clear that both rights of termination were being exercised? In my judgment, it did not. Instead, the letter was insistent that the Contract was being terminated pursuant to Sub-Clause 15 (2).

90. It follows that I find that Panther did not lawfully terminate the Contract for anticipatory breach of contract under Article 88 (1) of the Contract Law.

The legal right ground - acceptance of MESC’s repudiatory breach of the Contract under the Contract Law or at “common law”.

91. In my view, MESC’s stoppage of work in the period 3 – 6 November 2019 and its refusal to propose a new completion date was a fundamental non-performance of the Contract giving Panther the entitlement to terminate the Contract under Article 86 (1) of the Contract Law. In light of the reasoning of Leggatt J in Newland Shipping and Forwarding, which I accept, did the termination letter make it clear that Panther was terminating under Article 86 (1) as well as under Sub-Clause 15 (2)? As I have already held in paragraph 89 above, the only entitlement to terminate that was stated in the termination letter was the right under Sub-Clause 15 (2) of the Contract.

92. It follows that I find that Panther did not lawfully terminate the Contract for fundamental non-performance of the Contract under Article 88 (1) of the Contract Law.

Panther’s claim for general damages in addition to liquidated delay damages resulting from MESC’s culpable failure to complete the Works by 16 December 2018, including damages for the loss of the opportunity to rent or sell the residential units within the period of 16 December 2018 (the Completion Date) to 1 May 2020 (the actual completion date following the dismissal of MESC on 6 November 2019) for a better return than the return actually received in the course of and at completion more .

93. This claim requires Panther to prove that MESC was culpably responsible for the delay of 325 days in completing the Works and that such delay was the cause of Panther losing the opportunity to sell or rent the units when the sales and rental markets were more propitious than they were when sales and rentals were finally concluded. The failure to comply with the time requirements for making EOT applications and serving details of claims within 42 days and the covenant not to challenge the Engineer’s adverse determinations on the EOT applications unless a notice of dissatisfaction is served within 14 days are relevant only to Panther’s entitlement to liquidated damages down to termination of the Contract. They are not relevant to a claim for general damages resulting from alleged delay caused by MESC.

Are the liquidated delay damages provided for in Sub-Clause 8.7 of the Contract the sole remedy up to the stated maximum for all claims for losses alleged to have been caused by delay in the period from the Commencement Date down to the termination of the Contract?

94. Citing the Supreme Court’s decision in Triple Point Inc v PTT Public Co. Ltd [2021] UKSC 29, Panther accepts that its entitlement to liquidated delay damages runs to the point of termination of the Contract and extends no further. Panther goes on to submit that it is entitled to recover general damages on its captioned loss of opportunity claim in addition to the delay damages it is entitled under Sub-Clause 8.7 of the Contract on the basis that the loss in question is suffered post and not pre-termination. This entitlement, argues Panther, is subject only to deductions to avoid double recovery for pre-termination delay-related construction losses, other than those engineer and third party fees expressly provided for in the Contract; and for there to be a compensation overlap, argues Panther, the loss must result from “a breach of the relevant kind (typically delay in the performance of the contract)”,⁸ whereas in the instant case the repudiatory conduct of MESC that led to the termination of the Contract was a breach of a different order and kind⁹ to the delay giving rise to the entitlement to Delay Damages under Sub-Clause 8.7.

95. In advancing these submissions, Panther relies on the express stipulations in Sub-Clause 8.7 of the Contract that the delay damages “are strictly without prejudice to, and shall in no way preclude or restrict [Panther’s] entitlement to bring a general damages claim” and “the total amount due under this Sub-Clause shall not exceed the maximum amount of delay damages (if any) stated in the Appendix to Tender” [Emphasis supplied by Panther].

96. MESC submits that when Sub-Clause 8.7 is construed in the context of the Contract as a whole, liquidated delay damages up to the stated maximum are the sole remedy for delay occurring down to termination of the Contract and that the saved entitlement to claim general damages is limited to claims for breaches of contract other than delay or for delay occurring post termination.

97. I find this question of the construction of Sub-Clause 8.7 a difficult one. As has often been said, liquidated damages are designed to avoid what otherwise could be the difficult task of establishing the quantum of loss consequent on delay and they thereby confer a benefit on both parties. The purpose and function of the delay liquidated damages provided for Sub-Clause 8.7 therefore point strongly in favour of MESC’s construction of the Sub-Clause. On the other, the exclusionary words in Sub-Clause 8.7, “These [liquidated delay] damages … shall in no way preclude or restrict the Employer’s ability to bring a general damages claim” are of a general nature and accordingly support the construction contended for by Panther. In my opinion, Sub-Clause 8.7 is concerned with delays occurring pre-termination even though they may result in a loss that only crystallises post termination and after anxious consideration I have come to the conclusion that the exclusionary words, read in context, contemplate claims for loss that does not result from delay pre-termination and claims for loss that results from delay that occurred post termination.

98. It follows that I am not persuaded by Panther’s submissions that the exclusionary words permit a claim for loss suffered post termination that is the result of delay that occurred pre-termination and/or where the Contract is terminated on grounds other than for delay.

99. To prove its loss resulting from the claimed loss of opportunity to sell or rent the 112 units in East 40, Panther relies on the expert report of Mr Richard Paul, the head of professional services and consultancy for Savills Middle East. In his report, Mr Paul estimates Panther’s loss of revenue on a sales scenario and a rental scenario resulting from the delay in the period starting with the Original Completion Date in November.

100. In respect of the first scenario, Mr Paul estimates that, if there had been no delay in completing the Works, the revenue from sales that could have been achieved by November 2017 would have been AED 91,000,000, which stood to be compared with the revenue of AED 74,000,000 based on completed product pricing on the actual completion date in May 2020, giving a maximum loss of sales of AED 17,000,000.

101. In respect of the second scenario, Mr Paul first estimates what, if there had been no delay, would have been the initial 12 monthly rental on the original planned hand-over date in November 2018 and comes up with a figure of AED 5,616,998, assuming an occupancy rate/leasing up period consistent with the May 2020 performance completing the project. Mr Paul then compares this sum with the actual initial 12 month rental revenue of AED 4,502,731 achieved in May 2020 when the Works had been completed and concludes that on this scenario there is a maximum loss of rental revenue of AED 9,100,000.

102. Mr Paul’s scenarios depend vitally on the delays to the Works that occurred in the period from the Commencement Date of 11 July 2017 to 6 November 2019 when the Contract was terminated, during which period the delays complained of by Panther occurred. It therefore follows from the conclusions I have expressed in paragraphs 97 and 98 above that, even if the delays relied on by Panther were indeed caused by MESC and not Panther and even if Mr Paul’s reasoning is accepted, Panther has no sustainable claim for loss which, it alleges, has resulted from its lost opportunity to have sold or rented the East 40 units at more propitious time.

The evaluation of the evidence relating to the question whether MESC was culpably responsible for the delay in completing the Works as alleged by Panther.

103. My decision in paragraph 55 above that MESC was in breach of the notice requirements imposed by Sub-Clause 20.1 means that MESC cannot mount a claim for the prolongation costs in respect of the delay events in question by reason of the second paragraph of Sub-Clause 20.1.¹⁰ In case that decision turns out to be erroneous and in case my construction of Sub-Clause 8.7 is also be found to be erroneous, I propose to determine on the evidence whether the material delays to which the Project was subject were in fact caused by the acts and/or omissions of MESC as alleged by Panther, or were caused by the acts and/or omissions of Panther as alleged by MESC.

104. The expert evidence on delay proffered by Panther consisted of two reports produced by Mr Brian Allan, Managing Director of QSI Management Consultancy, which provides independent expert services in construction disputes. Mr Allan is a Chartered Quantity Surveyor with over 30 years’ experience of international construction projects acting on behalf of both Employers and Contractors. He is a Fellow of RICS, a Fellow of the Chartered Institute of Arbitrators and a RICS Registered Expert Witness. He also has a Master’s degree in International Construction Law.

Mr Allan’s first report dated 15 July 2021 (“BA-1”)

105. Mr Allan’s first report deals with delay and the evaluation of the quantum of the parties’ claims. Delay is not one of Mr Allan’s principal areas of expertise, but he is no stranger to issues of delay arising in construction projects. In matters of delay analysis, Mr Allan was assisted in the preparation of his report by Mr Dale Clark who has extensive experience in analysis methodologies in relation to delay and disruption claims and has been involved in multiple international construction projects, including for high rise buildings. It was Mr Clark who prepared the detailed delay analysis set out in Section 5 of the first report headed “The Defendant’s Delay Claims – Expert’s Opinion”.

106. In matters of quantum addressed in his first report, Mr Allan was assisted by Mr Alibert Seroy, an employee of QSI Management Consultancy who is a graduate in civil engineering with over 13 years’ experience in civil engineering and quantity surveying matters.

107. Mr Allan’s second report was produced in response to the first reports on quantum and delay produced by the expert witness called by MESC, Mr Rohit Singhal. Again, in matters of delay analysis, Mr Allan was assisted by Mr Clark and in matters of quantum he was assisted by Mr Alibert Seroy.

108. The approach taken in Section 5 of Mr Allan’s first report is to analyse the delay events relied on in each of MESC’s four EOTs and then to express a conclusionary expert opinion as to whether MESC was entitled to an extension of time where the Engineer had refused an extension. The delay events in question in respect of the first three EOT’s are identified in paragraphs 8, 9, 10 and 11 above. The delay event relied on in EOT No 4 is identified in paragraph 23 above. These events constitute 12 of the 14 Delay Events pleaded by MESC and analysed by Mr Singhal. Mr Allan goes on to deal separately with the two additional events pleaded by MESC – Delay in Receiving Demarcation Certificate and Late Nomination of ID Claimant - later in his report.

109. As Mr Allan explained when cross-examined, whilst the SCL Delay and Disruption Protocol¹¹ states, “Typically delay analysis requires the identification of the critical path to the completion date”, he and Mr Clark did not establish a single critical path running through the Project. He said that was made impossible because the P6 native files had not been disclosed. Thus, what was done was to look at each delay event relative to the closest contemporaneous updated programme in pdf form and to consider whether there appeared to be any critical path impact caused by the event at the time, or whether it was other events, either concurrent or predecessor that were in fact driving the delay.

110. I proceed to summarise what is said in Section 5 of Mr Allan’s report in respect of the four EOTs and the additional two delay events and in doing so I call the Claimant “Panther” and the Defendant “MESC”.

EOT No.1

EOT No. 2

EOT No. 3

EOT No. 4

Mr Singhal’s first report on delay dated 15 July 2021 (“RSD-1”)

111. Mr Singhal has a Bachelor of Engineering degree from the Indian Institute of Technology, Roorkee India. He is managing partner in Masin Projects, a consultancy which provides Contract and Claim Management Consultancy services to infrastructure and engineering sectors, worldwide. He has about 24 years’ experience in the construction and engineering industry in India and the regions of the Middle East. His specialist field is forensic delay and quantum analysis in construction.

112. The methodology adopted by Mr Singhal in producing his first report on delay is known as the “As-Planned versus As-Built Windows analysis” (“APvAB”) which analyses the effect and cause of delay retrospectively. Mr Singhal divided the period 11 July 2017 to 6 November 2019 into four “windows” to review the critical path/delays over this period. He considered the planned dates (start and finish) of activities shown in the Approved Baseline Programme. The duration of the delay is defined as the difference in planned and actual dates/duration of relevant activities. Mr Singhal also referred to the progress data recorded in the project’s primary records (eg MPR/WPR) in order to validate the actual dates of critical activities. He states that he did not use the programmes for extracting the critical path from its software files; rather he determined the critical path/critical delays in each window by common sense and practical analysis of the available facts using the last updated programme submitted by MESC to the Engineer as evidenced by MESC’s Work Progress Report (“WPR”) of that date. He proceeded to identify the Delay Events advanced by MESC and assessed their relation/effect on the critical path. He then assigned the delay events either to Panther or MESC as appropriate.

113. The four windows adopted by Mr Singhal were: Window 1 (11 July 2017 to 23 December 2017, a duration of 165 days covering the commencement of Superstructure Works). Window 2 (23 December 2017 to 31 December 2018), a duration of 373 days, covering completion of Superstructure works. Window 3 (31 December 2018 to 15 April 2019), 105 days covering completion of Block Work beyond the completion of Superstructure. Window 4 (15 April to 6 November 2019, 205 days, covering Completion of Aluminium works).

114. Mr Singhal decided that it was appropriate to adopt a retrospective method of analysis having regard to these words in the SCL Protocol:

115. The As-Built programme was not available, but the contemporaneous updated programmes were. These contain the As-Built data down to 4 November 2019 recorded in the contemporaneous updated programmes and the progress data recorded in these programmes was available for use in performing the required delay analysis.

116. Mr Singhal cites paragraph 11.5 (d) of the SCL Protocol

117. The Approved Baseline and its programme file on Primavera P6 Software used by Mr Singhal was MESC’s Revision 3 Baseline Programme that was approved by the Engineer on 25 December 2017. Mr Singhal states that he used this mainly to understand the planned sequence of activities and to extract the planned date of commencement and completion of project activities.

118. The basic steps by which Mr Singhal conducted his delay analysis were:

119. Mr Singhal’s reasoning and conclusions on how the delays besetting the Project should be attributed to Panther and MESC are based on: (a) a series of tables relating to each of the postulated four windows which set out by reference to the major works under progress during the period the following dates: Baseline Duration; Baseline Start; Baseline Finish; Actual Duration; Actual Start; Start Variance; Duration Variation; Finish Variation; and (b) his consideration of the following topics under the following headings that track the basic steps (b) – (e) set out above: (i) The As Built Critical Path; (ii) The Critical Delay in Particular Works; (iii) Observations on the reasons of delay; (iv) Opinion on critical delay in the Window;

Window 1 (11 July 2017 – 23 December 2017)

120. The major works: (i) Mobilization; (ii) Engineering; (iii) Procurement; and (iv) Substructure Work.

121. The major delays:

The As Built Critical Path

122. The delay in procurement of Firefighting and Plumbing materials was not critical in this Window as these materials would only be required once the Structure work reached Blockwork level, which was not planned until the end of the Window; and (b) the remaining delays led to a total delay of 7 days from 16 December 2017 to 23 December 2017.

Review of delay in Substructure Works (Earthwork and Concrete Foundation)

123. MESC had planned to commence and complete the Excavation work in the period 4 October 2017 to 13 November 2017. However, there was a delay of 17 days in completing this work which occurred on 30 November 2017. MESC had also planned to start and finish the Concrete Foundation work in the period 13 November 2017 to 16 December 2017 but there was a delay in completion of 5 days. The Baseline Programme contemplated the Earthwork and Concrete Foundation works being executed sequentially but in fact the work was executed in parallel, which led to a mitigation of 12 days delay, so that the net delay in respect of the Substructure Works was 5 days.

Critical delay in the Substructure Works

124. These works were planned to commence from 4 October 2017 and to complete on 16 December 2017 (a total of 74 days). As per the Baseline Programme, the Substructure works would be on the critical path commencing on the planned start date but completing with a delay of 5 days on 21 December 2017, instead of 16 December 2017 as planned. The Superstructure Works were planned to commence when the Substructure Works were finished but they started with a delay of 2 days, so that the total delay of 7 days in Window 1 was being “guided” by the critical delay in execution of the Substructure Works which led to the delay in the start of the Superstructure Works.

Observations on reasons of delay

125. The progress of the Substructure works may have been impacted by the following delay events pleaded by MESC: (i) DE-02 – Delay in Receipt of Civil & MEP IFC Drawings (107 days from 11 July 2017 to 26 October 2017; and (ii) DE-03: Delay due to Etisalat/DU cable inside the Plot limit (delay of 34 days from 8 October 2017 to 11 November 2017).

Opinion on Critical Delay

126. The delay in completion of the Substructure Works of 5 days was beyond the control of MESC because executing or completing the Excavation Works to their full depth or below the water table depended on MESC having the IFC Drawings. However, the available records did not disclose any reason for the 2 day delay to the start of the Superstructure Works. The 5 of the 7 days of critical delay in Window 1 should therefore be assigned to MESC and the remaining 2 days assigned to Panther.

Window 2 – 23 December 2017 to 31 December 2018

127. Based on a comparison of planned and actual dates of the major activities undertaken in this window, the major delays in Window 2 are:

The As-Built Critical Path

128. In a typical high-rise multi-story building Project, the critical path of construction passes through the erection of the Superstructure, as the commencement of Superstructure work for any floor is dependent on the completion of Superstructure works of the floor just below. When the structure works at higher levels are in progress, the non-structural works such as Blockwork, Plastering, MEP and Fit out etc could be commenced at lower levels provided that the structural works in a few higher floors have already been completed to provide sufficient work front. Accordingly, these non-structural works could be expected to follow the progress of the structural works (with a lag of a few levels) as the sufficient work front would be always available. Therefore, in a typical high-rise construction programme, the structural work is expected to remain on the critical path until the entire structural work is completed. The critical path may change only if there is very significant delay in the non-structural works such as Blockwork, Plastering, MEP or fit out works.

129. As per the Baseline Programme, the Superstructure works were critical until the Roof Floor, while other works were planned to commence when the structural work was at various stages of completion. The critical path to the overall completion of the works may shift from the structural works to other work which would apply in the scenario under consideration if the progress of Finish and MEP works fell far enough behind the progress of the structural works.

130. The comparison of the planned and actual dates of the major activities shows that the delays in Superstructure works followed by delays in the Blockworks were substantial when compared to other works including Plastering, MEP and Finishing works. It follows that the delay of 156 days in the Superstructure works was critical for the progress of the works in Window 2, whereas the delays to other works were non-critical.

Critical Delay in Superstructure Works

131. The Superstructure works were planned to start after 74 days from the commencement of the Substructure works, i.e. from 16 December 2017 and finally completing the Roof floor slab a further 224 days later, i.e. by 28 July 2018. However, the Superstructure works actually commenced on 23 December 2017 and were recorded as completed on 31 December 2018, after a duration of 149 days. Whilst the delay in commencement of the Superstructure works 7 days, the completion of those works in the ground floor was delayed by a further 28 days. The total delay in Superstructure works is therefore 156 days i.e. from 28 July 2018 to 31 December 2018; and accordingly the critical delay in Window 2 is 149 days after the adjustment of seven days of delay in commencement of superstructure already covered in Window 1.

The reasons for the delay

132. The following Delay Events listed in Mr Singhal’s first report may have made an impact on the progress of the Superstructure works:

133. The receipt of the approved post tensioning drawing for the podium slab, which was essential for casting the roof slab for the ground floor, was delayed by 34 days down to 28 January 2018 (DE-04). Therefore, MESC would not have been in the position to undertake the roof slab casting for the ground floor. In view of the fact that the planned duration for roof slab casting of the ground floor was 10 days, the actual completion of the Superstructure works for the ground floor, including its roof slab on 12 February 2018 (i.e. within 14 days from receipt of the post tensioning drawings for the podium slab) is reasonable. Therefore, the delay of 26 days in completion of the Superstructure works for the ground floor would have been beyond MESC’s control.

134. The issuance of the typical post tensioning drawing for the other floors was also delayed by 19 days until 28 March 2018. Therefore, on this account, and other delays already mentioned, a further delay of 22 days (50 days – 28 days) to Superstructure works in the 10th floor is also reasonable and might be beyond the defendants control.

135. There were delays in finalisation of the structural design of the 12th floor and Roof by 113 days and 106 days respectively which prevented MESC from undertaking the Superstructure works for the 11th floor’s roof slab, 12th Floor and Roof. Therefore, the total delay of 149 days (99 days beyond 50 days of delays until the 10th floor) of additional delay in completion of superstructure works until the roof slab (level one) would have been beyond MESC’s control

Opinion on Critical Delays in Window 2

136. The planned Superstructure works were to take 225 days. The actual Superstructure works took 374 days. There were 156 days’ delay in completion of the Superstructure works. Therefore, the net critical delay was 149 days in duration of the execution of the Superstructure work (156 days – 7 days) = 149 days.

137. The above-mentioned delay events might have restricted MESC from executing or completing the Superstructure works that were on the critical path to completion of the Project, which led to the critical delay of 149 days which might have been beyond MESC’s control. Therefore, the conclusion is that there were 149 days of critical delay in respect of completion of the Superstructure works which, delay is to be assigned to Panther.

Window 3 – 31 December 2018 to 15 April 2019

138. Based on a comparison of planned and actual dates of the major activities undertaken in this window, the major delays in Window 3 are:

As Built Critical Path in Window 3

139. In the Baseline Programme, the completion of the Blockwork was linked to commencement of the majority of the subsequent MEP and Finish works. Therefore, any delay in Blockworks would have affected these works. Hence the Blockworks may be considered to be critical immediately after completion of the Superstructure works.

Delay in Blockworks: Critical Delay

140. The planned commencement of the Blockworks was from 12 March 2018, 80 days from 23 December 2017 (the date of commencement of the Superstructure works) and were to complete in 154 days on 13 August 2018. Since the planned completion of the Blockworks lies within Window 2 in which the delays in those works were sub-critical to the delays in Superstructure works, the further critical delays in completion of the Blockworks beyond completion of the Superstructure in each floor were analysed. This showed that beyond the critical delays of 156 days in the Superstructure works captured in Window 2, the Blockworks were critically delayed by a further 89 days (total delay of 245 days).

Observations on reasons for delay

141. Delay Event DE-12 (Delay in Final Architectural and Structural Layout for Roof) affected and impacted the progress of the Blockworks in the Roof.

142. The chronology of events is as follows:

143. The delay of 228 days is associated with DE-12 (Receipt of Architectural Drawing for Roof) and therefore the delay of 228 days out of 245 days (with remaining delay of 17 days) might be beyond MESC’s control.

144. The completion of the Blockwork in Roof Floor was planned to be achieved in 92 days from the approval of corresponding shop drawings. However, the completion of this work was achieved in 109 days from the first approval of the shop drawing on 27 December 2018. The delay beyond the planned date is therefore 17 days. It follows that this delay may be attributable to Panther.

Opinion on critical delay in Window 3

145. There was a net Critical Delay of 89 days in the execution of the Blockworks (105 days – 16 days = 89 days). 72 days of this delay should be assigned to Panther; 17 days to MESC.

Window 4 – 15 April 2019 to 6 November 2019

146. The major works in this Window:

As Built Critical Path in Window 4

147. Multiple construction activities were delayed and remained incomplete on 6 November 2019, the effective date of termination of the Contract. Five items of work with high planned budgets were selected and their remaining duration was estimated as follows:

Remaining Duration of Electrical Work – 7% of 193 = 14 days

Remaining Duration of Plumbing Work – 6% of 294 = 18 days

Remaining Duration of HVAC Work – 9% of 190 = 17 days

Remaining Duration of Aluminium Work – 12% of 164 = 20 days

Remaining Duration of External & Common Work – 2% of 107 = 2 days

148. The Aluminium works were one of the highest budgeted items that remained pending on 6 November 2019 and had the highest remaining duration.

Aluminium Works in Window 4 – Critical Delay

149. According to the Baseline Programme, the Aluminium Works consisted of:

153. The only part of the Aluminium works that were pending on 6 November 2019 when the Contract was effectively terminated was the Aluminium Balcony Railing & Balustrade works, the other works having been completed by 7 October 2019. Accordingly, having regard to the foregoing, the Aluminium Balcony Railing & Balustrade works (as part of the Aluminium works) can be considered on the As Built Critical Path in Window 4.

150. In accordance with the Baseline logic, the Aluminium Works were to commence upon the completion of the Tiling works. The Aluminium Works were planned to commence from 14 April 2018, 7 days after the commencement of the Tiling works and finally to complete on the 12th floor 197 days later i.e. by 28 October 2018.

151. Since the planned completion of the Blockworks lies within Window 2, wherein the delays in the Aluminium works were sub-critical to the delays in the Superstructure works, in this Window the further critical delays in the completion of the Aluminium works beyond the completion of the Blockworks in each floor have been analysed.

152. The delay in the Aluminium works is 374 days and since down to Window 3 the cumulative critical delay was 245 days, the further delay in Aluminium works is 129 days over the critical delays in the Superstructure and Blockworks in the previous windows.

153. The only part of the Aluminium works that were pending on 6 November 2019 when the Contract was effectively terminated was the Aluminium Balcony Railing & Balustrade works, the other works having been completed by 7 October 2019. Accordingly, having regard to the foregoing, the Aluminium Balcony Railing & Balustrade works (as part of the Aluminium works) can be considered on the As Built Critical Path in Window 4.

Observations on the reasons for delay.

154. The following delays both pleaded and identified by Mr Singhal might have impacted the progress of the various works in Window 4:

155. The last notified delay event that was the last to cease was “Delay in Finalization of Glass Balustrade Design”. In EOT No. 4, MESC requested an extension of four months. The substantiation of this request is not to hand but it is understood that this work would have required the following works:

156. Mr Singhal states that in his opinion the critical delay in completion of the Aluminium works in Window 4 would not have been in the control of MESC because it was the late finalization of the balustrade design that caused MESC not to be in a position overall to complete the Works on the effective date of termination of the Contract.

Opinion on the critical delay in Window 4

157. In accordance with the Baseline Programme, the overall Project was to be finished within 125 days from the completion of the Blockworks, and many activities such as MEP, Plaster and Finish works remained in progress even after 205 days from the completion of the Blockworks down to 6 November 2019. During this period, the Aluminium works were the critical activity.

158. It follows that the critical delay in Window 4 is 80 days (205 days -125 days = 80 days) which is in addition to the critical delays of 245 days as recorded above in the previous Windows until actual completion of the Blockworks.

159. On the basis of the foregoing, Mr Singhal is of the opinion that there was a critical delay in respect of the Completion of the Aluminium works until termination of the Contract of 80 days that should be assigned to Panther.

Overall Conclusion on Delay

160. There was a delay of 325 days in the completion of the overall project of which 306 days are to be assigned to Panther and 19 days assigned to MESC.

Mr Allan’s Supplemental Report dated 15 August 2021 (“BA-2”)

161. Mr Allan’s Supplemental Report responds principally to RSD-1. Mr Allan concludes that, “in view of the apparent discrepancies and inconsistencies within Mr. Singhal’s Report on Delay, as identified within this Supplemental Expert Report, I am not convinced of any of the findings of Mr. Singhal’s report”. Therefore, his opinion remained as stated in his first expert report dated 15 July 2021.

162. First, I set out below what I consider to be Mr Allan’s main points by reference to the paragraphs in BA-2 shown in bold. The other (non-bold) paragraphs referred to are paragraphs in RSD-1.

Window 1

Paragraphs 3.3.5 – 3.3.9

Window 2

Paragraphs 3.3.10 – 3.3.12

Paragraphs 3.3.13

Paragraph 3.3.14

Paragraph 3.3.15

Paragraphs 3.3.16 – 3.3.19

Paragraphs 3.3.20 – 3.3.22

Window 3

Paragraph 3.3.24

Paragraphs 3.2.25 – 3.2. 29

Window 4

Paragraph 3.3.31- 3.3.33

Paragraph 3.3.34 – 3.3.36

Paragraph 3.3.37

Paragraphs 3.3.38 – 3.3.41

Paragraphs 3.3.42 -3.3.43

Paragraphs 3.3.45 – 3.3.49

Mr Singhal’s Supplemental Report on delay dated 22 August 2021 in response to Mr Allan’s first report on Delay (“RSD-2”)

163. In this report, where in his report Mr Allan’s critical remarks refer to the use of TIA methodology, Mr Singhal hereinafter (“RS”) gives the result of a TIA analysis he conducted of the delay event in question using P6 Native copies of the relevant programmes. Mr Singhal also responds to the reasoning and conclusions of Mr Allan (“BA”) given in respect of each pleaded delay event.

DE-01 Delay in Receiving Demarcation Certificate.

164. RS and BA agree that this had no impact on the Project Completion Date.

DE-02 Delay in Receipt of Civil & MEP Drawings.

165. BA concluded there should be an EOT of 74 days. RS carried out a TIA which found that the impact of DE01 was 76 days. RS disagrees with BA’s view there should be no prolongation costs.

DE-03 – Delay due to Etisalat/DU Cable Inside The Plot Limit

166. DA’s statement in para 5.2.40 that the actual date of completion of impacted activity CSB 1000E – (Site Full Depth Excavations Below Water Table and Dewatering) is 19-Oct-17 is incorrect. The correct actual finish date is 11-Nov-17 as recorded in the Updated Program dated 02-Jan-18. The impacted activity was actually being guided by DE-03 and did not complete beforehand on 19-Oct-17 as assumed by BA.

167. RS carried out a TIA in respect of this Delay Event that showed that the impact of DE0-3 is 31 days.

DE-04 – Delay Due To Post Tension Drawings For Podium Slab

168. BA concluded that the impact of this Delay Event was nil. RS tested this conclusion by carrying out a TIA which showed that the impact was also nil.

DE-05- Delay Due To Issuance Of Post Tension Drawings For Typical Floor Slabs

169. BA concluded that a TIA was the correct methodology for assessing the impact of this Delay Event and decided that, based on the data contained in the updated programme dated 2 January 2018, the impact would be nil. RS executed a TIA analysis on Updated Programme dated 6 March 2018 and found that the impact of DE-05 was 14 days.

DE-06 – Delay In Finalization Of Balcony Glass Balustrade Design

170. In para 5.2.231, BA refers to a screenshot that appears to provide the actual date for finalisation of the balustrade design as 14 August 2019. However, he is referring to his Figure 40 which provides the actual date for “approval of Tubular Aluminium Railings: Balcony Material” and not approval for finalization of the balustrade design. Similarly, in paras 5.2.234 and 2.2.235, BA refers to a screen shot that seems to provide the actual completion date for submittal of balustrade: Balcony Material as at 01 July 2019, whereas RS understands that BA is referring to Figure 40 that provides the actual date for “submittal of Tubular Aluminium Railing: Balcony Material and not the actual date for Shop Drawings of Balustrade Design.

171. Also it is to be noted from the transmittal log of MESC from 17 September 2018 to 2 June 2019, that MESC had already submitted several revisions of shop drawings for the glass balustrade, of which the engineer had approved three revisions, but later requested resubmission. This confirms the indecisiveness of the engineer towards finalisation of balustrade design.

172. Further, RS executed a TIA analysis on the Updated Programme dated 10 April 2018 and found that the critical impact of this Delay Event was 335 days.

DE-07: Delay In Approval Of False Ceiling Design

173. BA relies on the fact that MESC proceeded on the basis that the false ceiling drawings were considered by MESC on 24 June 2018. In fact, the false ceiling drawings were initially planned to be approved from 30 January 2018 to 18 April 2018, but in its EOT No. 3, MESC took the start date of this event from 24 June 2018. However, forward shifting of a start date of any delay event will not have any effect on the results of an IAP/TIA analysis as the results are driven by the end date of delay events.

174. RS conducted a TIA analysis on DE07 which showed a delay with individual impact by Panther of 98 days.

DE-08-Delay In The Finalisation Of 12 Floor Structural Design.

175. In drawing the conclusion in para 5.2.169 that the finalization of structural design did not impact submission and approval of the structural shop drawings or delay the casting of the 11th floor roof slab, BA has completely neglected the chronology of events after 3 April 2018 as captured in paras 60 – 63 of Annexure 4 of RS’s first report (“RS1”). Further, it is evident from the table under para 112 of RS1 that the delay in casting slabs up to Floor 11 was in the range of 50 days (finishing on 14 August 2018) but then suddenly increased to a delay of 123 days in respect of Floor 12 (finishing on 8 November 2018) which confirms that BA’s opinions expressed in paras 5.2.170, 5.2.171 and 5.3.9 are not in accordance with the facts.

176. RS conducted a TIA analysis in respect of DE-08 which showed that this event was delayed by Panther with individual impact of 40 days.

DE09 - Delay In The Finalisation Of 12th Floor Architectural Design.

177. In para 5.2.176, Mr Allan’s reference to activity ID ESTABP030 (Approval of Block Work and Plaster Details Shop Drawings @ Floor 1 to Floor 12) is incorrect in respect of this delay event. This is because, in the Baseline/Updated programme, this typical drawing activity is linked with Activity ID CCWBW.1F.025 (Block Work and Lintels 1F) which is for 1st floor and not 12th Floor. Further, this delay event ceased on 15 January 2019 followed by the approval of MESC’s Rev.4 of 12th Floor Block Drawings (SD-088) on 7 February 2019 and the completion of the 12th Floor Block on 20 February 2019. Mr Allan’s attempt to correlate activity ESTABP030 (Approval of Block Work and Plaster Details Shop drawings @ Floor 1 to Floor 12) and activity ESTSCD040 (submission of the Post Tensioning Details Shop Drawing at Roof) to prove nil impact of this delay event is illogical.

178. RS conducted a TIA analysis on this delay event and found that it caused a delay by Panther with individual impact of 77 days.

DE-10: Delay In Final Architectural And Structural Layout For Roof

179. Mr Singhal makes the following points in challenging the logic of Mr Allan’s conclusion in paras 5.2.200 to 5.2.205 that MESC was not entitled to an EOT for this delay event.

DE-11: Delay In The Issuance Of Revised Kitchen Layout Drawings.

180. RS points out that, in concluding that MESC is not entitled to an EOT for this delay event, Mr Allan has neglected to note that, as claimed by MESC in its EOT No. 3 claim, the approval of the Shop Drawing for Kitchen Cabinet was finalised only on 27 December 2018, as is clear from the Drawing Transmittal Log and, whilst the programme logic does not record Kitchen Drawings as a predecessor activity to installation of LPG, logically this latter activity is indeed a predecessor activity as claimed by MESC in its EOT No. 3 claim.

181. Mr Allan was also mistaken in suggesting that the delay in LPG Material caused the delay in the installation of the LPG System. The snapshot under Figure 21 in BA-1 shows that the actual start of the delivery of LPG Material was on 1 October 2018, which confirms that the delivery of materials had started well before the finalization of Kitchen Cabinet Drawings.

182. Mr Singhal conducted a TIA analysis of this delay event which showed a Claimant’s delay with individual impact of 98 days.

DE-12: Delay In The Finalisation Of The 12th Floor Pool Deck And Finishes Layout.

183. RS makes the following points.

DE-13: Delay In Receipt Of Gym Design

184. RS makes the following points.

DE-14: Delay Due To Late Nomination of ID Subcontractor.

185. For the following reasons, RS disagrees with Mr Allan’s statement in para 5.2.249 that “Activity ID ESTAO500 - Approval of Gymnasium Shop Drawings and PRMTD500 - Order and 1st Delivery of Gymnasium Material” has no successor activities. Therefore, any delay in appointing the ID Works Subcontractor for the Gym would not have any impact on MESC‘s work activities or the Project Completion Date.”

186. Activity IDCMPEL.12.018 (2nd fix: Wiring, Cables and DB’s 12 F and Gymnasium) has a logical connection with the receipt of the Gym Design, which activity is only possible after the appointment of the ID Subcontractor. However, if DE-13 is already being accounted for, no separate impact assessment of DE-13 is required. However, since the impacted activity of this delay event DE-14 and DE-13 is the same and the finish date of DE-13 is the later of the two, there is no additional impact of DE-14 beyond DE-13. Thus, it is to be inferred that both experts have the same view that no critical delay resulted due to DE 14.

Delay Due To Late Request For Change In Lift Supplier.

187. RS is of the view that this delay event is not just limited to the issue pertaining to the temporary instruction hold on the casting of corewall and vertical columns for ground floor but is about the impact of change in the lift supplier. RS therefore considers different dates from those advanced by MESC in its EOT No. 1. These dates were 2 January 2018 to 1 February 2018. RS is therefore of the view that the appropriate successor of the delay event should be activity IDEPRAD350 (Approval of Conveying System – Elevator Sub Defendant(sic) [Contractor]) instead of MESC’s selected activity cast vertical RCC Cornwall, columns for GF. RS executed an alternate TIA analysis and found the critical impact of this delay is 31 days.

188. Late approval driven by late submission of MESC drawings. Engineer and Trakhees approval in good time. No impact on 1st to 10th floor in any event. The IFC drawing delay was 2.5 months, whereas the delay to these drawings was 3.5 months.

Mr Allan’s Presentation on Delay provided during the trial.

189. Commenting on RS’s analysis, BA states that RS does not rely on any of the contemporaneous programme updates and that RS “[but] … only [on] the baseline and a previously unseen ‘as-built’ data date (d.d.) 4-Nov-19 [Actual d.d.7-Nov-19] 1 day after termination)… The RS critical path is clearly wrong in my view when compared with the available P6 format programme updates post 30-Oct-18. Therefore I consider that he has impacted delays to a false critical path.”

190. BA also notes that (a) RS makes the unsupported assumption that the critical delays have been caused by some of the delay events arising in the window; (b) RS was apparently provided with copies of all of MESC’s contemporaneously updated programmes in P6 format to prepare his TIAs referred to in his supplemental report, which still had not been made available to him (BA); (c) RS had utilised the contemporaneous updates to create new updates which could not be verified as no detail was provided and the contemporaneous update P6 files were not available; (d) RS has created his own 26-Dec-17 update as the basis for delay event Late Request for Change in Lift Supplier showing a completion date of 31-Mar-19 when the actual programme updates of 16-Dec-17 and 2-Jan-18 show Project Completion Dates of 16-Dec-18 and 9-Feb-19 respectively; (e) RS used the same programme update for Delay Events Nos. 8 – 13.

191. BA also addressed criticisms of his evidence made by RS that appeared in MESC’s opening skeleton argument as follows:

DE-01 Civil IFC drawings and Delay due to Etisalat/DU cable (DE03 aka DE02)

Civil IFC drawings were received on 12-Oct-17 not 26-Oct-17 (MEP IFC drawings).

My analysis based on the contemporaneous programme updates clearly showed the excavation work extended but successor preparatory concrete works were on schedule until Blockworks (Dead Shutter), therefore no delay by Etisalat/DU cable.

DE-04 (aka DE03) - Issuance of post tension drawings for podium slab

Late approval driven by late submission of MESC drawings. Engineer and Trakhees approval in good time.

DE-05 - Post tension drawings for typical floor slab

Late approval driven by late submission of MESC drawings. Engineer and Trakhees approval in good time. No impact on 1st to 10th floor in any event. The IFC drawing delay was 2.5 months, whereas the delay to these drawings was 3.5 months.

DE-18 - Casting level 05 slab due to late Trakhees inspection

New event introduced by RS. No analysis of delay impact by either MESC or RS.

DE-19 - Rupture of DEWA water pipeline

New event introduced by RS. No analysis of delay impact by either MESC or RS.

DE-08 - Finalization of 12th floor structural design

Delays caused by MESC’s PT subcontractor and lack of reinforcing steel on site delayed casting the 12th floor slab and successor concrete works. MESC skeleton refers to a 133 days period for MESC to submit drawings post design approval. Assumed to be between approval of shop drawing detail floor 1 to floor 12 on 11-Feb-18 until the planned late start of casting the 11th floor roof slab on 24-Jun-18. This is essentially float that was used up by MESC by submitting the Post Tension drawings for the 11th floor roof late.

DE-12 - Final architectural and structural layout for roof

Structural:

Delays were caused by MESC’s PT subcontractor in casting the roof slab. At paragraph 3.3.22 of my Supplemental report I noted that as per the updated programme the 12th floor slab was cast on 8-Nov-18. Further MESC noted that the post tensioning drawings for the roof were being submitted ‘today’ (meeting held on 31-Oct-18). Indicating that there would also be a MESC/Post Tension subcontractor delay to the roof.

Architectural:

Paragraph 5.2.204 of my Expert Report; update with d.d. 27-Nov-18 showed that the affected activity ID CCWBW.RF.025 - Block Works and Lintels for Roof Floor - was still unable to commence until 21-Jan-19 as predecessor activities, most notably the roof slab, were not Projected to commence till early January 2019. The Roof slab casting delay and 11th floor roof slab, as noted previously, were due to late submissions by MESC and its Post Tensioning Subcontractor. After drawings approved and slab complete it took 42 days for MESC to start the works, and then 2 months to complete a planned 4-day activity. RS has presented only one (1) delay event to blockwork, that being Delay Event DE-12 (Delay in Final Architectural and Structural Layout for Roof). The table at paragraph 131 shows blockwork delays at almost every level.

DE-06 - Finalization of glass balustrade design

The delay was due to MESC non-payment of the subcontractor, not addressing the mock-up issues or live and wind loads timely. I reviewed the contemporaneous programme updates to come to my conclusion that RS’s critical path was wrong and that the Balustrade works were not on the critical path. RS’ determination of Aluminium Balcony Balustrade being the critical delay event in Window 4 based on cost and remaining duration was also in error in my view.

Mr Singhal’s presentation on delay

192. The principal points made in Mr Singhal’s presentation were as follows:

Discussion and decision as to which if any of the experts’ evidence on delay the Court should accept.

The missing P6 Native files

193. To begin with I must deal with Panther’s submission that the failure by MESC to produce as ordered by the Court the P6 Native files relating to the updated contemporaneous programmes for the period from 11 July 2017 to October 2019 should result in the wholesale rejection of MESC’s expert evidence on delay. These files showed the logic relationship between the data in the succession of pdf copies of the updated programmes. The failure to provide these files was a failure by MESC, not Mr Singhal, who only became aware that Mr Allan and Mr Clark did not have the missing P6 files on receiving Mr Allan’s first report on 15 July 2021. The files were within the class of the documents that the Court ordered on 23 May 2021 to be produced by 6 June 2021 and a second order was made on 24 June 2021 for the production of the relevant class of documents to be produced within 7 days.

194. Although Mr Allan said in evidence that the missing files were not attached to Mr Singhal’s second report, Mr Singhal’s evidence that these files were provided to MESC at the same time as his second report was served on 22 August 2021 and this evidence was not challenged in cross-examination. In any event, it is clear that Mr Allan did not have the missing files when he and Mr Clark wrote and delivered both expert reports and it seems from an email from Panther’s solicitors to MESC’s solicitors on the day the trial began that the P6 files that were available on or shortly after 22 August 2021 were unreadable.

195. Mr Allan testified on Day 2 of the trial that he had been constrained by not having the files when he participated in the preparation of his reports. He said: “It remains even to this day impossible for me to conduct a full time impact analysis for the core events that are relied on because I am still not in possession of the P6 native format programmes prior to October 2018. Neither provided in document disclosure nor otherwise but apparently made available to Mr Singhal for his supplemental report, albeit he has not provided them as evidence in an attachment to his report.”

196. Mr Allan also pointed out that all but one of the pleaded delay events originated prior to October 2018, although, as Mr Singhal said more than once in the course of his evidence, the files from October 2018 covered the delay event that was responsible for the greatest period of delay, namely DE-06 – Delay in Finalization of Glass Balustrade Design.

197. It is notable in my view that from the outset, notwithstanding the potential significance the P6 files had for the report on delay, Mr Allan did not request the lawyers acting for Panther to insist on the provision of these files because of their direct relevance to the delays that had beset the project. Instead, without seeking confirmation as to the position, Mr Allan concluded that he and Mr Clark would get on with producing the first report without the assistance of the files. This may have been because he assumed that if he did not have the files, Mr Singhal would also be without the files, but he could not and ought not to have been sure about that given that the files had plainly been used in producing the updated programmes and he had those covering the period from 30 October 2018 to 28 October 2019.

198. Once the missing files were available from 22 August 2021, given his insistence that it had been impossible for him to conduct a full time impact analysis for the core events without the P6 files, I would have expected Mr Allan to urge Panther’s solicitors to obtain the files and upon discovering that the files made available were unreadable to have raised this on an urgent basis with the Court.

199. Mr Singhal testified that he studied the P6 files provided to him (which Panther submits would have included the programme updates with data dates of 26 December 2017, 6 March 2018, 10 April 2018, 10 June 2018 and 26 June 2018). Mr Singhal stated that he did this as part of a preliminary assessment of the information available which revealed that the files contained mistakes which caused him to decide to make no further use of them in preparing his first report on delay. Not having taken possession of the files and studied them, Panther was not in a position to challenge this evidence that the files contained numerous mistakes, but I think it highly unlikely that this evidence was false or otherwise unreliable.

200. In these circumstances, I have concluded the Mr Singhal’s expert evidence should not be excluded. Panther had the opportunity to raise the unavailability of the missing P6 files when Mr Allan and Mr Clark began working on the first delay report and no urgent protest was raised after the copies of the files that were made available on 22 August 2021were discovered to be unreadable. Instead, the decision was made to continue to rely on the two reports that had been served whilst at the same time complaining about MESC’s failure to produce the files.

201. That said, MESC is in clear breach of the Court’s orders to produce “all documents … evidencing or relating to requests and responses to requests for extensions of time including without limitation requests made in accordance with Sub-Clause 8.13 of the Contract containing the minimum time impact analysis elements stipulated in Sub-Clause 8.13(a) to 8.13(h)….” (Request 2.a); and “all documents … evidencing or relating to the delay of 292 days alleged against the Claimant in the Counterclaim” (Request 3). I agree with and accept Panther’s contention in paragraph 69 k of its Closing Submissions that it cannot be plausibly contended that these Requests do not encompass the P6 programmes (see paragraphs 1 to 3 of the Schedule of Reasons to the Order dated 24 June 2021, 2120 to 2122; and the Claimant’s Rejoinder to the Defendant’s Response to Requests 2(a) and 3 in the Redfern Schedule at 2028 to 2030, which makes explicit reference to the need to produce documents furnished to the Defendant’s expert.

202. The sanction I impose in respect of MESC’s failure to produce the relevant P6 files is: (1) MESC is debarred from seeking the costs of Mr Singhal’s expert evidence on delay including his two reports and his prepared statement on that subject, and his attendance to give oral evidence thereon, even if MESC would otherwise be entitled to recover those costs; (2) MESC must pay the costs incurred by Panther in respect of Mr Allan’s reports on delay.

Assessing the expert evidence on delay on its merits.

203. I say at once that I prefer and accept the evidence of Mr Singhal given in his first report and in support thereof in his oral testimony on the critical delays affecting the completion of the project in the period 11 July 2017 to 6 November 2019. As related in paragraph 112 above, since the Contract had terminated on 6 November 2019, Mr Singhal conducted a retrospective APvAB analysis in accordance with the SLC Protocol to determine the extent of the delays on the critical path of the project and to which party these delays should be assigned. In my judgment this was clearly the most appropriate course to adopt in reporting on the extent of the critical delays and to which party they should be assigned.

204. It follows that, in my judgment, the expert evidence presented in BA 1, on the other hand, was significantly less reliable than Mr Singhal’s evidence because Mr Allan and Mr Clark did not conduct any independent analysis to verify what was the correct critical path but instead considered the pleaded delay events in the light of the contemporaneous updated programmes (“the CUPs”) which, even without the benefit of having the P6 Native files, could be seen to be in some significant respects unreliable, as was recognised in the following answers made by Mr Allan to the following questions that were put to him in the course of his cross-examination:

205. In my view, in these circumstances, Messrs Clark and Allan ought to have conducted an APvAB analysis as recommended in the SCL Protocol (see paragraphs 114¹² and 116¹³ above).

206. I reject Panther’s submission that Mr Singhal manipulated unexplained, selective data to bolster MESC’s case and that this, together with attacking the methodology and conclusions of Mr Allan, was “apt to mislead the Court and, quite apart from falling short of his duty as an expert to the Court, is wholly unreliable”. In my judgment, at all times, Mr Singhal conducted his APvAB analysis in accordance with the SCL Protocol in an entirely proper manner.

207. Amongst the other matters that have persuaded me to accept Mr Singhal’s expert evidence in preference to that of Mr Allan are the following:

208. In short, I accept the conclusion of Mr Singhal that the critical delays that occurred during the currency of the Project in the period 11 July 2017 to 6 November 2019 totalled 325 days, 306 of which were to be assigned to Panther and 19 assigned to MESC.

209. It follows that, even if Panther’s claims for the lost opportunity to sell or rent the units for a higher return than was achieved by reason of MESC’s culpable delay in completing the Project, or for damages for loss resulting from delay (other than for the additional cost of completing the Project beyond what it would have cost if there had been no termination of the Contract) were permitted under the terms of the Contract, these claims would fail on the ground that Panther has failed to establish that the delays it pleads were the result of breaches of the Contract committed by MESC.

The damages recoverable by Panther

210. In my view, Panther is entitled to recover (i) liquidated delay damages up to the contractual maximum of such damages; (ii) damages for those losses that arose from breaches of the Contract that occurred prior to or after termination of the Contract that were not delay related such as the cost of rectifying defective work and dealing with the failure of MESC to vacate the site in breach of Sub-Clause 15.2 of the Contract; (iii) damages in respect of the additional costs of completing the Project beyond what it would have cost if the Contract had not been terminated.

211. As I have already held, the lawful termination of the Contract is founded on the exhaustion of the maximum amount of liquidated damages to which Panther was entitled and on the separate ground that MESC had abandoned the contract, this being a breach that in the opinion of Panther was irremediable. It is clear that the Prevention Principle does not apply to the abandonment ground which is based on a breach of contract other than delay. I am also of the view that the Prevention Principle is no bar to the recovery for losses flowing from termination of the Contract founded on the exhaustion of the maximum level of liquidated damages ground. This is because MESC failed to comply with the notice requirements relating to its applications for EOTs thereby giving Panther the entitlement to liquidated delay damages and because MESC is bound by the implied covenant in Sub-Clause 3.5 of the Contract not to contest the Engineer’s adverse EOT determinations unless it has given notice of its dissatisfaction of those determinations within 14 days of receiving the same.

212. It follows in my judgment, that Panther is entitled to recover damages in respect of: (a) the entitlement to be paid liquidated delay damages under Sub-Clause 8.7¹⁴ of the Contract; (b) rectifying defective work for breach of Sub-Clauses 7.1¹⁵ , and 17.7 (a)¹⁶ of the Contract; (c) the additional cost of completing the Project over and above what it would have cost if the Contract had continued; and (d) certain expenses incurred in consequence of MESC’s site invasion on 14 November 2019 when MESC was obliged under Sub-Clause 15.2¹⁷ to have vacated the site on 9 November 2019.

(a) Liquidated delay damages

213. I accept Mr Allan’s calculation of the sum due under this head in the amount of AED 4,181,153.25 confirmed in his slide no. 24 marked shown in the course of his prepared presentation.

(b) - Rectifying defective work of the Contract; and (c) - The additional cost of completing the Project over and above what it would have cost if the Contract had continued.

214. I take these two heads of damages together because that is how they have been treated by Mr Allan and Mr Singhal.

215. Both sides pleaded fairly extensive particulars of the damages that each sought and it was these particulars that Mr Allan and Mr Singhal addressed in their reports. The particulars pleaded by Panther of its alleged loss by reason of the termination of the Contract were especially detailed resulting in extensive documentary investigation by Mr Allan in particular.

216. I set out below the information contained in a helpful slide (19) presented by Mr Allan that showed the Experts’ findings on the value of the work done down to the termination of the Contract.

217. Mr Allan calculated the value of the work done down to termination of the Contract to be AED 34,341,637.53, based on the value that the Engineer came up with in its updated valuation of 8 December 2019 presented in the form of an Excel Spreadsheet following an earlier valuation dated 4 November 2019 of AED 32,755,944.07. I accept Mr Allan’s evidence that he had a concern that the 4 November 2019 valuation was not up to date but he was fairly satisfied when he reviewed the 8 December 2019 valuation that the Engineer had addressed particular items and seemed to have generally revisited the valuation and updated it.

218. Mr Allan also adopted: (a) the Engineer’s forecast Final Contract Sum as per the 8 December 2019 valuation of AED 41,811,532.50; and (b) the gross amount of AED 33,835, 493 certified in the Engineer’s Payment Certificate No. 21 of which the amount paid to date is AED 31,839,449.27 inclusive of the advance payment but exclusive of VAT.

219. MESC submit that it is inappropriate to rely on the Engineer’s 8 December 2020 valuation and instead, as was Mr Singhal’s approach, reliance should be placed on the minutes of meetings between the Engineer and MESC and correspondence between those parties claim. In advancing this submission, MESC makes the following points:

220. Conversely, as RS confirms, this contemporaneous documentation supports the valuation of work done as contained in MESC’s application for final payment for the sum of AED 38,563,423.16 (95.62% of the Contract Price) {635}. As RS confirms, “This financial progress percentage claimed by the Defendant seems reasonable with respect to the above extrapolated financial percentages” {635/121}. RS gives a comparison table with extrapolated final percentages based upon the ‘per week percentage progress’ foreseen by the Engineer, and the progress as recorded during these weekly meetings. The extrapolated figures clearly illustrate that MESC’s final calculation is consistent with the actual progress as recorded in the MOMs and the weekly rates of progress foreseen by the engineer (table at {635} – {636}).

221. MESC also points to discrepancies with the totals as added up in tab 01, line items 75 – 77 and line item 106 (i.e. 10% + 69% does not add to 88 %). Without the previous payment certificate issued by the Engineer, these works were valued at 88% {9948}. These have however either erroneously or intentionally been revised down within the December Valuation. These changes are unexplained. If a matter was previously certified, it should not be subsequently revised down without any explanation. These changes illustrate the unreliability of the December Valuation.

222. MESC further submits that the unreliability of the December Valuation is demonstrated by the lack of supporting documentary evidence. Sub-Clause 3.5 of the Contract provides that particulars need to be provided to support the valuation. Further, it is contrary to common practice, it being the practice for the evidence relied upon in making assessments to be provided, in particular inspection requests, photographs and other similar documentation. An example which illustrates the problems arising from the failure to provide documentation, within the December Valuation, is the Engineer’s significant deduction of AED 978,248.68 (see Appendix A, line item 41 of excel at {K/81}). There is no documentary evidence to support this significant deduction. The same can be applied to the entire document. It is also the case that the December Valuation was never formalised and finalised as a determination under Sub-Clause 3.5 and was never sent to MESC.

223. I am not persuaded by MESC’s submissions. Whilst the December Valuation was in the form of an Excel Spreadsheet, it is nonetheless an intelligible document that provides the function of a post termination valuation conducted by the Engineer which is what is required under Sub-Clause 15.3. The reason no evidence was provided by MESC to the Engineer is explained by MESC’s refusal to attend meetings to discuss the valuation proposed by the Engineer. Further, whilst Mr Rezk may have erred when he said in evidence that the December Valuation had been provided to MESC, I accept the rest of his convincing evidence when he was cross-examined on the 8 December 2019 valuation and insisted that the Engineer had not accepted MESC’s proposed completion percentages. This evidence²⁰ in my view strongly supported Mr Allan’s reliance on the 8 December 2019 valuation as did Mr Allan’s own evidence in cross-examination.²¹

224. I am also of the view that the time taken to complete the Project was not unreasonably long as submitted by MESC.

225. I now propose to address the submissions made in paragraphs 280 – 309 in MESC’s closing submissions on Mr Allan’s assessment of the damages due as a consequence of the termination of the Contract including a total of AED 5,718,474.78 in respect of the additional costs incurred to complete the Project. Mr Singhal’s assessment of the sum due under this head is AED 756,008.89.

226. As MESC’s counsel, Mr Alexander Burrell, observes, the two key reasons for this difference are: (1) the differing approaches of the experts over 8 out of 38 items where the PO/Subcontract was issued to the subcontractor/vendor prior to the date of termination; and (2) Mr Singhal’s opinion that particular documentation necessary to verify these sums had not been produced by Panther.

MESC’s submissions on PO/Subcontracts issued prior to termination

227. In cross-examination, Mr Allan was asked about an item concerning Instep Trading Co LLC – Supply and installation of WPC Decking – AED 33,925. He said that this concerned missed scope of work and there seemed to have been a pre-termination agreement that Panther would take it over, on which basis the payment pre-termination was an advance payment but the works were carried out post-termination.

228. When it was put to Mr Allan that if there was an agreement before termination for works to be de-scoped, this would not be a cost of termination, he confirmed “That would be logical but assuming that the scope has been removed from the valuation. Now in some cases that was the case and I have noticed that…But if the scope remains within the valuation then I think it’s appropriate that it’s included in these costs.”

229. Since the conclusion of the trial, the quantum experts at Masin, Mr Singhal’s firm, have looked into Mr Allan’s evidence that this item (Instep Trading Co. LLC – Supply and Installation of WPC Decking) was included within the December Valuation, and reported that it was not included and nor was it ever in MESC’s scope. The WPC decking relates to a wooding system constructed around the swimming pool. Within the Bill of Quantities (“BOQ”){4294} and the December Valuation, the swimming pool works are described as (see sheet 12 of excel sheet at {K/81}):

As such, this item (WPC decking) was never MESC’s scope. Mr Allan’s inclusion of this item is accordingly erroneous, and his suggestion that he had checked that this item was within the December Valuation is also incorrect. This is just one example in which Mr Allan’s approach is found to be incorrect. As such, this undermines his evidence on this issue.

230. Secondly, even if this item was included within the December Valuation, the methodology adopted by BA in this regard completely ignores the contractual mechanisms concerning cost of completion and Panther’s prospective entitlement to claim for these items, and his assessment is accordingly invalid.

231. If termination pursuant to Sub-Clause 15.2 is deemed to be valid, Panther is entitled to claim back from MESC the additional cost Panther incurred in completing the works. However, Panther is not entitled to descope works from MESC, then claim back the additional cost of these descoped works. If works are descoped, the correct approach is to include the same as a negative variation (pursuant to Sub-Clause 13).

232. As such, whilst it is correct that MESC should not be credited/paid for work it did not complete, the assessment should deduct the amount MESC were going to be paid from the valuation. However, what Mr Allan has done instead is to allocate to MESC the cost to Panther of this work. The key issue in practice with this approach is that the amount MESC would have originally been paid for this work may (and is likely to) differ from what it subsequently cost Panther to get these works completed by another contractor. Panther is not entitled to any additional costs of another contractor undertaking this work, as this work was descoped before termination, and is not work to be undertaken following termination (no entitlement pursuant to Sub-Clause 15.4(c)). As such, Mr Allan’s assessment is not reliable.

233. Accordingly, as it has not been adequately clarified that these items were not already deducted from the December Valuation, and as BA’s assessment of costs of completion is not reliable as it may include costs for which Panther is not entitled, BA’s assessment on these 8/38 items of costs of completion must be rejected. This is with the exception of Better Life, Sicilia and Xs Platforms, which Mr Allan already agreed are to be excluded, and Eastern Deira, which concerned an alleged clerical error. Mr Allan confirms this alleged clerical error {12918}, no other evidence is adduced on this item. Should the Court accept BA’s evidence that this was a clerical error, it is accepted that this could constitute part of the costs of completion (this item was AED 417,000.00 see excel at {K/3} – at item 14). However, no admission is made as to the adequacy of documentation substantiating this item otherwise.

The Court’s Response

234. I accept Mr Allan’s view that where the scope remained within the valuation it was appropriate to include the cost in the valuation and I am not prepared to reject his evidence that the WPC decking item was included in the December 8 valuation simply on the basis of a post trial investigation into that valuation when such an investigation could and should have been conducted prior to the trial, it having been decided to challenge Mr Allan on the WPC Decking item.

235. Mr Allan struck me as a very careful and thorough witness. He saw good evidence of payment for the various items and I accept his evidence in cross-examination that if the issue of scope was not clear he required Panther to identify the relevant Bill of Quantity and if an item was outside MESC’s scope it was not included in his valuation.

236. Further, and in any event, in respect of the WPC decking item, although inevitably I have received no responsive submission from MESC, I think there is considerable force in Panther’s submission made in paragraph 48 of its Rebuttal Submissions, that any incidental works not expressly mentioned in the Bill of Quantities are deemed to be included, and here the scope of the item was “complete installation of swimming pool”. This submission is supported by: (i) Mr Allan’s slide 25 which refers to Instep as follows: “Instep is MESC scope as per contract drawings, 50% payment pre-termination notice, works done post termination.”; (ii) Mr Allan’s comment “Payment receipts attached, this payment made for supply and installation of the pool decking system which is listed in Bill No 12 page 11/50 item A (swimming pool) in Appendix BA-Q1 item 20 (Instep); (iii) Section 1 A of the BOQ Preambles that provides that the BOQ shall be read in conjunction with the Conditions of Contract, Specifications, Drawings and Local authority requirement; and (iv) Preamble G that provides that the Bill of Quantities may be incomplete and the Tenderer is referred to the Drawings and Specifications for complete information in respect of all relevant descriptions, design parameters and the like.

237. I therefore reject the challenges made by MESC identified in paragraphs 219-224; 227 - 233 above.

MESC’s Case on Missing Documentation

238. In assessing the costs of completion, there is a requirement for certain documentation to verify three points: that it was within the contractor’s original scope, that it is related to the project and that it was actually completed. Mr Allan ageed with this submission in evidence.

239. The documentation you would need to verify these three points would include the subcontract/purchase order, and some form of payment receipt. Whilst in this case, Mr Allan confirmed there was good evidence of payments, there was no PO/subcontract for a number of items (as Mr Singhal confirms) and no documentary evidence was referenced by Mr Allan to clarify that these works were in fact part of MESC’s works. Rather in respect of these items, Mr Allan has relied on the invoice/evidence of payment and his oral conversations with Panther regarding these items. This is not adequate. The Court’s ResponseIn my judgment, the reliance by Mr Allan on the documents he consulted to verify the items of work done in completing the project was reasonable and sufficient. I repeat my findings in paragraph 235 above that he saw good evidence of payment for the various items and if the issue of scope was not clear he required Panther to identify the relevant Bill of Quantity and, if an item was outside MESC’s scope, it was not included in his valuation.

MESC’s case on other damages caused by other loss approved by Mr Allan

Company overheads

240. The claim for company overheads can be divided into two sub-items. One is staff costs (see item 2 in table at {409}), the other is various other costs, constituting fees and office rent (items 3-9 in table at {409}).

Staff Costs

241. Panther claim for 19 months delay, plus 12 months DLP {409}. For the first 13 months of this period (until termination), regardless of any findings on cause of delay, Panther is not entitled to claim, as this item relates to delay related damages, for which (until termination) Panther is only entitled to claim liquidated damages.

242. Mr Allan appears to agree with this position, which is why he suggests that 18 months of this period (12 months DLP and 6 months delay) should be moved to ‘costs of completion’ {410}. However, whilst the logic of this move is understood (as the period being moved is the period following completion), this is a misguided and confusing categorisation. In particular, this is because this move obscures the distinction between being able to claim general damages, and whether the claim relates to termination itself.

243. It is correct that this 18-month period of staff costs may be recoverable in addition to liquidated damages (as it is after termination). However, it is incorrect to suggest that staff costs for this 18-month period are a ‘cost of completion’. The determination on entitlement to these staff costs falls into three parts:

The Court’s Response

244. With the exception of the contention that Panther failed to mitigate, I accept these submissions advanced by MESC and therefore there must be an appropriate adjustment to Mr Allan’s total assessment of the damages due to Panther.

MESC’s case on “Other Items” -- Items 3 – 9 in Mr Allan’s table at p.35 of his first report [409]

245. These were all incurred before termination. As such, these would also be excluded as during this period Panther was only entitled to liquidated damages for delay. In any event, there was no PO for the office rent (item 5 of table at {409})

246. These items are:

The Court’s Response

247. With the exception of the contention founded on the absence of a PO for item 5, I accept MESC’s submissions. Not only is Panther’s sole entitlement in respect of these sums the specified liquidated delay damages, but also the losses complained of were not losses arising from the termination of the Contract. An appropriate adjustment must therefore be made to Mr Allan’s assessment of the damages payable to Panther.

MESC on Security (Items 11 – 18 in Mr Allan’s table at p.35 of his first report [409]

248. Provision of security was within MESC’s original scope, as such Panther’s provision of the same after termination would prospectively be recoverable. This item is not delay related, in that this is not a cost which Panther was incurring before termination, which was prolonged as a resolute of delay/termination. Rather this item is alleged to have been incurred solely as a result of the termination.

249. MESC make the following points:

The Court’s Response

250. I reject submissions ‘a’ and ‘b’ but accede to submission ‘c’ and the necessary adjustment must be made from Mr Allan’s damages assessment.

MESC on Development management expenses

251. It is entirely unclear what this claim is for. Even BA during evidence confirmed “what the detail of the service is I’m not quite sure”. There is no PO or any other documentation which provides any detail on what these services are for. The invoices only state “project design, construction and management services” {3283}. These services were provided during three months after completion of the works, then again in February 2021. It is not clear whatsoever what these services are for, yet it is a substantial claim (AED 455,000).

252. Panther have accordingly failed to prove that these alleged costs were caused by MESC, whether that is MESC’s allege delay or the termination, Panther have failed to discharge their burden of proving entitlement to these costs.

The Court’s Response

253. In paragraph 56 (c) of his witness statement, Mr Axprahzhiyev (who was a reliable witness on the topic of quantum) states that the development management expenses in question were paid to Town X Real Estate Development LLC for additional management services required by Panther by reason of the delays to completion and failure to complete the Project. The basis of this claim for additional expense is that it was incurred in mitigation of the consequences of MESC’s failure to complete the Project on time. Although the expense was incurred subsequently to the termination of the Contract, the predicated causation was delay prior to termination and since Panther was responsible for this delay, not MESC, this item in my view is irrevocable. I am also of the view that in failing to give details of the services received, Panther has failed to show that, even if the requirement of causation is satisfied, this expense was incurred in reasonable mitigation

254. I therefore disallow this item with the consequence that Mr Allan’s assessment of the damages due to Panther must be appropriately adjusted.

MESC on Audit / Valuation

255. (1) These costs are alleged to have been caused by MESC’s alleged delay. These costs were incurred before termination, as such they are not recoverable as Panther is only entitled to LDs in respect of delay before termination.

256. (2) In any event, Panther does not provide a copy of the Audit or Valuation nor any evidence supporting why these costs were actually incurred. As such, again Panther has failed to discharge their burden.

The Court’s Response

257. I accept submission (1) and would add that to the extent this claim is delay based, MESC was not contractually responsible for the delayed Completion Date. Mr Allan’s assessment of the damages payable to Panther must be adjusted accordingly

MESC on Utilities

258. These costs are only recoverable if the termination is deemed valid. Further, Mr Allan failed to clarify what the utility costs to Panther would have been had it not been for the termination.

The Court’s Response

259. I am satisfied that only additional costs were assessed by Mr Allan and therefore reject this submission.

MESC on Legal costs of in respect of the termination of the Contract and the Site Invasion

260. These costs are numbered 48 – 53 in the table on p.409. In its submissions, MESC addresses the claims relating to Panther’s alleged legal costs incurred in the Dubai Court as a result of the alleged site invasion and submits that a party cannot claim costs incurred in litigation in a different forum where that court has not made an order for the payment of those costs.

The Court’s Response

261. In my judgment, the costs incurred in obtaining legal advice on the situation leading up to and including termination of the Contract cannot be recovered as losses consequential on the termination. Items 48, 49 and 50 are therefore not recoverable by Panther. Reasonable sums incurred in seeking advice in respect of the site invasion on 14 November 2019 where MESC was in breach of contract for failing to leave the site following termination are recoverable but in my opinion costs incurred in advising on and seeking relief in the onshore Dubai courts in respect of the site invasion are not recoverable because in incurring the same Panther ran the risk that it might not succeed in those courts or that the Dubai court in question would be of the opinion that there were other good reasons for not awarding Panther its costs.

262. Under this head of claim, I would award Panther AED 50,000 in respect of legal fees paid for general advice on the site invasion. Mr Allan’s assessed damages must be adjusted accordingly.

MESC on Engineer’s supervision fees

263. Panther claims Engineer supervision fees for the entire alleged period of delay and some of the months following termination. They additionally claim for fees from other engineers. MESC submits:

The Court’s Response

264. I accept submission (a) and accordingly disallow item 56. I also accept submission (b) (i).

265. As to submission 1 (b), I direct Panther to come up with a reasoned proposal (no doubt with the assistance of Mr Allan) as to how the claims are to be split between the pre and post termination periods. Again, Mr Allan’s assessment of the damages due to Panther must be adjusted accordingly.

266. Turning to submission b (ii), I reject the proposition that Panther failed to mitigate its loss by taking too long over the completion of the Project.

267. As to submission c, I find that there exists a sufficient basis for the Proleed/Nakheel fees to be recoverable.

MESC on Other General Damages

268. In his first report, Mr Allan sets out his own personal assessment of the prospective general damages to which Panther may be entitled as a result of the termination {413}. In particular, he proposes a figure of AED 806,631 to compensate Panther for the potential lack of the benefits of having a 10 year latent defect period obligation owed by MESC. At the same time, Mr Allan confirms that the admissibility of this claim from a legal and contractual perspective is a matter for the Court to decide {413/4.8.5}.

269. Put simply, Panther has no legal or contractual entitlement to any such damages. This is an entirely speculative figure conjured out of thin air by BA without any documentary support (as BA concedes [2/185]). Indeed, Mr Allan confirms that this opinion is ‘sufficiently qualified’ [2/185].

270. These damages are not grounded in any legal/contractual entitlement and are entirely speculative, as such this claim must be dismissed.

The Court’s Response

270. In my view, there is an appreciable risk that the Panther could suffer future loss given that the replacement contractor and the newly engaged subcontractors have not bound themselves to a 10 year latent defect guarantee/warranty that matched the guarantee/warranty to which MESC had committed itself. In my view, that risk would be in respect of the work done post termination. It is of course difficult to quantify the loss represented by this risk but that is usually not a reason for a court declining to do its best to arrive at a reasonable figure. Mr Allan testified that in reaching the figure of AED 806,631 he used his experience over the years as to how a tender may be priced to arrive at figure of 2% of the original Contract Price. This implies an unwarranted assumption on Mr Allan’s part that MESC would not be liable or would not honour its 10 year guarantee in respect of any of the work that it had done down to termination of the Contract. In substitution for Mr Allan’s figure, I award 3% of the figure that Panther is going to receive after the adjustments I am ordering in respect of the additional completion costs resulting from termination of the Contract.

The Court’s overall conclusion on the damages to be awarded to Panther in consequence of the lawful termination of the Contract.

271. The final determination of the damages to be awarded to Panther can be established by taking Mr Allan’s various assessments of the component parts of the total sum he states is due and then adjusting for those items in accordance with the disallowances I have held should be made above.

272. For the avoidance of doubt, I make the following matters clear. First, I accept the AED 80,000 proposed by Mr Allan in respect of Materials On Site (MOS) which he described as “an ex gratia payment”. Whilst Mr Allan accepts that the various documents provided by MESC to Mr Singhal supported the latter’s figure for this item (AED 247,823.75), the fact is, as stated by Mr Allan, no evidence was led by MESC as to the actual physical presence of material of this worth on the site at the relevant time. Further, it was Mr Rezk’s evidence (which I accept) that MESC’s materials were sold for AED 50,000 and the scaffolding for AED 30,000. In my judgment, in the circumstances of this case, in the absence of such evidence, there are no sustainable grounds for disallowing the AED 80,000 proposed by Mr Allan.

273. Second, I accept the AED 1,000,000 figure adopted by Mr Allan for Variations for the reasons he gives in footnote 1* in his slide no. 18, namely, that not all Variation work appeared to have been completed as of the date of termination and therefore he was reducing his earlier assessment for variations (AED 1,668,898.69) which reflected forecast final value. It also the case that in MESC’s closing submissions, the only issue taken with the figure for Variations in MESC’s submissions on the quantum of its claim for the value of the unpaid work completed as of the date of termination was whether the mark-up to be applied was 15% or 8% and for the reasons I give below in paragraphs 281– 282, I find that the contractually agreed mark-up was 8% and not 15%.

274. Third, save for the award of 3% of the figure that Panther is going to receive after the adjustments I have made in respect of the additional completion costs resulting from termination of the Contract, I award nothing for any claim by Panther for loss of reputation.

275. Fourth, I accept Mr Allan’s adjustment on prime cost rates in the sum of AED 155,300 which appears to be agreed by Mr Singhal.

276. Fifth, the agreed retention amount of AED 3,383,549.39 should be set off against the damages to be awarded to Panther following the adjustments that must be made to Mr Allan’s assessments of the component parts of the total damages he states should be awarded in his second report and his prepared statement including the relevant slides.

MESC’s claim for damages

277. MESC’s pleaded claims and Mr Singhal’s approach thereto are conveniently listed in Mr Singhal’s slide no. 14 that was shown in the course of his presentation. Mr Singhal was unable to assess the following claims: (i) Subcontractors; (ii) Repatriation of staff; (iii) Interest; (iv) Financial charges following wrongful liquidation of the Security Guarantees; and (v) Increased premiums of future security guarantees. The claim for dispute resolution costs was not pursued.

278. Included in the list is the claim for the value of the work that had not been paid for as at termination of the Contract. As we have seen, MESC disputes Mr Allan’s valuation of the unpaid work on the ground that he ought not to have adopted the Engineer’s valuation of 8 December 2019. I have already dismissed this submission when dealing with Panther’s damages claim and say no more about it.

279. In respect of variations, MESC submits that the Court should find that there was a 15% mark up on variations pursuant to its Bid Proposal Letter dated 22 May 2017. Panther contends that 15% was not contractually agreed on the ground that this Bid Proposal was superseded by the LOI of 11 July 2017, alternatively that MESC later agreed to an 8% mark up. Responding to Panther’s case that it agreed to an 8% mark up, MESC argues that this was done as a gesture of good faith and did not constitute a variation of the Contract.

280. In my judgment, MESC’s Bid Proposal was superseded when the Contract was signed in accordance with Section 00400 of the Tender Form Paragraph 1 which stipulates that the agreement to execute the Works for the specified Contract Price is “without any conditions whatsoever’. It is also the case, as Mr Allan points out in his first report, that the Contract contains an entire agreement clause. I therefore abide by my earlier finding that the figure for variations in the calculation of the value of the works done should be AED 1,000,000.

281. Turning to the claim for prolongation costs, this claim will only be available if it be held on appeal that I was wrong to find that MESC was in breach of the notice requirements in the nature of condition precedents under Sub-Clause 20.1.

282. The experts are agreed that for a 306 day period of delay the figure in question should be AED 1,741,313.42. There is disagreement, however, in respect of four items – scaffolding, bank charges, connection fees and overheads. MESC contends these items are all delay- related. Panther contends that they are not and that there are other reasons why MESC’s overhead and loss of profit claim is not well founded.

283. I accept Mr Allan’s view that unless there is specific evidence to the contrary, of which there is none, the cost of scaffolding is not delay-related but task-related, with the scaffolding supporting a specific construction activity. I also agree with Mr Allan’s view that the bank charges, of which there are only three, are one-off charges rather than time-related charges, and the connection fees, of which there are only three in the entire period in question, are also one-off charges and are not time-related.

284. Turning to the overheads claim, this is also advanced by MESC as a separate, free-standing claim together with MESC’s claim for loss of profit and I accept Mr Allan’s view that these claims are not made out because MESC has failed to demonstrate that there was other revenue and profit earning work available which in the absence of the delay caused by Panther could have been secured, this being a requisite for delay-related overhead and loss of profit claims (see paragraph 2.7 of the SCL Protocol). Mr Singhal argues that the SCL Protocol is not of universal application. This may be so, but in my view paragraph 2.7 expresses what in any event would be the correct approach to whether the delay has been the cause of the alleged loss.

The liquidation of the Security Guarantees

285. Sub-Clause 4.2 of the Contract provides:

286. The Performance Guarantee and the Advance Payment Guarantee were in similar terms, save for the sums payable. The Performance Guarantee reads as follows:

287. In accordance with the italicised words in Sub-Clause 4. 2 of the Contract, the only pre-condition for drawing down the guarantees was that Panther considered that it has suffered a loss arising out of the Contractor’s breach of contract or if the Employer considers that sums are due from the Contractor to the Employer in relation to the Contract. As to this, MESC might submit, as it did when dealing with the background to the dispute, that Panther was cynically trying to put undue pressure on it by cynically terminating the Contract and liquidating the guarantees. In my judgment, this submission is not borne out by the evidence and I find that when Panther drew down on the guarantees, it genuinely believed that it had suffered loss arising out a breach of the Contract and that it was entitled to the maximum level of liquidated delay damages.

288. This said, it was plainly an implied term of the Contract that sums paid out under the guarantees were to cover losses arising from a breach of the Contract or sums due to be paid under the Contract, so that to the extent that sums received under the guarantees exceed the compensation awarded to Panther for losses or sums due, that excess must be paid to MESC.

CONCLUSIONS

1. By its letter dated 6 November 2019, Panther terminated the Contract consistently with its terms on each of the following grounds: (i) the maximum amount of delay damages stated in the Appendix to Tender was exhausted; and (ii) MESC had abandoned the Works.

2. Panther is entitled to liquidated delay damages under Sub-Clause 8.7 of the Contract in the sum of AED 4,181,153,.25.

3. Panther is entitled to damages to compensate it for the additional cost of completing the Project over and above what it would have cost if the Contract had not been terminated.

4. The retention amount of AED 3,383,549.39 should be set off against the damages to be awarded to Panther following the adjustments that must be made to Mr Allan’s assessments of the component parts of the total damages he states should be awarded in his second report and his prepared statement including the relevant slides.

5. Panther’s claim for damages for the lost opportunity to sell or rent the units constructed under the Contract is dismissed.

6. MESC is entitled to be paid for the value of the unpaid work it had done under the Contract as at 6 November 2019, the date the Contract was terminated.

7. The completion of the Project was delayed by 325 days, of which 19 days are to be assigned to MESC and 306 days are to be assigned to Panther.

8. If it be held on appeal that MESC is not debarred from seeking an EOT of 306 days by reason of a failure to comply with the time requirements under Sub-Clause 20.1 in the nature of conditions precedent, MESC will be entitled to prolongation damages in the sum of AED 1,741,313.42.

9. Panther was entitled to liquidate the Security Guarantees but to the extent that the sums awarded herein to Panther are less than the sums received under the guarantees, Panther must pay that balance to MESC.

10. MESC is debarred from seeking the costs of Mr Singhal’s expert evidence on delay including his two reports and his prepared statement on that subject, and his attendance to give oral evidence thereon, even if MESC would otherwise be entitled to recover those costs; (2) MESC must pay the costs incurred by Panther in respect of Mr Allan’s reports on delay.

DIRECTIONS

1. The parties are to attempt to agree within 14 days of the date of the issuance of this judgment the sums to be awarded under Conclusions (3) and (6) having regard to to the adjustments to Mr Allan’s assessment figures ordered to be made in the course of this judgment.

2. Following the determination of the aforesaid sums, the Court will set a timetable for the service of submissions on the question of the costs of these proceedings.

Issued by:
Ayesha Bin Kalban
Acting Registrar
Date of issue: 26 September 2022
At:12pm