But even if an arbitration award is obtained, there remains the important question of enforcement. Iraq is not yet a signatory to the New York Convention (although this may change before too long). A possible alternative is enforcement of an award in Iraq under the Riyadh Convention, perhaps through the courts in Jordan.
All of which makes it important to take local legal advice in getting over legal and administrative obstacles.
What about contracts?
Iraqi law provides provisions relating to construction contracts in Articles 864-890 of the Iraqi Civil Code. These provide a framework for the main requirements for contracts of works. There are three key obligations:
- Work should be in accordance with the provisions of the construction contract between the parties
- The contractor should deliver the works on completion
- The contractor is liable for complete or partial collapse of the building.
This is a joint liability imposed on the contractor and designer for certain building defects, known as decennial liability. This is similar to strict liability but is applied to construction projects. This joint liability lasts for 10 years from completion and means contractor and designer are jointly and severally liable for structural defects in the works.
The next decade in Iraq for UK construction companies
Pass the crystal ball. As risks lessen, or are successfully managed, the opportunities presented by Iraq become more attractive, but not, of course, just to the UK industry.
Less risk is likely to mean more competition. So - swings and roundabouts. But perhaps it is also worth remembering the phrase “fortune favours the brave”.
Raid Abu-Manneh (pictured) is a partner in the Construction and Engineering team at Mayer Brown International and heads the International Arbitration Group in London.
This article first appeared in Building, and is published by Iraq Business News with the kind permission of the author.
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