By Laura Warren and Ramiz Shlah/Doha
As Qatar’s business sector continues to mobilise itself to achieve the goals of Qatar’s 2030 Vision and in particular to prepare for FIFA 2022, the legal regime applicable to engineering and architectural consultancy services is becoming of particular interest to various stakeholders, both foreign and Qatari.
In the first section of this article, we explore the interaction between business practice and Engineering Law No 19 of 2005 as amended by Law No 12 of 2014 (the Engineering Amendment, together the Engineering Law). In the second section of the article, we summarise the Engineering Amendment.
Interaction between business practice and the Engineering Law
One of the key issues which arises in respect of the provision of engineering and architectural services in Qatar relates to the contractual liability which companies may incur for such work and whether such liability will be incurred by all interested parties or limited to a few.
Many construction projects in Qatar are tendered in the form of design and build contracts, although in some cases the tender relates to design or construction only.
Regardless of whether the tender is design and build or design or construction only, an interesting question arises, in respect of design services, as to whether a company which is not licensed to provide engineering or architectural consultancy services in Qatar, may accept contractual design liability before a client (or conversely whether a client may enter into a contract assigning such liability to an unlicensed entity).
In addition, companies which are not licensed to provide engineering or architectural consultancy services in Qatar are also interested to know whether contributing to the engineering or architectural design and implementation phase(s) of a project (if for example only one member of the consortia of which it is part is licensed to perform such services) is permissible under the Engineering Law.
In order to determine whether a party may incur contractual liability or contribute to the design phase(s) of works without an engineering or architectural licence, it is necessary to consider the Engineering Law, the definitions of “engineering profession” and “engineering consultancies” as stated therein and the circumstances and requirements of each construction project on a case-by-case basis.
Generally, it would appear that the Engineering Law does not explicitly prohibit taking on contractual or statutory liability for design works even where a company is not licensed to conduct such an activity; however, contributing to the design phases of a project would appear to be practicing an engineering profession or engineering consultancy for which a licence would be required under the Engineering Law (unless exempt by the Minister of the Ministry of Municipality and Urban Planning in accordance with Article 35 of the Engineering Law as amended – such exemption is described below in the second section of this article).
We are also aware of the argument that a licence to practice an “engineering profession” is not required in cases where a company is conducting engineering or architectural works for its own benefit as opposed to for a third party. It is important to note that whilst such a distinction may apply in certain limited circumstances, it is difficult to draw a line between conducting works for one’s own benefit and the benefit of a third party.
Moreover, in some cases, what was originally envisaged as work for one’s own benefit may be used by another party, and in such case, the issue of licensing requirements will become relevant.
Ultimately, while a practical interpretation of the Engineering Law is likely to benefit most foreign and Qatari stakeholders contributing to the significant infrastructure development of Qatar, it will be important for all entrants to the market place to consider the provisions of the Engineering Law carefully before finalising its Qatar business strategy.
Amendment to the Engineering Law
The Engineering Amendment was published in the Gazette on February 16, 2014 and became effective on approximately April 16, 2014. The Engineering Amendment provides a number of amendments which are described below.
The Engineering Amendment commences by providing new definitions and amendments to existing definitions contained in the law, namely:
l The term “Board of Directors” of the Ministry of Municipality and Urban Planning (MMUP) is replaced by the term “Council of Ministers”. It is understood that there was in fact no “Board of Directors” constituted by the MMUP, hence the amendment.
l The term “Engineering Professions” was defined anew as follows: “The engineering activities practiced by those qualified in the divisions and branches of the specialisations of architectural, civil, electrical, mechanical, and chemical engineering, mines and mining and the various other fields of engineering.”
l The term “Engineering Consultancies” was defined anew as follows: “The works of preparing architectural and constructional drawings, diagrams, designs, surveying, and diagramming; supervising over performance; giving advice; conducting feasibility studies; estimating costs and computing quantities and managing projects in the various engineering professions.”
lA definition of “Engineer in Charge” was added as follows: “The Engineer responsible for giving opinion on the engineering and technical matters, signing and certifying designs and contracts and engineering and technical works carried out by local and international Engineering Consultancy Offices.”
The Engineering Amendment also reconstituted the “Committee for the Enrolment and Categorisation of Engineers and Engineering Consultancy Offices” (the PEC) such that the Urban Planning and Development Authority and Q-tel no longer nominate members to the PEC. Under the reconstituted PEC, the chairman and vice-chairman are to be nominated by the MMUP, and the Ministry of Interior, Ministry of Information and Communication Technology and Qatar University each nominate a member to the PEC (in addition to the other members which remain unchanged).
The period of enrolment for engineers was extended from two years to three years. In case of non-renewal, the Engineering Amendment implements a tiered approach such that warnings and fines are assessed prior to an engineer’s deletion from the relevant register.
The Engineering Amendment also exempts Qatari faculty members who hold a PhD and teach engineering at a Qatari university from the prohibition against public officials or employees from being owners or employees of engineering consultancy offices.
Penalties and fines for engineers and engineering consultancy offices that are deemed to have violated the Engineering Law have also been amended. Engineers may now be fined an amount not exceeding QR10,000 (previously no fine was applicable), and the fine assessable to engineering consultancy offices was increased from a fine not exceeding QR50,000 to a fine not exceeding QR100,000.
However, in certain cases contained in Article 33 of the Engineering Law, a fine not exceeding QR100,000 may be assessed (previously QR50,000) in addition to imprisonment up to three years.
Most interestingly, the Engineering Amendment permits the Minister of the MMUP (the previous version of the law granted the same authority to the un-constituted Board of Directors of the MMUP) to grant engineers and engineering consultancy offices performing contracts for the government, “which are of a special technical nature required by the public interest under a special agreement specifying the nature of the work and time required to perform it”, an exemption from the requirements of the Engineering Law for the period of the contract.
It is not clear in the Engineering Amendment on what basis the Minister of the MMUP may grant an exemption from the requirements of the Engineering Law; however, we are aware that an exemption will usually only be granted for highly-specialised works such as those involved in the oil and gas industry as opposed to civil engineering works for which many capable parties in Qatar are licensed.
In our view, any exemption will be determined on a case-by-case basis and may not lead to the exemption of foreign branches registered by the Ministry of Economy and Commerce from compliance with the Engineering Law and its registration requirements.
Note: All Qatari laws (save for those issued by, eg the QFC to regulate its own business) are issued in Arabic and there are no official translations; therefore, for purposes of drafting this article Clyde & Co has used its own translation and interpreted the same in the context of Qatari laws, regulation and current market practice.
- The views set out in this article do not constitute legal advice and readers are urged to seek specific legal advice in relation to any particular issues which arise from the subject-matter of this article. For further information on this topic or construction/ engineering legal issues, please contact Laura Warren at laura.warren@clydeCocom or Ramiz Shlah at ramiz.shlah@clydeCocom
