Ecwc CL TM Aajb

Training Material on: Construction Law
Ethiopian Construction Works Corporation
Training on
Construction Law
For
Addis Ababa Justice Bureau Professionals
By
Zewdu Tefera Worke,
(Engineering Contracts Lawyer)
Legal Consultant & Trainer, ECWC
Organized & delivered by: Zewdu Tefera Worke, Engineering Contracts Lawyer, Page 1
Construction Law & its Formula:
Special Emphasis to its Key Systems
………………………………………………………………………………………………………………
Table of Contents
1) Introduction
2) Construction Law: Conceptual Framework
3) Construction Law: The Formula
4) Systems derived from the Formula
 D: Delivery System
 K: Contract System
 L: Legal System
 P: Person related System
 R: Procurement System
 O & L: Contract Management System
 E: Enforcement System
5) Conclusions & Recommendations
 Consulted Sources 12 Pages
Construction Law & its Formula:
Special Emphasis to its Key Systems
By:
Zewdu Tefera Worke
………………………………………………………………………………………………………………
1. Introduction
This training material is based on three parts: viz., conceptual background on construction law; the
Formula on Construction Law; and detail discussion on the Formula.
The first part provides a broad conceptual framework on construction law. This part introduces
the concept, scope & dimensions of construction law. The second purpose of this part is to provide
conceptual background to the audience to the Formula on Construction Law.
The second part presents the Formula on Construction Contract & Law, its legend & application
and identifies key systems derived from the Formula. The Formula on construction contract & law
has been developed by the Trainer in 2014.
The third part, as an emphasis to the paper, discusses, at some level of detail, about the identified
seven interrelated key systems derived from the Formula.
The final part presents some conclusions drawn from the training material.
2. Construction Law: Conceptual Background
In literature (1), there are different attempts to define the concept of construction law. However,
there are limitations in those attempts especially as to the scope it covers. The following working
definition developed by myself may provide a general conceptual foundation for construction law
and may serve as a good spring board to improve & enrich same in future by all of us.
Construction law may, based on relevant constitutional objectives, mean a legal and/or
contractual regulation of construction demand & construction delivery process, the role of
respective stakeholders therein & management in respect thereof.
There are five interconnected definitional elements in such working definition on Construction
Law: viz., objectives; demand; delivery; stakeholders; and management.
Objectives: Constitutional Foundation
The objectives emerge from the constitution. Construction has thus constitutional foundation.
These constitutional objectives are of twofold: viz., social & economic development objectives (2)
(3); and safe (4) and sustainable development objective (5). Construction, in terms of creating the
required physical infrastructure for required socio-economic development process, is one of an
integral part of development sectors. Its safety & sustainability alike is to be ensured through safe
& sustainable design & sustainable construction.
Construction Demand: Physical Infrastructure
There is a construction demand with a view to realize, in part, required socio-economic

development & its sustainability. This overall development demand including construction demand
(in terms of physical infrastructure projects) is directed (at macro-level); planned (at sectoral &
sub-sectoral level); and implemented (at project level) based on threefold respective documents:
viz., directive documents; planning documents; and implementation documents.
 directive documents: covers the following threefold document: viz., economic policy (6);
investment policy (7); and environmental policy (8); economic policy & investment policy
geared towards socio-economic development; whereas, environmental policy being geared
towards ensuring safe & sustainable development;
 planning documents: covers the following threefold document viz., social or economic
development policy; social or economic development plan; and social or economic
development program; such documents are sectoral or sub-sectoral in terms of their focus
& level; to ensure sustainability strategic impact assessment (9) has to be undertaken at
such & other relevant document level; and
 implementation documents: covers the following threefold document viz., construction
project document; tender document; and contract document; such documents are to be
prepared at specific construction project level; to ensure safety & sustainability,
environmental impact assessment study and other relevant studies have to be undertaken
(10); and the project document has to base itself on the principles of sustainable design &
sustainable construction;
Lawyers might be aware of or familiar with some of these documents (viz., implementation
documents) specially the (construction) contract document. The timing of awareness of such
documents (s) by lawyers and their professional engagement therein hugely matters.
Construction Delivery: Construction Industry
There is a construction delivery process to meet the required construction demand in terms of
relevant physical infrastructure. Delivery side is represented here by the construction industry.
This industry, in turn, has its own policy (11); legal (12); governance (13); regulatory and
institutional framework to be operative at all government levels, as appropriate (14). The
governance structure (at federal level) being so unique, as it being characterized by the presence of
all relevant stakeholders (identified below) therein with a view to provide integrated & strategic
leadership.
Stakeholders: Threefold Category
Threefold stakeholder is identified: viz., demand side stakeholders; delivery side stakeholders; and
other stakeholders.
 demand side stakeholders: recognized mainly as project owners; clients; employers or

otherwise (15); we may have public institutions (domestic & international); corporate
entities (public or private; domestic or foreign); voluntary organizations (local or
international) and/or individuals to appear like as project owner; client; employer; and so
forth;
 delivery side stakeholders: recognized mainly as construction professionals; construction
consulting firms (16); construction companies (17); and others (18); including all regulatory
and other relevant institutions within the construction industry to provide the required
leadership & management to such industry; and to regulate & capacitate those specific
delivery side stakeholders (19);
 other stakeholders: these are many-fold and may include, but not limited to, the general
public (20); the state organs (the legislative; the executive; the judiciary;) at all government
levels; specifically the planning; financing (domestic or otherwise); and various other
regulatory institutions from the executive organ of the government; project affected people;
corporate entities (like manufacturers; suppliers;…); voluntary organizations (like
associations;); other relevant professionals (including lawyers); and institutions and so
forth;
Management: Law and/or Contract
Lastly, the issue of management of the construction demand process & construction delivery
process and relevant stakeholders involved therein comes in to picture. The various relationships
between demand side stakeholders; delivery side stakeholders; and/or other stakeholders is based,
regulated and managed by all applicable laws and/or relevant contract, as appropriate. Some
relevant & key constitutional issues may not be disregarded (21). This, in general, may constitute
the broad area of construction law.
Without prejudice to relevant constitutional issues in the field of construction, applicable laws may
come from public law regime and/or private law regime, as appropriate and may come in to
application from different sources: like from domestic source (viz., the laws of Ethiopia); other
jurisdictions (the laws of other countries); and/or from public/private international law.
Public law regime mostly regulates regulatory relationship between demand side stakeholders and
some relevant other stakeholders. The relationship between the construction industry & its key role
players (viz., construction professionals; construction companies; consulting firms and others;) is
also regulatory. Public law regime aims to preserve public interest.
Private law regime mostly regulates contractual relationship between demand side stakeholders
(like client, employer); and delivery side stakeholders (like consultants; contractors; ..). Private law
regime said to be preserving private interest. There is, however, a clear exception as related to
administrative contract like public construction contract, which is embedded with high public
interest (22).
There are threefold categories of contract known as special contracts (23): viz.,
 works contract; like public or private construction contract; local or international

construction contract or otherwise like construction sub-contract; labour division based
construction contract; unit rate or lump sum or cost plus based construction contract (24)
and so forth;
 services contract: like for professional services (design and/or supervision service based on
specific agreements, forming part of engineering contract); commercial or business services
(like for construction equipment lease; banking (project financing, if any; and various other
banking services including security instrument related services;); insurance (like for risk
cover; security instruments related services;); transport services (like marine transport;
land transport; air transport or combination thereof;); or otherwise…); or employment

services (like labor); and
 supply contract: like for supply of goods (as related to construction plant; construction
materials; construction machineries;…) or as related to technology or know how
transfer;…);
Mostly, we focus on works or construction contract. However, we may need all other categories of
(special) contracts for a given construction project implementation, as appropriate.
To my understanding, therefore, the above brief discussion may show, somehow, the broad concept,
scope and dimension of construction law.
The following discussion is largely connected with or based on implementation documents: viz.,
construction project document; tender document; and contract document. The content of such
documents is driven by or based on specific delivery sub-system so selected for the project (25).
The discussion has to be seen from public construction project perspective.
Construction, Construction Law, Construction Contract
Construction is a result-oriented process. Threefold process is identified: viz., from mind to paper;
from paper to ground. Such respective process shall, legally, have its own owner.
“Minding” Process
The project “minding” process belongs to the project owner (within the demand side). The project
owner project demand or requirement (in terms of physical infrastructure or investment plan
relative thereto) is documented & then communicated in the form of formal document known as
project brief or alternatively known as project concept note (26);
“Papering” Process
The project brief (idea) of the project owner shall then become the basis for paper work as related
to the would-be planned & studied construction project. Depending on specific construction project
delivery sub-system selected for such project, the “papering” process or the detail designing
process of the construction project may belong to a design consultant in case of design-bid-build
delivery sub-system; or to the contractor in case of design-build delivery sub-system based
construction project. The detail design of the design-build contractor, is, indeed, based on the
detailed technical-contractual document known as Employer’s Requirements (ERs)) (27). In
contradistinction to design-bid-build delivery sub-system, the ERs is the product of the “papering”
process by the relevant consultant, based on formally documented & communicated project
requirements (idea) of the project owner, in case of design-build based construction projects.
“Grounding” Process
The said paper or detail design shall then become the foundation for the implementation of a given
construction project. The implementation of such construction project, viz., the “grounding”
process, obviously, belongs to the contractor. Then, at the end of the process, we will have a result
known as built-environment. The said result expected to be executed & completed in strict
compliance with contractually agreed project objectives: viz., project quality; project time; project
cost; safety & health considerations and/or legal requirements in respect thereof.
Such legal requirements are related with the application of construction law mostly coming from
the public law regime like construction related normative rules; codes (28); standards and so forth.
After “grounding”, there is, indeed, a last phase known as post-construction or alternatively known
as post-implementation (29) and totally regulated by applicable legal regime. Such period is known
as legal warranty period (30).
Construction, as a project, is transient, in terms of its time dimension, and unique, in terms of its
specific type, context & variables stemming there from. Based on its generic uniqueness, we may
identify the following threefold category of construction: viz., building construction (31);
engineering construction (32); and industrial construction (33).
All such categories of construction, their respective process and result alike are regulated by
construction law, which itself being based on specific legal system & legal framework and managed,
based on specific (local or international) standard conditions of construction contract, which has
been prepared based on specific delivery sub-system.
Construction law & relevant engineering contracts do require specific persons (34) (coming from
demand side & delivery side) who then become contracting parties, at the end of a given
procurement process, under such specific construction & related contract. The procurement
process is a legal process aimed at creating contractual & legal relationship between demand side &
delivery side stakeholders. The procurement method; the content of its tender documentation and
process including the selection criterion of a contractor are delivery sub-system specific and driven
(35).
Construction contracts design & provide menu for respective obligations. Therefore, such contracts
have to be performed by a specific contracting party under consideration: viz., by the employer
(from demand side) (like to secure construction permit; to acquire & handover project site & access
thereto; to appoint a supervision consultant (known as the Engineer); to provide design; to arrange
project finance & to pay the contract price; to take over the project if completed; to share risks
therein; and so forth) and by the contractor (from delivery side) (like to execute; to complete; to
remedy defects; to deliver the project; and to share risks therein and so forth).
The interface between the respective contractual and/or legal obligations of the contractor and of
the employer; the role of the Engineer including the role of any third party (like relevant regulatory
institutions and/or nominated sub-contractor, if any;…) in the execution & completion process of
such specific construction project shall be planned & scheduled in such critical & dynamic
document known as: Work Program (36). Such document is to be prepared & revised (if required)
by a contractor; reviewed & approved by the Engineer & serves as the basis for construction
contract management system & its process.
If there were any non-performance of their respective obligations by any contracting party (like by
the employer or the contractor) liability (37) may arise against such non-performing contracting
party and some form of relief might be available for the other contracting party.
Construction contract is not a self-managed contract. The said performance and non-
performance…process is to be managed, professionally & independently, by a specific third party
known as the Engineer (38). Such independent professional is to be appointed by the employer
under a given construction contract and notified to the contractor in due time. The role of the
Engineer is to ensure conformance of their respective obligations by the contracting parties and any
deviation there from. The role of the Engineer in a construction contract management process may
differ based on the specific project delivery sub-system.
Lack of willful compliance with contractual and/or legal liability stemming from the signed
construction contract & applicable law thereto, which has been resulted from non-performance or
otherwise… by a relevant contracting party, may lead to construction claims demanding in the
form of additional time and/or cost relief (say by the contractor from the employer) to be
determined then by the Engineer. Establishment of liability against a given contracting party
provides relief or remedial right to the other.
If there were dissatisfaction on the determination of the Engineer, the relevant & interested
contracting party may initiate a dispute management mechanism as agreed under such
construction contract (39) and/or as provided under the applicable law thereto (40).
3. Construction Law: The Formula

3.1 The Formula
Formula on
Construction Contract & Law

………………………………………………………………………………………………………………
D
+KP and/or +LP: ROLE
V…?
Developed by:
Zewdu Tefera Worke (2014),
(Engineering Contracts Lawyer)
………………………………………………………………………………………………………
3.2 Its Legend: L: Law; K: Contract; P: Persons; and/or: cumulative with/alternatively

(K and/or L); D: Delivery; R: Relationship; O: Obligation; L: Liability; E:
Enforcement; V: Variability (context) of all the above concepts (viz., LKPDROLE);
…………………………………………………………………………………………………………………………………………………………………
3.3 Its Application: LV: Law…?; KV: Contract…?; PV: Persons…?; DV:
Delivery…?; RV: Relationship…?; OV: Obligation…?; LV: Liability…?; EV:
Enforcement…?; V: Variability (context) of all the above concepts….?;
………………………………………………………………………………………………………………
3.4 Its Systems: D: Delivery System; K: Contract System; L: Legal System; P: Person
related System; R: Procurement System; OL: Construction Contract Management
System; E: Enforcement System;
………………………………………………………………………………………………………………
4. Systems derived from the Formula

4.1 Introduction
Sevenfold system has been derived from the Formula. The systems may help to, systematically,
understand virtually the entire concept, scope and dimension of Construction Law. The systems are
of the following with their respective formula letter identification: viz.,
 D: Delivery System;
 K: Contract System;
 L: Legal System;
 P: Person related System;
 R: Procurement System;
 OL: Construction Contract Management System;
 E: Enforcement System;
Let us explore each, in turn.
4.2 D: Delivery System
The very concept of construction project delivery system informs us about the division of labor, if
any, and the extent of same, between the relevant stakeholders (specially between the demand side
stakeholders & delivery side stakeholders) in a given construction project delivery process.
Two categories of construction project delivery system are recognized: viz., self-performance; and
non-self performance. Self-performance is also alternatively known as force account delivery
system/method. Here the employer plans, designs, executes, manages… a given construction project
by its own. No contract is required here. The project under consideration is regulated by all
applicable laws, indeed. Sometimes an independent professional might be engaged by project self-
executing entity for project management purposes. Thus, there is no contract management process
here.
Under non-self performance, there is a possibility of outsourcing some or virtually all project
functions to the market. It is alternatively known as outsourcing or contract method. There will be
a (construction) contract between the employer (demand side) & the contractor (delivery side)
selected from the market.
Contract method recognizes the following threefold sub-division: viz., segregated method;
integrated method; and integrated plus private financing method. Under segregated method, we
may find, for example, design-bid-build (DBB) (41) and design-build (DB) (42) delivery sub-
systems.
Under integrated method, we may find, for example, design-build-operate (DBO) delivery sub-
system.
Under integrated plus private financing method, we may, basically, find the different variants of
public-private-partnership (PPP) arrangement like build-operate-transfer (BOT); build-own-
operate-transfer (BOOT) and so forth.
From legal perspective, the first critical implication of the concept of delivery system, under
outsourcing or contract method, is its direct impact on the very structure & content of standard
conditions of construction contract. Standard conditions of construction contracts are, therefore,
based on some specific delivery sub-system.
By way of illustration, the following standard conditions of construction contract are based on
segregated method: viz., DBB & DB;
DBB-Based Standard Forms of Contracts
 The Ministry of Works & Urban Development (MoWUD) Conditions of Contract for
Construction Works (1994);
 The PPA Standard Conditions of Contract for Works (2006);
 The PPA Standard Conditions of Contract for Works (2011);
 FIDIC Red Book: First Edition (1957); Second Edition (1969); Third Edition (1977): and
Fourth Edition (1987) including its 1992 & 1996 Reprint;
 FIDIC New Red Book: Standard Conditions of Contract for Construction for Building and
Engineering Works: First Edition 1999; Second Edition 2017);
 MDB-FIDIC: Standard Conditions of Contract for Construction Harmonized Edition
(Pink Book): First Edition 2006; Second Edition 2010;
DB-Based Standard Forms of Contracts
 FIDIC Yellow Book: Conditions of Contract for Electrical & Mechanical Works including
Erection on Site: First Edition (1963); Second Edition (1980); and Third Edition (1987);
 FIDIC New Yellow Book: Conditions of Contract for Plant- Design–Build for Electrical &
Mechanical Plant, and for Building & Engineering Works: First Edition 1999; Second
Edition 2017;
The following standard conditions of construction contract are based on integrated method:
DBO-Based Standard Forms of Contract
 FIDIC: Standard Conditions of Contract for Design Build & Operate (Gold Book, 2008);
 Note: Mostly, such standard conditions of contract are relevant & applicable for process or
product-oriented construction projects;
The following standard conditions of construction contract are candidate for & may become the
basis for integrated plus private financing method:
PPP-Based Standard Forms of Contract
 FIDIC: Conditions of Contract for EPC/Turnkey Projects; Silver Book: First Edition 1999;
Second Edition 2017;
 Note; The Ethiopian Government has recently issued a specific piece of legislation which
introduces the PPP arrangement in Ethiopia; see Proc. No. 1076/2018: Public Private
Partnership Proclamation;
4.3 K: Contract System
Contract system covers threefold interrelated sub-system: viz., formation of contract sub-system;
effects of contract sub-system; and proof of contract sub-system;
Formation of Contract Sub-system
The formation of contract sub-system (43) addresses the fourfold key element required for the valid
formation of contract: viz., capacity of persons (determines with whom to deal); consent of persons
(regulates the deal exchange process); object of contract (determines the deal); and form of contract
(regulates recording of the deal), if any.
Formation of contract sub-system has a direct relationship with the procurement system (R), which
in turn, regulated, as related to public construction contract, by a specific legal regime known as
the law of public procurement (44). The relevant provisions of the law of administrative contract
(45) and other relevant laws (especially as related to source of project finance (46)) may also come
in to application.
Effects of Contract Sub-system
The effects of contract sub-system (47) takes, as its foundation, the valid formation of a
construction contract; informs the seriousness of the deal agreed between the contracting parties;
clarifies on whom the binding effects of contract is targeted; provides the scope of the deal (coming
from their agreement and the applicable law to such contract in two ways: viz., in terms of express
terms of the law to such contract (which is imperative: public policy role of the law); and implied
terms of the law to such contract (to see the gap filling role of the law)) (1675 cum 1678 cum 1731).
In terms of its scope, effects of contract sub-system address the following fourfold issue under the
Civil Code (48): viz., interpretation of contract; performance of contract; variation of contract; and
non-performance of contract. Such scope provides us and regulates the issue of performance &
non-performance of contractual and/or legal obligations.
Effects of contract sub-system thus have a direct relationship with construction contract
management system (O & L). The relevant provisions of the law of administrative contract (49) and
other relevant laws (especially as related to source of project finance) may also come in to
application. Contextualizing the application of the provisions of the general law of contract with
that of the special contract known as (public) construction contract comes here.
Proof of Contract Sub-system
The proof of contract sub-system (50) is directly related with enforcement system (E).
Claims for additional time and/or cost are allegation and they have to be proved, mostly based on
records, before the Engineer. Construction disputes have to be proved (in various means of
evidence), for example, before the dispute board or before an arbitral tribunal or before the court
of law.
The law of contract gives us various means of evidence (51): like writings or documentary proof;
witnesses (like in the form of factual witness or expert testimony); presumptions; admission or
otherwise.
If an international arbitration were held outside of Ethiopia, the lex fori arbitri (place of
arbitration) may determine the rule of evidence, indeed.
4.4 L: Legal System
Construction contract is governed under & interpreted by a specific applicable law (52), which
itself been based on some specific legal system. The two relevant legal systems are civil law legal
system and common law legal system. Based on such specific legal system, we may have a given
legal framework in a particular jurisdiction like Ethiopia. Ethiopia mainly follows the civil law
legal system alternatively also known as the continental legal system;
The implications of the concept of legal system on construction contract have to be emphasized.
The previous FIDIC standard conditions of construction contract like the 1957-1987 editions were,
entirely, based on the common law legal system. This is due to the verbatim taking of the Institute
of Civil Engineers (ICE of UK) standard conditions of construction contract by FIDIC (53).
The following fourfold consideration has to be made from our construction law perspective: viz.,
literature review; construction business overseas; bilateral source of (construction) project
financing; and foreign enforcement proceeding.
Literature Review
Internationally, most literature on construction law & contract are written based on the principles
of common law legal system. Their application to our construction industry context has to be seen
carefully, by all stakeholders, from our legal system perspective.
Overseas Business
The main goal of the Ethiopian construction industry policy is to make the industry competitive say
by looking for and investing in construction business overseas. The destination country legal system
has to be identified & carefully reviewed with a view to avoid or minimize construction business
risk stemming from such legal system (if it were that of common law legal system).
Source of Finance
The source of finance for a given construction project could be from a given foreign source by way
of bilateral arrangement. If, as a part of such financing agreement, the applicable law to a given
construction contract were to be based on a legal system which is different from our own, serious
consideration has to be made to see any risk stemming there from.
Enforcement Proceeding
In case of foreign arbitral award, the enforcing court might be working based on the principle of
common law legal system. This has to be taken in to consideration whether or not the Ethiopian
party in such proceeding being an award-creditor or an award-debtor.
4.5 P: Person related System
Construction & related contracts are between persons (54). Laws are enacted to impose obligations
on persons (55). Persons are of two categories: viz., natural persons; and juridical persons. Such
persons may find themselves in the construction demand side; in the delivery side and/or in the
other stakeholders’ side, as appropriate.
States are also regarded by law as persons based on their domestic law (56); and states are also
international persons as per international law (57). The latter is relevant in terms of our discussion
as related to bilateral (project financing) arrangement: viz., State to State, if applicable.
Juridical persons are of threefold: viz., public institutions; corporate entities; and voluntary
organizations. Public institutions could be domestic or international. Domestic public institutions
(58), as part of the broader concept of State organs, are within the structure of the federal
government; the regional states; and the two chartered city administrations. They may represent
the demand side or other stakeholder’s side, as appropriate.
International institutions or organizations (appearing on demand side) could be of the following:

viz., bilateral (like Embassies in Addis); regional organizations in Ethiopia; continental
organizations in Ethiopia (like AU; EU;); and global institutions in Ethiopia (like UN; ECA;).
International organizations are persons as per the specific international legal instrument (treaty or
convention or otherwise) created by the States (59). They may appear as demand side stakeholders
(mostly as related to building construction projects). International organizations may also appear
as other stakeholders like in case of multilateral development banks (like the World Bank) in
providing the project finance based on specific international (multilateral) loan agreement.
Corporate entities could be public or private; local or foreign. Public corporate entities are public
enterprises or corporations generally governed under the law of public enterprises (60). They may
appear as demand side or delivery side stakeholders, as appropriate.
Private corporate entities could be private limited companies or share companies or otherwise (61).
Local (private) corporate entities are, basically, owned by Ethiopian nationals (or those persons
treated as nationals) as per the applicable investment law. They may appear as demand side or
delivery side stakeholders, as appropriate.
Foreign corporate entities are of two types: viz., investors (on demand side as related to investment
in manufacturing industry; extractive or mining industry; agriculture sector; or services industry
and so forth by way of foreign direct investment (FDI) or otherwise). Whereas, foreign corporate
entities (on delivery side) could be foreign contractors or foreign consultants as regulated by
relevant investment law and construction law.
Voluntary organizations like non-governmental organizations (NGOs) could be local or

international (62) and mostly appearing on demand side.
Natural persons may appear on demand side (like for housing construction) or delivery side (like
construction professionals or otherwise). Such professionals could be nationals or foreign.
Such relevant persons may have different designation & status based on a given construction
phase: like project owner or proponent (from demand side) during project planning and/or
environmental impact study phase; bidders (from delivery side) during procurement phase;
contracting parties (both demand side & delivery side) during the currency of a construction
contract; negotiating parties or disputing parties; during construction disputes settlement or
disputes resolution phase or process, respectively;
Other stakeholders may appear as regulatory institutions (63); planning institutions (64); financing
institutions (65) (domestic, or international: like bilateral or multilateral)); project affected persons
(66); or otherwise;
4.6 R: Procurement System
Procurement system provides a process how to regulate the bidding process; and how to transform
a pre-contractual (legal) relationship between demand side & delivery side stakeholders in to a
contractual and legal relationship with that of the winning delivery side stakeholder like the
contractor.
Based on the law of procurement and standard bidding documents (SBD), such specific process is
managed & regulated by such an administrative or procedural document known as Instructions to
Bidders including other relevant documents (67).
Procurement system has a direct relationship with contract system (K) especially with that of
formation of contract sub-system.
Procurement system has a direct relationship with delivery system in terms of the project
documentation (like based on DBB or DB or otherwise) & the content of tender documentation
including competition base and selection criterion of the delivery side stakeholder (like the
contractor).
The current federal government procurement system is, mainly, based on design-bid-build delivery
sub-system (68).
The application of the following specific laws has to be complied with (by a specific demand side
stakeholder like the employer as Public Body or Public Project Executing Agency) before indulging
itself in to a specific procurement process: viz.,
 project screening & qualification for budgeting: the law of the Federal Government Public
Projects Administration & Management System Proclamation; see Proc. No. 1210/2020;
 budget appropriation: see the law of the specific (capital) budget appropriated for specific
Fiscal Year;
 (capital) budget approval & management: the law of Financial Administration of the
Federal Government; Proc. No. 648/2009 cum all regulations; directives;..;
Such laws clearly regulating the respective role of other stakeholders (within State organ like the
legislative & the executive) as related to a given construction project.
The law of procurement & its system/process shall then come in to picture for expenditure (capital
budget outlet) purpose.
4.7 OL: Contract Management System
The construction contract management system has a direct relationship with the contract system
(K) in terms of its effects of contract sub-system (69).
Construction contract management system has a direct relationship with a specific delivery sub-
system (D) since the base & scope of performance of obligations or non-performance of same being
related with such selected & agreed delivery sub-system.
Construction contract management system is composed of threefold interrelated sub-system: viz.,
 the performance sub-system; which is represented by obligations (O);

 the non-performance sub-system (70); which is represented by liability (L) and remedial
rights regime associated with such liability; and
 the conformance sub-system; which invites a third party (known as the Engineer) to such
contractual framework for the management process of the two sub-systems., viz.,
performance sub-system & non-performance sub-system (O & L).
Performance of obligation is directed towards realization of respective legitimate expectations of

the employer and of the contractor; and the non-performance of some or any aspect of such
obligation may put such expectation in to question and such question is going to be addressed by
way of establishment of liability against the non-performing contracting party and by providing
remedial rights (contractual and/or legal relief) in favor of the performing (non-defaulting)
contracting party.
4.8 E: Enforcement System
The enforcement system, without prejudice to prevention of construction claims and/or disputes, is
composed of two sub-systems: viz., the construction claims management sub-system (71); and the
construction disputes management sub-system (72).
The two sub-systems attempt, somehow, to formally establish liability against the non-performing
party and provide remedial right or relief to the performing contracting party (known as the
claimant/disputant). Indeed, the causes for construction claims are many and may not confined to
non-performance only (73).
Enforcement system is directly related with the contract system in terms of its proof of contract sub-
system aspect (to establish allegation) and with the applicable law to such contract in terms of the
legal remedial rights arising out of or in connection with such contract.
Whether or not the legitimate expectation of the claiming or negotiating or disputing parties has
been realized is a permanent challenge. This is dependent on multi-fold factors, indeed.
The construction claims management sub-system is to be managed by the Engineer. Respective

claims are to be prepared by a specific claimant (viz., the contractor or the employer) and
submitted to the Engineer. The Engineer considers the merit, and if so, the quantum, of such claims
& provides its determination on such claims based on the signed construction contract, if justified.
Construction claims mostly focus on request for additional time and/or cost (74).
The construction disputes management sub-system may follow two alternative or cumulative routes
or methods: viz., alternative disputes resolution (ADR) sub-method (75) or non-ADR sub-method
or alternatively known as litigation (76).
ADR (77), in terms of construction disputes management sub-system dichotomized in to two broad
categories or sub-methods: settlement (non-judgmental) sub-method; and judgmental sub-method.
Construction disputes settlement sub-method may include direct negotiation or assisted negotiation
in the form of construction disputes conciliation or mediation or otherwise. Settlement outcome, if
any, is interest-based. Due to the presence of public interest, the settlement process as related to
public construction contract, the fivefold key issue have to be considered always & carefully (78).
Judgmental sub-method may include dispute board system (alternatively also known as
construction adjudication); and construction arbitration. The judgmental sub-methods outcome
including litigation is right-based. The right-based outcome is based on the following fourfold
parameter: viz., (construction) contract; (construction & related) law; evidence; and argument
based on such contract; law; and organized & submitted evidence.
With the exception of public construction contracts financed by multilateral institutions or

arranged from bilateral source, the use of ADR system as related to disputes originating from
public construction contract (also known as administrative contract) is prohibited or limited as a
matter of public policy and law (79)(80).
The issues during claims management process & disputes management process is largely impacted
by the specific delivery sub-system selected for the project and agreed under the contract.
5. Conclusions
I may draw the following general conclusions from the discussion above.
 Development: Construction itself is an integral part of the country’s overall social &
economic development process; and serves as a means to improve the socio-economic living
standard of citizens; to change image of the country; and to ensure safe & sustainable
development through safe construction; and sustainable design & sustainable construction;
 Evolving: Construction Law is yet an evolving “body of law” in Ethiopia; and may
embrace the relevant laws of Ethiopia; the relevant laws of other countries; and/or some
relevant aspects of public international law;
 Interdisciplinary: Construction Law is an interdisciplinary subject, which requires
knowledge from different but relevant fields: like (relevant) engineering; environment; law
(including Construction Contract); economics; business; (construction) project
management; (construction) technology; and so forth
 Eclectic: From legal perspective, Construction Law is an eclectic subject since it requires
relevant normative rules & their application both from public law regime and/or private
law regime, as appropriate;
 Public Interest: Construction Law basically represents & preserves public interest;
delivery side stakeholders design and/or construct the required physical infrastructure for
the demand side stakeholders; the demand side stakeholder cause to design & construct
such infrastructure not directly for itself but for the benefit of the general public (save
private properties);
 Contract; Construction Contract is the last operational & legal document which
documents & communicates the respective legitimate expectations of the contracting parties
coming from demand side stakeholders (viz., in terms of value for money); and delivery side
stakeholders (viz., in terms of value creation for gain known as profit);
 Competing Interest; For the lawyers, the possible divergence between such competing
interests of the respective stakeholders (specially between demand side & delivery side
stakeholders), expressed in terms of value for money vs. profit, respectively, is the source of
conflict between such stakeholders, which requires informed & proactive legal advice
and/or action; early engagement of (construction) lawyers in such process is worth to
consider by all relevant stakeholders with a view to help achieve their respective legitimate
expectation; or prevent conflicts or efficiently & professionally manage same;
 Complexity: The training has shown the level of reasonable complexity to understand
Construction Law in terms of its concept, scope and dimension including the interface of
Construction Law with other relevant field of studies;
Note: Based on the Formula, the Course on Construction Law, at graduate level, requires
two years full time learning;
Sources Consulted & to be Consulted

………………………………………………………………………………………………………………
1) Different Literature Sources on Construction Law

1.1 see Paula Gerber: The Teaching of Construction Law & the Practice of Construction
Law: Never the Twain Shall Meet? Construction law is an umbrella term that covers all
the legal principles relating to the construction of structures on land. It is an extremely
broad expression, encompassing the law relating to demolishing as well as to building.
1.2 see John Uff : Construction Law, Twelfth Edition, Sweet & Maxwell, 2017: According
to Uff: The term “construction law” is now universally understood to cover the whole
field of law which directly affects the construction industry and the legal instruments
through which it operates. However, construction law extends well beyond the law as
such. Efficient & workable construction contracts require that the needs of the
construction process should be taken in to account by applying the principles of
management. Construction contracts must also take account of disputes and their
resolution. Construction law is, thus, an interactive subject in which both lawyers
construction professionals, including managers, have an essential part to play.
1.3 see Wikipedia on Construction Law: Construction law is a branch of law that deals
with matters relating to construction, engineering, and related fields. It is in essence an
amalgam of contract law, commercial law, planning law, employment law and tort.
Construction law covers a wide range of legal issues including contract, negligence,
bond & bonding, guarantees and securities, liens and other security interests, tendering,
construction claims and related consultancy contacts.
2) see the FDRE Constitution Article 90: Social Objectives; list of some of social policies (like
on education; health; housing; water supply;); Digest of Ethiopia’s National Policies,
Strategies and Programs, Edited by: Taye Assefa (2010), Forum for Social Studies, pp 1-
126
3) see the FDRE Constitution Article 89: Economic Objectives; see also list of some of
economic policies; Digest of Ethiopia’s National Policies, Strategies and Programs, Edited
by: Taye Assefa (2010) Forum for Social Studies, pp 129-336
4) see the FDRE Constitution Article 44 (1): Environmental Rights cum Proc. No. 300/2002
Environmental Pollution Control Proclamation;
5) see the FDRE Constitution Article 43 (1): Right to (Sustainable) Development cum Proc.
No. 299/2002 Environmental Impact Assessment Proclamation;
6) see the Economic Policy of Ethiopia; which is expected to provide a framework about the
role of government (alone or in partnership with private capital…) and the private sector
(in terms of domestic capital and/or foreign capital) in the economy;
7) see the Investment Policy of Ethiopia (which provides direction who invests in which
economic sector;) cum the investment implementation laws viz., Investment Proclamation:
Proc. No. 1180/2020 cum Investment Incentives and Investment Areas Reserved for
Domestic Investors Regulation No. 270/2012 cum Investment Regulation No. 474/2020;
other relevant government investment directives;
8) see the Environmental Policy of Ethiopia (1997); which provides direction how to ensure
safe & sustainable development in terms of managing natural resources and physical
environmental resources; such policy has also international dimension like as related to
climate change or otherwise; see also list of some of environmental policy related
documents; under Digest of Ethiopia’s National Policies, Strategies and Programs, edited
by: Taye Assefa (2010) Forum for Social Studies pp 337-369;
9) see Proc. No. 299/2002: Environmental Impact Assessment Proclamation; this law requires
to undertake strategic impact assessment (SIA) on international agreements; and on
strategic documents, as well; the most candidate document for SIA study (in literature too)
are known as PPP documents; representing development policy (P); development plan (P);
and development program (P);
10) see Proc. No. 299/2002: Environmental Impact Assessment Proclamation; based on such
law environmental impact assessment (EIA) has to be undertaken at required construction
project level; the law on integrated environmental pollution control has to be considered as
well here; see Proc. No. 300/2002; Environmental Pollution Control Proclamation;
11) see the Construction Industry Development Policy of Ethiopia (2012);
12) see Proc. No. 1263/2021 the Proclamation which provide the Powers & Duties of the FDRE
Executive Organs: see Article 31 Ministry of Urban & Infrastructure; Regulation No.
289/2013 the regulation which establishes the Construction Management Institute (formerly
recognized as Ethiopian Construction Project Management Institute); Regulation No.
417/2017, the regulation which establishes the Construction Industry Council; Regulation
No. 439/2018, the regulation which establishes the Ethiopian Construction Authority
(formerly recognized as Construction Works Regulatory Authority);
13) the governance aspect of the Construction Industry is to be led by the Construction
Industry Council; all relevant stakeholders identified in the paper are members to such
governance structure; see Regulation No. 417/2017;
14) threefold government level: viz., at federal government level; at national regional states
level; and at the two chartered city administrations level (viz., Addis Ababa & Dire Dawa);
regional states & such cities do have their own construction industry related laws; structure
& governance;
15) see the Civil Code under the law of administrative contract; employer is recognized as an
administrative authority; see Article 3131-3206 cum 3244-3296; see Proc. No. 649/2009, the
Ethiopian Federal Government Procurement & Property Administration Proclamation
cum the PPA (2011) standard form of contract for works, the employer is recognized under
such procurement legislation and standard conditions of construction contract as Public
Body; see Proc. No. 1210/2020, the Federal Government Public Projects Administration and
Management System Proclamation; employers are recognized as Project
Executing/Implementing Organs; twofold institutions have been identified: viz., federal
government executive organs; and public enterprises;
16) see under the Civil Code consultants are recognized as professionals; see Article 2632-2639
cum 2610-2631; in a specific contractual arrangement, they may be identified as design
consultants; or supervision consultants; they are required to provide relevant consulting
services; see also Proc. No. 649/2009: Article 2 (4): the definition on Consultancy Service;
17) see the Civil Code 3131-3206 cum 3244-3296 as related to public construction contract; and
2610-2631 cum 3019-3040, as related to private construction contract, such construction
companies are recognized as contractors; they are required to provide services as related to
Works (viz., construction) as defined under Article 2 (3) of Proc. No. 649/2009; under PPA
(2011) such companies are identified as contractors;
18) like companies engaged in construction management or capacity building (training)
activities;
19) they are: The Construction Industry Council; the Ministry of Urban & Infrastructure; the
Construction Management Institute; the Ethiopian Construction Authority;
20) The whole socio-economic development process & result, in terms of physical
infrastructure, from Construction Law perspective, is aimed to benefit the general public;
this is the origin of public interest in terms of Construction Law;
21) There are some specific constitutional issues coming in to picture as related to Construction
Law: like right to property; issue of non-displacement; right to prior consultation; right to
prior & adequate compensation; international agreement (like as related to financing
(multilateral or bilateral) or environmental or technical assistance); the principle of
transparency as related to procurement process; the right to justice (that might be elated to
construction claims and/or disputes); and so forth;
22) see under the Civil Code the Law of Administrative Contract; 1675-2026 cum 3131-3206
cum 3244-3296, as related to public construction (works) contract; which is connected with
the project screening & management law; budget law; financial administration law;
procurement law and so forth;
23) see under the Civil Code: Article 1676 cum Book V: Special Contracts (2266-3346) cum all
other applicable laws like the Commercial Code; the Maritime Code; the Labour Law; the
Law of Construction Equipment Lease; and so forth;
24) see under the Civil Code under the law of contract of public works: Payment of Price:
Article 3261-3273; cum PPA (2011) GCC Clause 63 (1) (a) and Clause 63 (1) (b), unit rate
contract; and lump sum contract, respectively;
25) see the Flow Chart developed by myself entitled: Conceptual Framework on Construction
Contract & Law; everything has been addressed there from the concept of Deal; deal
represents the project & the respective obligations of the contracting parties (legally) under
a given construction contract and/or applicable law thereto; the Deal Non-performance
Management represents the broad concept of “deal spill over management”, which leads us,
without prejudice to efforts required to prevent same, to conflict management as related to
a given construction contract; such management categorized in to twofold systems: viz.,
claims management & disputes management; and it has a direct relationship with the
Formula on Construction Contract & Law; designated with the letter “E”;
26) see Proc. No. 1210/2020: read specifically Article 7: Project Cycles; threefold cycle: pre-
implementation; implementation; and post-implementation cycle;
27) see FIDIC New Yellow Book: GCC Sub-clause 1.1.1.5: Employer’s Requirements (its
definition);
28) like the Ethiopian Code for Building Standard (ECBS), which has been replaced by Euro
Code since Ethiopia has officially adopted Euro Code; it is (in terms of project quality
requirement) an integral part of Construction Law; see Dr. Martin Cullen, Introduction to
Euro Codes, 2016; Euro Code covers the following:
 Basis of Structural Design (with no sub-division);
 Actions on Structures (10 Sub-divisions);
 Design of Concrete Structures (4 Sub-divisions);
 Design of Still Structures (20 Sub-divisions);
 Design of Composite Steel & Concrete Structures (3 Sub-divisions);
 Design of Timber Structures (3 Sub-divisions);

 Design of Masonry Structures (4 Sub-divisions);
 Geo-technical Design (2 Sub-divisions);
 Design of Structures for Earthquake Resistance (6 Sub-divisions);
 Design of Aluminum Structures (5 Sub-divisions);
29) as per Proc. No. 1210/2020: see Article 7 (3); post-implementation;
30) see the Civil Code under Article 3282: Warranty in respect of Defects in Construction; also
known as decennial liability of the contractor as related to the concept of latent defect in
construction;
31) Building Construction may include the following: viz.,
 housing/residential building construction;
 commercial building construction;
 institutional building construction;
 industrial building construction; and
 mix use building construction;
 Note: industrial building construction has direct relationship (as an input) with
industrial construction project;
32) Engineering Construction: also known as in literature heavy engineering construction or
civil engineering construction or infrastructure construction and may include the following
four sub-categories: viz.,
 transport infrastructure construction: viz., highway (also covers rural road network
urban road network; express way/highway network;); railway construction; airport
construction; harbor/seaport construction; water way construction; …
 water & sanitation:
 water infrastructure construction: water source: surface water (like for dam
construction) or sub-surface (ground) water; purpose: for supply (requires
transmission & distribution network construction;) or irrigation (requires
primary; secondary; tertiary… canal construction & drainage structure
construction;)
 sanitation infrastructure construction: like sewer network construction
trunk line or secondary line construction; sludge drying bed construction;
 energy infrastructure construction: based on sources of energy: viz., hydropower;
solar energy; wind power; geothermal energy; nuclear energy; tidal power, if any;
plus transmission & distribution network installation/construction (grid based or

otherwise); and
 communication infrastructure construction; like as related to telecommunications
network infrastructure construction; radio station construction; television station
construction; and so forth;
 Note; the FIDIC New Red Book (its 1999 & 2017 editions) and the MDB-FIDIC (its
2006 & 2010 editions) standard conditions of construction contract are applicable to
Building & Engineering Works Construction; such projects are service-oriented, if
completed;
33) Industrial Construction (process or utility related project; it is product-oriented project)
may include the following sub-categories: viz.,
 manufacturing or industrial plant erection project;
 power generation plant erection project;
 water treatment plant erection project;
 waste water treatment plant erection project;
 ground water development (drilling) project;
 Note: without prejudice to its application for Building & Engineering Works
Construction project, the FIDIC New Yellow Book (its 1999 & 2017 editions), is the
default standard conditions of construction contract applicable to Electrical &
Mechanical Engineering viz., Plant Project;
34) see all the applicable laws governing physical or natural persons; juridical persons; see, for
example, the Civil Code Book I: Persons; proclamations establishing public institutions;
regulations establishing public institutions (like universities); public enterprises; the law of
business licensing & registration; the law of civil societies; and so forth;
35) see Proc. No. 649/2009; it is a good illustration for this purpose;
36) see PPA (2011) GCC Clause 41: Program for Implementation of Tasks; see also MDB-
FIDIC (2006 & 2010); FIDIC New Red Book (1999 & 2017) GCC Sub-clause 8.3: Program;
Note: the contractor, during bidding stage, is required to prepare & submit its Tender
Program; Construction Engineering professionals & Construction lawyers are required to
give utmost attention to this document known as: Work Program; such document is very
important for project management; contract management; claims management; and
disputes management; Discussion: There is a constant issue whether or not such document
(viz., Work Program) being an integral part of a construction contract document;
37) The question of liability has to be seen very broadly, indeed; in the broader context liability
may include, as appropriate, the following threefold type of liability regime; civil liability
(viz., in terms of: expectation; compensation; restitution;); criminal liability (in case where
there is injury to persons or death; economic loss or damage to property and/or
environmental harm as sanctioned by the Criminal Code and other relevant laws providing
criminal liability/sanction, if any, due to defect in construction design; defect in
construction; mal-management in facility operation or otherwise; and administrative
liability (like as related to suspension or revocation of license; payment of fine;…);
38) see PPA (2011) GCC Clause 12: Engineer & Engineer’s Representative; see also MDB-
FIDIC (2006 & 2010); FIDIC New Red Book (1999 & 2017) FIDIC New Yellow Book (1999
& 2017) GCC Clause 3: The Engineer;
39) see, for example, GCC Sub-clause 20.1: Contractor’s Claims; Sub-clause 2.5: Employer’s
Claims under MDB-FIDIC (2006 & 2010); FIDIC New Red Book (1999 & 2017);
40) see under the Civil Code: Effects of Nonperformance; Article 1771-1805 (regulating specific
performance; cancellation of contract; general damages); known as legal remedies;
41) DBB: means the employer has designed the project (D); the contractor is selected through
some bidding (B) process to build (B) or to construct the project; for example, the cover of
these standard conditions of construction contracts viz., MDB-FIDIC (2006 & 2010); FIDIC
New Red Book (1999 & 2017) inform us who the designer of the project is: Designed by the
Employer; Note: No such clear designation as related to PPA (2006 or 2011); however, PPA
in its 2006 User’s Guide gives us information for what type of delivery sub-system its
standard form of contract will be used: “Where the Contractor is selected to do
Construction Only”; thus it is DBB;
42) DB: means that both the design (D) & building (B) or construction process is to be carried
out by the contractor; for example, the FIDIC New Yellow Book (1999 & 2017) cover page
informs us who the designer of the project is: Designed by the Contractor; PPA has no yet
standard form of contract for DB-based construction projects;
43) see under the Civil Code; 1675 cum 1678 cum 1679-1730; Formation of Contract;
44) see Proc. No. 649/2009: The Federal Procurement Law cum see also Civil Code 3147-3169;
Procedure for the Allocation of Contracts by Tender;
45) see under the Civil Code as related to the law of Administrative Contract: Article 3134-
3171: Formation of (an administrative) Contract cum Article 3246-3249: Formation of
(public works) Contract;
46) The source of finance for a given construction project may bring its own implications on
the procurement scale & process; delivery sub-system; standard form of contract; dispute
management mechanisms; see multilateral (M) development (D) banks (B): MDB-FIDIC
(2006 & 2010) in case of multi-lateral source of finance; if the project financing were
directly from government treasury Proc. No. 649/2009 shall apply for the federal
procurement process; and PPA (2011) shall apply as standard form of contract; if the
financing were from a bilateral source (like from a given foreign country) it may
recommend some form of procurement scale & process; and so forth
47) see under the Civil Code: Article 1731: Principle; re; Effects of Contract;
48) Effects of Contract regulated under the Civil Code; see Article 1675 cum 1678 cum 1679-
1730 cum 1731 cum 1732-1805;
49) see the Civil Code under the Law of Administrative Contract; Effects of Contract 3172-
3206 cum 3250-3282: Normal Performance of (public works) Contract;
50) see under the Civil Code; Proof in Relation to Contracts: Article 2001-2026;
51) see under the Civil Code; Article 2002; Means of Evidence;
52) see PPA (2011): GCC Clause 8: Governing Law; see also GCC Sub-clause 1.4: Law &
Language under MDB-FIDIC (2006 & 2010); FIDIC New Red Book (1999 & 2017) FIDIC
New Yellow Book (1999 & 2017); under those GCCs, there is a definition on the concept of
Laws: see Sub-clause 1.1.6.5;
53) see Nael G. Bunni., FIDIC Form of Contract, 2005; for example, the origin of the concept of
liquidated damages is in the common law legal system, which has already been incorporated
in our standard form of construction contract; see PPA (2011) GCC Clause 27; Liquidated
Damages; the recent FIDIC versions (1999 & 2017) cited above referring to the concept of
“Delay Damages” and no more to liquidated damages; further, the concept (doctrine) of
privity of contract; and the concept of nominated sub-contractor are also common law
concepts; see under GCC Clause 5; Nominated Sub-contractor; under MDB-FIDIC (2006
& 2010); FIDIC New Red Book (1999 & 2017); PPA has yet no clause on nominated sub-
contract;
54) see all contracts; they are between persons; see the Civil Code Article 1675: Contract
Defined; such persons, upon conclusion of the relevant contract, become contracting
parties; see Article 1731: Principle: re; Effects of Contract; see GCC Clause 1.1.2: Parties &
Persons; MDB-FIDIC (2006 & 2010); New Red Book FIDIC (1999 & 2017);
55) see all the relevant legislations or regulations, they apply to persons; see the definition given
to person in such legal instruments: person means natural person & juridical person;
56) see the Civil Code; Article 394: The State

57) see Ronald Portmann, Legal Personality in International Law, Cambridge University Press;
see also The Vienna Convention on the Law of Treaties (1969); governing treaties between
states;
58) Domestic public institutions may include the legislative organ; the executive organ; and the
judiciary organ at federal; at regional; and at local (the two chartered city administrations
viz., AA & Dire Dawa) level;
59) see International Organizations (Teaching Material) Prepared by; Mizanie Abate &
Alemayehu Tilahun, 2009; see also Legal Personality of International Organizations (No
Author identified); see also The Vienna Convention on The Law of Treaties Between States
& International Organizations (1986);
60) public corporate entities are governed by the law of public enterprises; see Proc. No.
25/1992 (the Public Enterprises Proclamation) cum the specific legal instrument (or
regulations) issued to establish & provide legal personality to such enterprises;
61) Private corporate entities like construction companies (like the would-be PLC) follow the
following two paths to secure their legal personality: professional certification &
registration ( from the Ethiopian Construction Authority; see under Proc. No. 1263/2021
cum Regulation No. 439/2018); commercial registration & business licensing (from the
Ministry of Trade & Regional Integration; see Proc. No. 1263/2021 cum Proc. No.
1150/2019 cum relevant Regulations there under;); the last registration certificate gives
legal personality to such construction company;
62) voluntary organizations secure their legal personality through the act of registration; see
the Law on Charity & Civil Societies;
63) like for building or construction permit; environmental clearance; business regulation;
procurement process regulation;
64) at the federal level like the Ministry of Planning & Development as per Proc. No. 1263/2021
cum Proc. No. 1210/2020;
65) Project financing institutions like Ministry of Finance as per proc. No. 1263/2021 cum Proc.
No. 648/2009 (in terms of capital budget management); other sources for project financing
identified as per the current budget law of the country; international source of project
financing from bilateral source or from multilateral source as negotiated, secured &
managed (upon ratification of such loan by the House of Peoples Representative) by the
Ministry of Finance;
66) Project Affected People (PAP) are critical stakeholders; their economic (inclusive of social
& cultural) interest might be impacted largely by expropriation proceeding in terms of
their property rights; issue of displacement; issue of prior consultation, if displacement
were allowed; issue of prior & adequate compensation; resettlement; state assistance; are
some of the issues; PAP could be natural persons (like urban dwellers; pastoralists;
farmers;…) or institutions (like public utilities (like institutions which establish & manage
the following infrastructure water; power; telecommunications; sewerage;) or otherwise);
see also Proc. No. 1161/2018: Expropriation of Landholdings for Public Purpose &
Payment of Compensation and Resettlement cum Regulation No. 472/2020: Expropriation,
Valuation, Compensation and Resettlement Regulation; see also Proc. No. 721/2011; Urban
Land Lease Proclamation; including all relevant regional rural land administration laws; if
the source of project finance were like from multilateral source, the requirements are so
stringent to be complied with in terms of social safeguard & other relevant policies;
67) see Proc. No. 649/2009, the federal procurement law; the Federal Public Procurement
Directive (2010); the Financiers Guideline; Standards Prepared based on such above
documents; the relevant Procurement Manual;
68) see Proc. No. 649/2009: The Public Procurement & Property Administration Re-
establishment Proclamation, which regulates the federal procurement system & process;
69) Effects of Contract regulated under the Civil Code; see Article 1675 cum 1678 cum 1679-
1730 cum 1731 cum 1732-1805; cum see also the Civil Code under the Law of
Administrative Contract; Effects of Contract 3172-3206 cum 3250-3282: Normal
Performance of (public works) Contract;
70) see under the Civil Code: Effects of Nonperformance; Article 1771-1805 (regulating specific
performance; cancellation of contract; general damages); known as legal remedies; cum
under the Law of Administrative Contract; Article 3194-3200 cum 3288-3296 under the
law of public works contract;
71) Construction claims management sub-system is recognized under standard conditions of
construction contracts: see PPA (2011) GCC Clause 69; Clause 73; and Clause 74 cum
Clause 12…; see also under MDB-FIDIC (2006 & 2010) & FIDIC New Red Book (1999 &
2017) under GCC Clause 2.5; Clause 20.1 cum Sub-clause 3.5 including all other relevant
clauses of such standard contracts;
72) Construction disputes management sub-system is recognized under standard conditions of
construction contracts: see PPA (2011) GCC Sub-clause 26.5 and Sub-clause 26.6; see also
under MDB-FIDIC (2006 & 2010) & FIDIC New Red Book (1999 & 2017) under GCC Sub-
clauses 20.2-20.4 (construction adjudication or dispute board system); clause 20.5 (amicable
settlement); and clause 20.6 (arbitration);
73) see Zewdu Tefera Worke, Public Construction Contract & Construction Disputes
Management System: with Special Emphasis to Public Interest (April, 2018 unpublished);
Other causes for construction claims and/or disputes other than non-performance may
include the following threefold category; viz., poor documentation; exercise of right; and
occurrence of external risk event;
 poor documentation (like due to poor quality of all relevant project documentation;
tender documentation; and contract documentation; poor risk allocation in
contract documents; poor scope determination of contract documents; poor
structuring of contract documents in terms of their vertical relationship (or priority
of contract documents));
 exercise of right: like due to variation in the works; or deceleration of progress of
works measure; or acceleration of works measure; or suspension of works measure;
or act of termination;…); and
 occurrence of specified risk event: like due to market driven risks; differing site
conditions driven risks; or force majeure driven; act of government driven
risks;…);
 see also the Civil Code under the Law of Administrative Contract: Unforeseen
Circumstances; Article 3183-3189; Acts of Government: Article 3190-3193;
 see also the Civil Code from public works contract perspective; Unforeseen
Difficulties: Article 3286-3287;
74) see PPA (2011) GCC Clause 12 (The Engineer & Engineer’s Representative) cum Clause 69
(Contractor’s Financial Claims); Clause 73; and Clause 74 (addressing only contractor’s
claims viz., extension of time claims); see also under MDB-FIDIC (2006 & 2010) & FIDIC
New Red Book (1999 & 2017) Sub-clause 2.5 cum all applicable clauses & applicable law
thereto (Employer’s Claim); and Sub-clause 20.1 cum all applicable clauses & the
applicable thereto (Contractor’s Claims) cum Clause 3 (The Engineer) cum Sub-clause 3.5
(Engineer’s Determinations);
75) ADR is recognized under MDB-FIDIC (2006 & 2010) & FIDIC New Red Book (1999 &
2017); see GCC Sub-clause 20.2-20.4; 20.5; and 20.6; dispute board system; (amicable)
settlement of disputes; and arbitration, respectively;
76) Non-ADR or litigation is recognized under PPA (2011); see GCC Sub-clause 26.5; Sub-
clause 26.6 provides arbitration (as part of ADR) for those public institutions which have
clear legal mandate to do so; construction adjudication were part of disputes management
system under PPA (2006) GCC Clause 25; under PPA (2011) GCC Clause 26 the meaning,
scope & effects of negotiation is not clear;
77) In terms of ADR the Civil Code recognizes negotiation (compromise; see under Article
3307-3317); conciliation (see under Article 3318-3324 cum 3307-3317); and arbitration (see
under Article 3325-3346);
 see also the relevant provisions under the Civil Procedure Code;
 recently a new piece of legislation has been issued entitled; Proc. No. 1237/2021:
Arbitration & Conciliation Working Procedure Proclamation; those provisions
under the Civil Code on conciliation & arbitration have been repealed & replaced
by such new legislation (see Article 78 (1)); some relevant provisions from the Civil
Procedure Code have also been repealed (see Article 78 (2)); such piece of
legislation under Sub-article 7 (7) has provided the non-arbitrability of disputes
originating from an administrative contract like in our case public construction
contract;
 Proc. No. 1234/2021: Federal Courts Proclamation has recognized & introduced a
new sub-category of ADR known as mediation in the form of Court-Annexed
Mediation; see Article 45-48;
78) Factors to be considered, as related to interest-based, are of the following; viz.,
 negotiability of the subject matter (viz., the dispute) planned to be negotiated;
 legal mandate of the negotiating party/parties (threefold dimension: to agree to
negotiate; to negotiate; and to settle);
 knowledge on the subject matter to be negotiated;
 requisite skill how to negotiate; and
 good faith to negotiate & to settle;
79) see Article 7 (7) under Proc. No. 1237/2021 (on non-arbitrability of disputes originating
from administrative contract); see PPA (2011) under GCC Sub-clause 26.6 (conditional
arbitration);
80) Ethiopia has just recently ratified the 1958 New York Convention on Recognition &
Enforcement of Foreign Arbitral Award through Proc. No. 1184/2018;

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Training Material on: Construction Law

Ethiopian Construction Works Corporation

Addis Ababa Justice Bureau Professionals

Zewdu Tefera Worke,

(Engineering Contracts Lawyer)

Legal Consultant & Trainer, ECWC

Construction Law & its Formula:

Special Emphasis to its Key Systems

 Consulted Sources 12 Pages

Construction Law & its Formula:

Special Emphasis to its Key Systems

Zewdu Tefera Worke

2. Construction Law: Conceptual Background

Objectives: Constitutional Foundation

Construction Demand: Physical Infrastructure

There is a construction demand with a view to realize, in part, required socio-economic

Construction Delivery: Construction Industry

Stakeholders: Threefold Category

 demand side stakeholders: recognized mainly as project owners; clients; employers or

Management: Law and/or Contract

 works contract; like public or private construction contract; local or international

land transport; air transport or combination thereof;); or otherwise…); or employment

The discussion has to be seen from public construction project perspective.

Construction, Construction Law, Construction Contract

3. Construction Law: The Formula

Construction Contract & Law

Zewdu Tefera Worke (2014),

(Engineering Contracts Lawyer)

3.2 Its Legend: L: Law; K: Contract; P: Persons; and/or: cumulative with/alternatively

System; E: Enforcement System;

4. Systems derived from the Formula

Let us explore each, in turn.

4.2 D: Delivery System

DBB-Based Standard Forms of Contracts

DB-Based Standard Forms of Contracts

DBO-Based Standard Forms of Contract

PPP-Based Standard Forms of Contract

4.3 K: Contract System

Formation of Contract Sub-system

Effects of Contract Sub-system

Proof of Contract Sub-system

4.4 L: Legal System

4.5 P: Person related System

International institutions or organizations (appearing on demand side) could be of the following:

Voluntary organizations like non-governmental organizations (NGOs) could be local or

4.6 R: Procurement System

4.7 OL: Contract Management System

Construction contract management system is composed of threefold interrelated sub-system: viz.,

 the performance sub-system; which is represented by obligations (O);

Performance of obligation is directed towards realization of respective legitimate expectations of

4.8 E: Enforcement System

The construction claims management sub-system is to be managed by the Engineer. Respective

With the exception of public construction contracts financed by multilateral institutions or

Sources Consulted & to be Consulted

1) Different Literature Sources on Construction Law

 Design of Timber Structures (3 Sub-divisions);

plus transmission & distribution network installation/construction (grid based or