LAWS

6.1 Compliance with Laws

The Contractor shall, in all matters arising in the performance of the Works, conform
in all respects with the provisions of the Laws and shall keep the Employer
indemnified against all penalties and liabilities of every kind for breach of any such
Laws.

6.2 Bahrain Register of Commerce

The Contractor shall comply with the Laws under which all persons and companies
engaged in business in Bahrain are required to be registered in the “Register of
Commerce”. Persons or companies not entered in the register are not permitted to
carry out business in Bahrain. The Laws require that any firm wishing to carry out
business in Bahrain shall make application to the Directorate of Commerce and
Companies’ affairs in the Ministry of Industry and Commerce of the Government not
later than one (1) month after or earlier than three (3) months before starting business.

6.3 Prevention of corruption

Any commission, advantage, gift, gratuity, reward or bribe given, promised or offered
by or on behalf of the Contractor or any employee, agent or representative or any other
person on its or their behalf to any officer, servant, representative or agent of the
Employer or of the Engineer or to any person on their behalf or on behalf of any of
them in relation to the obtaining or to the execution of the Contract or of any other
contract with the Employer shall, in addition to any criminal liability which may be
thereby incurred, subject the Contractor to the termination of its employment under the
Contract and under all other contracts which it may have entered into with the
Employer and also to the payment of any loss or damage resulting from such
cancellation. The Employer shall be entitled upon a certificate to the Engineer to
deduct the amounts so certified from any monies due to the Contractor under the
Contract or any other contract or to recover the said amounts as a debt due or partly the
one and partly the other as the Employer shall deem advisable.

INDEMNITY AND INSURANCE

7.1 Indemnity

The Contractor shall be liable for and shall indemnify the Employer and its agents
against any expense, liability, loss, claim or proceedings whatsoever arising under any
Law or otherwise in respect of personal injury to or death of any person whomsoever
or material or physical loss of or damage to any property whatsoever arising out of or
in the course of or in consequence of the performance of the Works, unless due to any
act or neglect of the Employer or of any person for whom the Employer is responsible.

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 Without prejudice to this liability the Contractor shall maintain and shall cause any
sub-contractor to maintain such insurances as are necessary to cover the liability of the
Contractor or, as the case may be, of such sub-contractor, in respect of personal injury
or death arising out of or in the course of or caused by the carrying out of the Works.

7.2 Third party insurance

Throughout the performance of the Works the Contractor shall, without limiting its
obligations and responsibilities under Clause 7.1, insure in the joint names of the
Employer and the Contractor against its liability for any death of or injury to any
person (including any employee of the Employer) or any damage or loss to any
property (including any property of the Employer) caused by or arising out of or in
consequence of the performance of the Works.

7.3 Insurance of the Works

The Contractor shall in the joint names of the Employer and the Contractor insure
against all loss and damage caused by fire, theft, lightning, explosion, storm, tempest,
flood, bursting or overflowing of water tanks, apparatus or pipes, earthquake, aircraft
and other aerial devices or articles dropped therefrom, riot and civil commotion,
subsidence, heave, vibration and weakening or removal of support or lowering of
groundwater, for their full value, plus ten per cent (10%) of the Contract Price to cover
professional fees, all work executed and all unfixed materials and goods intended for,
delivered to, placed on or adjacent to the Works and intended for the Works (except
temporary buildings, plant, tools and equipment owned or hired by the Contractor and
its sub-contractors) and in addition shall so insure in such amount all materials and
goods intended for the Works (except as aforesaid) against customary risks according
to the method of transportation.

Upon acceptance of any claim under the insurance mentioned in this Clause 7.3 the
Contractor shall with due diligence restore or replace work or materials or goods
damaged and dispose of any debris and proceed with and complete the Works. The
Contractor shall not be entitled to any payment in respect of work or materials or goods
damaged other than the monies received under the said insurance (less the percentage
to cover professional fees) and such monies as shall be paid to the Contractor under
certificates of the Engineer at the periods stated in Clause 5.

7.4 Cross liabilities clause

The policies of insurance taken out under Clauses 7.2 and 7.3 shall contain a cross-
liabilities clause indemnifying each of the jointly insured against claims made on it by
the other jointly insured.

7.5 Professional Indemnity Insurance (if applicable)

If this clause 7.5 is stated to be applicable in the Appendix to Contract the Contractor
shall take out and maintain professional indemnity insurance covering the Contractor's

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 design liability under the Contract without unusual or onerous conditions attached to it
for the Works and in the amount set out in the Appendix to Contract for any one
occurrence or series of occurrences arising out of any one event for a period beginning
no later than the date the Contractor commences the Works pursuant to Clause 3.1 and
ending ten (10) years after the date of Completion for the whole of the Works unless
the Contractor is able to demonstrate to the reasonable satisfaction of the Engineer that
such insurance is not available to organisations acting in the capacity of the Contractor
at commercially reasonable rates.

7.6 Recognised insurers

The insurance policies required under Clause 7 shall be taken out with one of the
insurance companies for the time being recognised by the Employer on terms approved
by the Employer (which approval shall not be unreasonably withheld), and the
Contractor shall ensure the continued adequacy of the insurances at all times in
accordance with the terms of the Contract.

7.7 Insurance policies

As and when required so to do by the Engineer the Contractor shall produce for
inspection by the Engineer the original insurance policies required under Clause 7 and
the receipts for payment of the current premiums (and the Contractor shall provide
copies of the same for the Employer) and in default of the Contractor so insuring or
continuing to insure as required the Employer may itself insure against any risk with
respect to which the default shall have occurred and may deduct a sum or sums
equivalent to the amount paid or payable in respect of such premiums from any monies
due or to become due to the Engineer, or recover the same as a debt due from the
Contractor. Alternatively, and at the Employer's sole discretion, the Employer may
suspend all or part of the Works by immediate notice to the Contractor until the
Contractor takes out all such insurances and the Contractor shall, during such
suspension, properly protect and secure the Work or such part or parts as far as is
necessary in the opinion of the Engineer. Any extra costs incurred by the Employer as
a result of any such suspension shall be borne by the Contractor and such suspension
shall not entitle the Contractor to an extension to the Completion Date or a claim for
unavoidable additional work or expenditure pursuant to Clauses 3.2 and 4.9 or
otherwise.

TERMINATION AND IMPOSSIBILITY

8.1 Termination by the Employer

The Employer may by notice terminate the appointment of the Contractor under this
Contract if:

8.1.1 the Contractor without reasonable cause fails to proceed diligently with the
performance of the Works or wholly suspends the performance of the Works; or

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