This article considers how US suppliers of energy equipment in Iraq should allocate performance risk when operators depart from agreed maintenance protocols. A supplier may guarantee the output or efficiency of turbines, transformers or solar inverters, while the operator later misses service intervals or uses unapproved consumables. When performance falls, neither the guarantee nor a broad maintenance exclusion answers every liability question on its own.
The framework includes the Iraqi Civil Code No. 40 of 1951, which governs contractual performance, warranties, causation and compensation, including judicial control over agreed damages; the Ministry of Electricity Law No. 53 of 2017, which defines the role of the Ministry and its companies as operators and purchasers; the Public Contracts Implementation Instructions No. 1 of 2025 for public contracts; and the Evidence Law No. 107 of 1979, which governs technical evidence and expert reports in disputes.
Making maintenance a defined contractual obligation
The maintenance protocol should be incorporated into the contract by an identifiable version, stating who must perform each task and at what intervals. A manual delivered after signing may give useful guidance without necessarily creating new contractual obligations the supplier can later enforce against the operator.
For energy and infrastructure projects in Iraq, routine servicing, specialist inspections and major overhauls should be distinguished, along with which activities need the supplier’s attendance and which the operator may perform. The performance guarantee should state the operating and maintenance conditions on which it depends, such as fuel quality, ambient conditions and grid stability, with a process for resolving conflicts between technical documents.
Linking exclusions to the affected failure
A general claim that maintenance was imperfect may not release the supplier from every obligation. Under the Civil Code, the party relying on an exclusion should show that the operator’s failure caused the particular shortfall. The missed task, the affected component and the technical consequence should be identified, and a manufacturing defect existing independently of the operator’s conduct must be analysed separately.
The evidence should distinguish:
- Required servicing from optional recommendations.
- Maintenance actually performed and by whom.
- Consumables and spare parts used.
- Operating conditions outside the agreed range.
- Defects due to design, manufacture or earlier repair.
Where several causes contributed, the analysis should explain their interaction, and Iraqi courts can apportion responsibility accordingly. The supplier’s own failure to provide a part or instruction needed for maintenance should also be examined, as it may shift responsibility back.
Iraqi operating conditions
Equipment in Iraq often operates under high temperatures, dust, fuel quality variations and unstable grid conditions. Guarantees designed for other markets may not reflect these realities. Suppliers should define the conditions behind each guarantee explicitly, and operators should ensure that maintenance intervals are adjusted for local conditions where the manufacturer recommends it, so that both sides share an accurate picture of what performance can reasonably be expected.
Giving warnings and corrective steps legal effect
The contract should state when the supplier must notify the operator of a maintenance issue and what corrective action is required. If the supplier continues servicing despite a known departure, it should record whether it reserves its position or approves a revised protocol, since silence and inconsistent instructions complicate later interpretation of the parties’ conduct.
A review of commercial contracts in Iraq should align warnings with suspension, retesting and warranty procedures. A right to suspend support is different from a right to interfere with operating equipment, and any remote restriction must be assessed against contractual authority, Iraqi law and the impact on electricity supply.
Preserving evidence when repairs cannot wait
Energy equipment may need immediate repair to prevent further damage or restore supply. The condition should be recorded before intervention, failed parts retained and the other party given a reasonable chance to inspect. Service logs and electronic monitoring data should be preserved in original form.
An agreement to repair promptly can reserve both parties’ positions on cost and liability, but the person authorised to agree that reservation should be identified. A technician’s acknowledgement of a fault is not a settlement of lost output claims or an admission that every guarantee has failed.
Calculating remedies against proven responsibility
Repair costs, performance liquidated damages and lost production raise different questions of causation and entitlement. Iraqi courts may reduce agreed compensation that is clearly excessive and decline it where no loss occurred, and liability caps must be reviewed under Iraqi law. For Ministry of Electricity contracts, the 2025 instructions also set ranges for delay damages.
Conclusion & how Etihad Law Firm can help
Performance disputes in Iraqi energy projects turn on clear maintenance obligations and good evidence of what caused the shortfall. Drafting both into the contract at the outset is the most effective protection for suppliers and operators.
As Iraq energy project lawyers for American companies, Etihad Law Firm drafts maintenance and performance provisions, advises on public contracting rules for power projects, and represents suppliers and operators in performance disputes, helping both understand the evidence needed to allocate the consequences of maintenance departures.