FIDIC

Nominated Subcontractor Defects Under FIDIC — Main Contractor Liability

The main contractor is responsible for all work on site — including work by nominated subcontractors. Where a subcontractor’s work is defective, the main contractor remains liable to the employer, creating the need for strict back-to-back warranties and defect management procedures.

6 min read · Updated 23/05/2026

In this article

1. Nominated Subcontractors — Definition and Appointment
2. Main Contractor Warranty for Subcontractor Work
3. Defects — Notification and Remediation
4. Main Contractor’s Recourse Against Subcontractor
5. Back-to-Back Provisions and Warranty Assignment
6. Insurance and Indemnity

Key takeaway

The main contractor is fully liable for nominated subcontractor defects — the employer’s contract is with the main contractor, not the subcontractor. The main contractor’s recourse against the subcontractor depends entirely on the terms of the subcontract. Back-to-back warranty provisions are essential to ensure the main contractor can pass down its obligations to the subcontractor.

1. Nominated Subcontractors — Definition and Appointment

A nominated subcontractor is a specialist contractor appointed by the employer (or by the engineer on the employer’s behalf) to execute a specific part of the works. The nomination is made through the main contractor: the employer selects the subcontractor, and the main contractor is contractually obliged to enter into a subcontract with that nominated party.

Common examples: mechanical and electrical (MEP) contractors on projects where the employer has selected a preferred installer; specialist foundation contractors where the employer has insisted on a particular technique or provider; or testing and commissioning contractors nominated for specific disciplines.

The main contractor does not select nominated subcontractors — they are imposed by the employer or engineer. However, the main contractor is responsible for integrating the subcontractor’s work, coordinating with other trades, and ensuring quality compliance.

2. Main Contractor Warranty for Subcontractor Work

The main contractor’s contract with the employer typically warrants that all work — including that of subcontractors — will be completed in accordance with the contract requirements, to a professional standard, and will be fit for purpose.

This warranty is strict: the main contractor cannot disclaim responsibility for subcontractor defects on the basis that “the subcontractor is responsible — not us.” The main contractor is the point of contract with the employer. If the subcontractor’s work is defective, the main contractor is in breach.

This creates an important risk: the main contractor may be held liable for defects caused by a nominated subcontractor that the main contractor did not select and cannot easily replace. The main contractor’s only recourse is against the subcontractor, but if the subcontractor becomes insolvent or defaults, the main contractor bears the loss.

3. Defects — Notification and Remediation

When a nominated subcontractor’s work is found to be defective, the employer notifies the main contractor (not the subcontractor directly). The main contractor is then obliged to: (1) remediate the defect or cause the subcontractor to remediate; and (2) ensure that remediation is completed within a reasonable time.

The main contractor’s obligation is non-delegable — the main contractor cannot simply tell the subcontractor to fix it and then claim that the main contractor has fulfilled its obligation. The main contractor is accountable for the outcome.

If the subcontractor fails or refuses to remedy, the main contractor must either: (1) perform the remedy itself (at its own cost) and recover from the subcontractor; or (2) engage another contractor to perform the remedy and recover the cost from the subcontractor or deduct it from payments due.

4. Main Contractor’s Recourse Against Subcontractor

The main contractor’s ability to recover from the subcontractor depends entirely on the subcontract terms. If the subcontract includes robust warranty provisions (matching those in the main contract) and indemnity clauses, the main contractor can pass down its liability.

However, if the subcontract is weakly drafted — with limited warranties, short limitation periods, or caps on liability — the main contractor may have limited recourse.

Example: The main contract warrants that MEP work will be fit for purpose and maintains a 10-year warranty. If the subcontract contains only a 1-year warranty and a cap of AED 100,000, and a defect emerges in year 3 costing AED 500,000 to remedy, the main contractor has a claim against the subcontractor for only AED 100,000 (the cap). The main contractor must absorb the additional AED 400,000.

5. Back-to-Back Provisions and Warranty Assignment

To manage this risk, the main contractor should ensure that the subcontract incorporates back-to-back warranty provisions: the warranties given by the main contractor to the employer are mirrored in the subcontract.

Additionally, many contracts include warranty assignment provisions: the subcontractor’s warranties to the main contractor are assigned directly to the employer. This allows the employer to pursue the subcontractor directly (without going through the main contractor) for defects in the subcontractor’s work.

Warranty assignment protects the employer (direct recourse) and the main contractor (the employer pursues the subcontractor, not the main contractor). However, the subcontractor typically resists assignment, as it exposes the subcontractor directly to the employer (a more powerful party than the main contractor).

6. Insurance and Indemnity

The subcontract should require the subcontractor to maintain professional indemnity insurance (for design), defects liability insurance, and general liability coverage. The main contractor should be named as an additional insured or interested party on each policy.

Indemnity clauses should run both ways: the subcontractor indemnifies the main contractor for defects in the subcontractor’s work; the main contractor indemnifies the subcontractor for claims arising from the main contractor’s supervision or site management (if applicable).

Where a nominated subcontractor is appointed, the main contractor should insist on direct assignment of the subcontractor’s insurance to the main contractor (and to the employer where the contract permits). This ensures that if the subcontractor becomes insolvent, the insurance remains available to cover defect claims.

Nominated Subcontractor Liability and Risk Management

We advise on main contractor liability allocation, subcontract back-to-back drafting, warranty assignment, and defect management. Nominated subcontractor arrangements require careful contractual structuring.

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