1999 Suite: Commentary on Clause 02 – The Employer
Clause 2 outlines key Employer obligations, including access rights, assistance with permits, and financial arrangements. Additional obligations include payment (Sub-Clause 14.7) and taking over the Works (Sub-Clause 10.1). Employer claims require notice and compliance with Sub-Clause 2.5.
Jurisdiction, Admissibility and FIDIC
An issue that often arises in international arbitrations involving the FIDIC forms of contract is whether a claimant's failure to: (a) go through the dispute resolution provisions; or (b) comply with a time-bar clause gives rise to a question of admissibility or jurisdiction. Put another way, if a claimant has failed to issue a notice of claim within 28 days or failed to refer a dispute to a DAB, does the arbitral tribunal have jurisdiction to make an award on the merits or should the arbitral tribunal make an award stating that it lacks jurisdiction?
Covid-19 and FIDIC contracts – what protections and entitlements?
Covid-19 has had huge consequences around the world and unfortunately this looks set to continue. In this article we consider the protection and entitlements (for Force Majeure and otherwise) which may be available to parties under FIDIC contracts for the pandemic and its consequences. We focus on the 1999 forms but briefly consider differences in the 2017 forms. We also consider the role that applicable laws may play and what parties should be aware of going forward. Force Majeure under FIDIC 1999 Under the FIDIC 1999 forms of contract, if either Party is prevented from performance of its obligations by
Damages at Large: Triple Point, FIDIC and the TCC
Triple Point was a case heard in the English Court of Appeal in March 2019 concerning the operation of liquidated damages clauses in the event of termination of a bespoke form of software contract. Sir Rupert Jackson gave the leading judgment, suggesting that where the contractor fails to complete the project, general damages at common law may be a more logical remedy than liquidated damages up to the date of termination, with general damages thereafter. This was a major departure from construction industry practice and understanding. Triple Point was considered by Mrs Justice Cockerill DBE in the TCC. It was held
FIDIC’S Golden Principles – holding back the tide?
FIDIC is concerned about its image. It says that heavily amending the FIDIC forms of contract impacts upon the FIDIC brand and that this is damaging FIDIC’s reputation. It seeks to address this with the introduction of five Golden Principles. But the Golden Principles are merely aspirational; they are not binding and have no contractual effect. Does this render them a pointless gesture ‘trying to hold back the tide’?
Pay attention Bond!
The recent English case Sumitomo Mitsui Banking Corporation Europe Limited v Euler Hermes Europe SA (NV) [2019] EWHC 2250 (Comm) highlights that where an on demand bond is assigned and a demand then made under that bond, the beneficiary will need to be sure not only that the demand is compliant with the terms of the bond but also that the assignment was effective in the first place.
FIDIC’s Emerald Book – A contractor’s charter or optimum risk allocation?
Is FIDIC’s new Emerald Book overly contractor-biased or does it offer pragmatic risk allocation for underground works? This article compares its benefits and risk distribution with the unamended FIDIC Yellow Book, especially regarding employer risks in claim-prone areas.
No EOT for Concurrent Delay, if so Agreed
Contract clauses that deny a contractor entitlement to an extension of time for concurrent delays caused by both employer and contractor are valid in principle. In North Midland Building Ltd -V- Cyden Homes Ltd [1] the Court of Appeal of England and Wales has ruled that such clauses do not offend the common law prevention principle. Nor do they give rise to an implied term to prohibit the imposition of delay damages that may result.
FIDIC contracts – What protection do they give contractors for employer financial problems?
In all construction contracts, one of the central principles is the Employer’s obligation to pay the contract price. The Contractor will be wary about the Employer’s financial standing and ability to pay and concerned to ensure that payments are made on time and that effective remedies are available in case of late or non-payment. The FIDIC standard forms of contract contain provisions dealing with these aspects.
Arbitration in a Post-Brexit World
This article considers what changes might occur for UK arbitration post-Brexit. Arbitration is excluded from EU law, and the New York Convention remains unaffected. Some believe arbitration might increase due to uncertainties in enforcing court judgments in Europe post-Brexit.
1999 Suite: Commentary on Clause 17 – Risk and Responsibility
Clause 17 covers risk and responsibility, indemnities, liability limitations, and intellectual property rights. The Contractor bears risk during execution and defect remedy periods, with risk transferring to the Employer upon issuing the Taking-Over Certificate. Risk allocation depends on governing law.
1999 Suite: Commentary on Clause 08 – Commencement, Delays, and Suspension
Clause 8 covers the start of works, time for completion, delays, extensions, and suspension of works. It includes provisions for commencement, completion, progress, delay damages, and suspension, with updates from the 4th Edition Red Book.
1999 Suite: Commentary on Clause 06 – Staff and Labour
Clause 6 covers Staff and Labour, requiring the Contractor to comply with local laws, pay fair wages, provide accommodation, ensure health and safety, and maintain proper records. It also restricts recruitment from the Employer’s personnel and mandates qualified supervision.
Cherry Picking FIDIC 2017
Much has been said about the new Red, Yellow and Silver Books 2nd Editions launched by FIDIC in December last year. The most obvious comment has been about their size, almost 50,000 words, which is some 60% longer than the 1999 forms. Although the 1999 forms were not perfect, most regular users seem to be agreed that they did not need 20,000 words to fix the issues. This consensus led this author to attempt to cherry-pick the good bits from the 2017 forms and to propose amendments to add the good ideas to the 1999 forms. The amendments apply to all three forms unless it is indicated otherwise.
Fitness for Purpose Højgaard and FIDIC’s Yellow Books
MT Højgaard is an important English case, considering fitness for purpose obligations in design-and-build contracts. This article examines the Supreme Court’s analysis of a fitness for purpose obligation in Højgaard and whether it would be applied to FIDIC’s Yellow Book contracts.
Variation Provisions in the FIDIC Yellow Book 2017
Much has already been written concerning the new FIDIC forms of contract published in December 2017. They are approximately 50 % longer and sought to set out the various procedure in much greater detail with the object of both encouraging good practice and reducing the scope for disputes. Numerous minor amendments have also been made. The purpose of this article is to look in more detail at the provisions dealing with Variations, these being amongst the most frequently scrutinised in practice.
Unintended Consequences of the FIDIC 2017 Clause 20.1 Claims Classification System
FIDIC’s 2017 editions introduced a new Claims management system in clause 20 that channels Claims through two very different procedures. One of them is very simple and involves almost no risk whereas the other will require investment of significant project resources, will take the parties a considerable amount of time to resolve and carries fatal consequences if not followed properly. It has therefore become a priority for anyone handling this Claims management system to understand how clause 20.1 sorts the different types of Claims and to recognise that the classification scheme is not as straightforward as the wording of the Contract suggests, as explored in this article.
1999 Suite: Commentary on Clause 14 – Contract Price and Payment
Clause 14 covers payment aspects, including interim and final certificates, advance payments, retention monies, and the cessation of the Employer’s liability. It outlines the process for monthly payment applications, final settlement, and the Contractor's rights if payments are delayed.
1999 Suite: Commentary on Clause 03 – The Engineer
Clause 3 outlines the Engineer's duties and obligations, including acting for the Employer, delegating authority (but not Determinations), issuing instructions, and handling Variations. It also covers Engineer replacement and making fair Determinations after consulting both Parties.
FIDIC 1999 Upgrade Launched
Corbett & Co. has published its selection of the best bits of the FIDIC 2017 2nd Editions adapted for use with the 1999 forms. With many people put off by the 50,000+ words of the new editions, the FIDIC 1999 Upgrade will permit users to benefit from FIDIC’s new ideas and improvements.