FIDIC 2022 Reprints: 10 Key Areas Of Change In The FIDIC Red Book 2017
FIDIC ‘launched’ the FIDIC 2022 reprints at the FIDIC International Construction Users’ Conference 2022, in London. The reception to the changes was mixed – some embraced the clarity; others questioned the significance and cost. This article draws your attention to 10 of the key areas of change in respect of the FIDIC Red Book 2017 including the definition of Claim, matters to be agreed or determined, the definition of Dispute and Exceptional Events.
FIDIC contracts—introduction to the FIDIC Green Book 2021
This Practice Note is an introduction to the FIDIC Green Book 2021 (the Short Form of Contract). It is not a fully detailed clause-by-clause commentary. This article was first published by LexisPSL
The 12 Worst Things About FIDIC 2017 – A Christmas Special
The FIDIC 2017 forms first appeared at the December FIDIC Users’ Conference four years ago. No one has suggested that the FIDIC 2017 forms of contract did not rectify some of the problems in the FIDIC 1999 forms, and in Edward Corbett’s articles,[1] ‘Cherry Picking FIDIC 2017,’ and ‘FIDIC 2017 – First Impressions of the 3-Kilo Suite’, he considered some of these changes. This new suite of contracts had, at best, a lukewarm reception when they were first reviewed, with some commentators complaining about the length of these new contracts and that the contracts had not taken account of criticisms that had been made by reviewers. This article looks at the twelve worst ‘gifts’ that FIDIC gave to us for Christmas 2017.
Escalating construction costs under FIDIC: is Sub-Clause 13.8 an answer?
Construction costs are escalating. Under existing contracts, an employer will not want to pay more for the works. But forcing a contractor to perform works that are unprofitable or causing a massive loss is unlikely to be in the best interests of the project. It may result in the insolvency of the contractor forcing the employer to abandon the contract or re-let it, probably at a premium. Is a mechanism for cost adjustment, such as FIDIC 1999 Sub-Clause 13.8 [Adjustments for Changes in Costs], an answer?
Price escalation and FIDIC: is Force Majeure an answer?
Could provisions in FIDIC contracts giving relief for ‘Force Majeure’ or ‘Exceptional Events’ provide relief to contractors suffering as a result of price escalation? It is well documented that construction and engineering projects around the globe are being affected by extreme and sometimes unprecedented price escalation. This is for many reasons including the Covid-19 pandemic and the Russo-Ukrainian conflict.
The Dangers of Employer Set Off in your FIDIC Contract: Suspension and Termination
Unfortunately, under the FIDIC Red and Yellow Books 1999, the right of an Employer to set off from an amount already certified in a Payment Certificate but unpaid is inexplicit. Once the Employer has a Sub-Clause 3.5 determination, it may ask the Engineer to deduct the amount determined from the next Payment Certificate. This is clear. But rather than rely on the Engineer, can the Employer instead, itself, deduct by way of set off from an amount already certified in a Payment Certificate but unpaid? This is not clear.
International Arbitration and Third Party Funding: Time to Rethink Reward and Risk?
The English Commercial Court has now confirmed in two separate decisions that an arbitral tribunal may award a winning claimant its third party funding costs. How significant are these decisions and it is time to rethink the potential reward and risk of international arbitration?
FIDIC’s New Green Form: The Missing Link
In December 2021 FIDIC issued its 2nd edition of the Green Book. It is not so much an update to the 1st edition as a new and improved, intermediate form of contract. FIDIC is promoting it as a simpler, user-friendly alternative to the FIDIC 2017 Red and Yellow Books, where significant contract administration and management resources are not needed. The Green Book 2nd edition is recommended to be used by the World Bank for projects up to US$ 10 million. The Green Book 1st edition was originally intended for projects of US $500,000 with no more than a 6-month duration. However, the Green Book 1st was sometimes used for larger projects with a duration of up to two years. The Green Book 2nd therefore takes over from where the Green Book 1st left off. This is to be welcomed. The FIDIC 2017 suite of contracts (Red/Yellow/Silver) is unsuitable for smaller projects where less administration is required. The Green Book 2nd will therefore fill a much-needed gap in the FIDIC rainbow and is likely to be attractive to both Contractors and Employers. This article looks at some of the key features of the Green Book 2nd.
On-Demand Bonds, Injunctions and FIDIC Contracts
Bonds and guarantees will usually be required in any major construction project and they are a requirement within FIDIC standard forms. An on-demand bond is a security that unconditionally requires a Bank or other surety to pay to the beneficiary a sum of money once a demand has been made and, on occasion, on the presentation of certain documents. This can be contrasted with a normal guarantee which will usually require the beneficiary to prove a liability against the obligor/debtor who has the benefit of the guarantee. These normal types of guarantees are commonly referred to as “see to it” guarantees.[1]
FIDIC Changes in Legislation and Covid-19: Compelled by Law or Just Doing Your Job?
Up until the spring of 2020, a FIDIC 1999 Sub-Clause 13.7 [Adjustments for Changes in Legislation][1] claim was just one of many issues to be resolved, for example, in a delay and disruption claim or a Cost claim. However, the focus it receives in the context of Covid-19 is drastically different. Many in the industry are using the changes in legislation provision to seek financial compensation in a situation that would otherwise potentially only attract an extension of time.[2] Awarding Cost for Covid-19 events regardless of the circumstances may seem to some (Contractors mostly, though there are Employers and Engineers who agree) like the appropriate thing to do, but whether it is correct according to the Contract is a different question.
The Baby is Back in the Bath: Liquidated Damages in the UK Supreme Court
In March 2019, in the English Court of Appeal, Sir Rupert Jackson upended the orthodox approach to the operation of liquidated damages clauses in commercial contracts. Sir Rupert had suggested 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. Order has been restored in the UK Supreme Court, which recently held in Triple Point Technology, Inc v PTT Public Company Ltd[1] that liquidated damages for delay were payable in respect of work which had not been
FIDIC 2017 – A Practical Legal Guide – Errata
Page Corrigenda 146 For provisions referring to sub-clause 3.7, see sub clauses 1.1.29, 1.1.57, 148 Clause 3 of the FIDIC Emerald Book 2019 … 348 Footnote 1: FIDIC’s Emerald Book 2019 … 353 Delete sentence " There is a discussion under Sub-Clause 17.6 of its implications." 364 It should be noted that sub-clause 1.15 of the Contract limits liability.... 374 In the FIDIC 2017 suite, the Engineer must state only what is wrong, the relevant contractual clause, and by when it must be fixed; … 381 The right to terminate if the Contractor assigns or subcontracts the Contract without the Employer’s
Arbitration Update 2021
The last year or two has seen changes in arbitration rules and procedures, caused in no small part by the COVID-19 pandemic. There are new LCIA, DIFC-LCIA and ICC arbitration rules. The Seoul Protocol on Video Conferencing in International Arbitration is being regularly used and the Africa Arbitration Academy Protocol on Virtual Hearings has been issued. There have also been revisions to the IBA Rules on Taking Evidence in International Arbitration. This short update looks at the key take-aways from these changes.
‘Subject to Contract’ in English Law
This article considers the label ‘subject to contract’ in English law and two recent English court decisions which consider the effect of this label in different factual circumstances. Parties who are negotiating a contract may use the label ‘subject to contract’ to ensure that they do not enter into a binding agreement before they are ready to do so. This can be particularly important in English law when a binding agreement can be reached (with a few exceptions) without any particular formalities. However, the label is not unassailable and whether it has the required effect will always depend on the circumstances.
Changing Tack
A contract may require a party giving notice of a claim to specify the contractual or legal basis of that claim in the notice (or the supporting particulars). What if that party states a contractual or legal basis for the claim but later (perhaps with the benefit of additional information or because of advice from its lawyers) changes its mind or wants to include further contractual or legal bases? This was considered by the Hong Kong Court of Appeal in Maeda Corporation and China State Construction Engineering (Hong Kong) Limited v Bauer Hong Kong Limited [2020] HKCA 830. It found that a subcontractor could not change the contractual basis for its claim once the time period for providing such notice had expired. What, if any, impact will this decision have on the FIDIC forms of contract?
Obstacles to the Appointment of an Arbitrator
Airports Authority of Trinidad and Tobago v Jusamco Pavers Ltd[1] is an under reported FIDIC Yellow Book 1999 case. It considers: (1) delay in commencing arbitration, (2) replacement of the Engineer, and (3) whether an Engineer’s determination is a pre-requisite to commencing arbitration. Background The parties entered into a FIDIC 1999 Yellow Book contract for the £165 million rehabilitation of the airport in Trinidad and Tobago and an upgrade of the Perimeter Road and Fence. The Employer was the Airports Authority of Trinidad and Tobago (AATT) and Jusamco Pavers Limited (JPL), the Contractor. Unusually, the Engineer named in this contract,
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?
Tribunal Secretaries: Tasks, Transparency and Regulation
Background The debate surrounding the use of tribunal secretaries in international arbitration is not new. In 2002, Partasides christened the issue "the Fourth Arbitrator"[1]. Noting concern within the arbitration community at a perceived excessive role of tribunal assistants, Partasides argued that this concern could damage the legitimacy of the arbitral process. Hindsight shows that it is, at least, a fertile ground for arbitral challenges. The concern centres on the concept of the arbitrator's mandate as personal ('intuitu personae'). It therefore should not be delegated to a tribunal secretary, who is most often a junior lawyer. The use of tribunal secretaries
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 Technology, Inc v PTT Public Company Ltd [2019] EWCA Civ 230 Triple Point Technology, Inc v PTT Public Company Ltd [2017] EWHC 2178 (TCC) PBS Energo AS v Bester Generacion UK Ltd and others [2020] EWHC (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