2017 Suite: Commentary on Clause 21 – Disputes and Arbitration
Clause 21 introduces a standing Dispute Avoidance/Adjudication Board (DAAB) instead of an ad-hoc DAB. The DAAB is appointed at the outset, assists in dispute avoidance, and its decisions are binding. The amicable settlement period is reduced to 28 days.
2017 Suite: Commentary on Clause 20 – Employer’s and Contractor’s Claims
The new Clause 20 distinguishes between main Claims, which follow a strict procedure, and other Claims, which are determined by the Engineer without strict procedural requirements, starting from the disagreement between parties and requiring only a Notice of Claim.
2017 Suite: Commentary on Clause 18 – Exceptional Events
Clause 18 replaces "Force Majeure" with "Exceptional Events," aiming for clarity in civil law jurisdictions. Strikes and lockouts are now distinct from riots. The clause maintains natural catastrophes and clarifies that invoking it results in contract termination.
2017 Suite: Commentary on Clause 16 – Termination by Contractor
Clause 16 introduces new grounds for suspension and termination, including non-compliance with binding decisions and non-receipt of Commencement Date Notice. It addresses corruption, and clarifies termination grounds and procedures. Contractors gain protection against financial consequences and can claim profit loss.
2017 Suite: Commentary on Clause 15 – Termination by Employer
Clause 15 introduces new grounds for termination: non-compliance with a binding Engineer’s Determination or DAAB decision; and maxing out Delay Damages (actual deduction not necessary). Uncertainty remains if EOT is granted post-termination, potentially affecting the legality of termination.
2017 Suite: Commentary on Clause 10 – Employers Taking Over
Clause 10 changes include express references to As-Built Records, Manuals, and Training for Taking Over, a Notice of No-objection requirement, deemed Taking Over without these Notices, immediate issuance of Taking-Over Certificates, and a 14-day prevention period.
2017 Suite: Commentary on Clause 09 – Tests on Completion
Contractors must prepare a detailed test programme reviewed by the Engineer. Clause 9.2 addresses delayed tests, applying Clause 10.3 for undue delays. Clause 9.2 adds procedures, including three Notices. Clause 9.4 expands failure criteria to include section rejection, complicating recovery under Clause 13.3.1.
2017 Suite: Commentary on Clause 08 – Commencement Delays and Suspension
Clause 8 changes include enhanced Programme requirements, Advance Warning mechanism, no Sub-Clause 20.2 notice for extension due to Variation, further definition of adverse climatic conditions, acceleration methods under Sub-Clause 13.3.1, and a cap on Delay Damages lifted for severe misconduct.
2017 Suite: Commentary on Clause 06 – Staff and Labour
Clause 6 is similar to the 1999 version but adds Key Personnel, strictly regulated by the Engineer. Other changes include clearer employment laws, notice for work outside normal hours, enhanced health and safety roles, and improved record-keeping.
2017 Suite: Commentary on Clause 03 – The Engineer
The main changes in Clause 3 are that: the Engineer may exercise its authority without the Employer's consent under Sub-Clause 3.7; and the Engineer must act “neutrally” under Sub-Clause 3.7. The intention is that the Engineer treats both Parties fairly.
2017 Suite: Commentary on Clause 02 – The Employer
Clause 2 now comprises 6 sub-clauses. New provisions, 2.5 and 2.6, have been introduced. The obligations and consequences remain unchanged. In Clause 2.4, the Employer can now specify financial arrangements, and the Contractor can request evidence under specific conditions.
FIDIC 2017 – First Impressions of the 3-Kilo Suite
FIDIC has launched the Second Editions of the Red, Yellow, and Silver Books, now over 50% longer than the 1999 forms. Key updates include more prescriptive processes, new time-bars, enhanced Dispute Boards, and a separate chapter on Disputes and Arbitration.
1999 Suite: Commentary on Clause 19 – Force Majeure
Clause 19 covers Force Majeure and release from performance, with broader definitions than typical laws. It prescribes detailed insurance requirements, reducing flexibility. The Contractor bears most obligations, necessitating careful amendments and professional advice to avoid misunderstandings and ensure proper incorporation into contracts.
All Damage Is In A Sense Consequential – So What In Law Are Consequential Losses?
English courts have historically held 'consequential loss' to be synonymous with 'indirect loss'. However, a recent case questions this position. It is also worth nothing that courts in different countries interpret 'consequential loss' differently from English courts.
Mistake In English Law: Two Recent Cases
English law recognises different types of mistake and permits various equitable remedies in case of mistake, as illustrated by the two English court decisions examined in this article.
Penalty Clauses Down Under
Whilst it is widely understood that the law on liquidated damages differs considerably between common law and civil law jurisdictions, there are also differences within common law jurisdictions which are sometimes overlooked. This article summarises the recent developments to the law on penalties in England and Wales, as reported by Steve Mangan in May 2016[1], and compares them with the developments to the law on penalties in Australia.
1999 Suite: Commentary on Clause 15 – Termination by Employer
Clause 15 covers Termination by the Employer, including notices to correct, grounds for termination, valuation at termination, payment after termination, and the Employer's entitlement to terminate at will with 28 days' notice.
A Surprise Award of Third Party Funding Costs
Third party funding is increasingly used in international arbitration even though the cost can be significant. A new case has established that a winning claimant could recover the cost of obtaining third party funding as a cost in the arbitration.
The Employer’s Agent
The Engineer is deemed to act for the Employer and is essentially the Employer’s agent under the FIDIC Red Book 1999. He is not a wholly impartial intermediary, unless such a role is specified in the Particular Conditions, and there is no general obligation under the FIDIC Red Book 1999 for the Engineer to act independently or impartially. However, when he is required to make a determination under Sub-Clause 3.5, he is obliged to make it a fair determination and when he is obliged to issue an Interim Payment Certificate under Sub-Clause 14.6, or a Final Payment Certificate under Sub-Clause 14.13, he must fairly determine the amount due.
The Risk of Relying on the Obrascon case’s ruling on Sub-Clause 20.1 Claim Notices
Contractors are sometimes concerned about the politics of their FIDIC 1999 Sub-Clause 20.1 notices. Some Contractors may consider that serving Sub-Clause 20.1 notices may send the wrong message, particularly in the honeymoon period when the works have just begun. However, the consequences of failing to serve a timely claim notice are so dire that doubtless the issue is regularly on every Contractor’s mind. The case of Obrascon Huarte Lain SA v Her Majesty's Attorney General for Gibraltar1 in the Technology and Construction Court of England and Wales provided some welcomed relief to many Contractors worldwide who may now attempt to rely on its finding on the timing of claim notices when postponing service of these crucial notices.