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.

By |11/12/2022|FIDIC, Knowledge Hub|Comments Off on The 12 Worst Things About FIDIC 2017 – A Christmas Special

1999 Suite: Commentary on Clause 13.8 – Variations: Adjustments for Changes in Cost

Employers avoid paying more under existing contracts, but forcing unprofitable work risks contractor insolvency. Contractors now seek protection from price fluctuations, preferring short projects or cost-plus letters of intent. Cost adjustment mechanisms, like FIDIC 1999 Sub-Clause 13.8, may help.

By |30/08/2022|Commentaries on the 1999 Suite, Knowledge Hub|Comments Off on 1999 Suite: Commentary on Clause 13.8 – Variations: Adjustments for Changes in Cost

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.

By |30/08/2022|Cost, featured, Knowledge Hub|Comments Off on Price escalation and FIDIC: is Force Majeure an answer?

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?

By |18/03/2022|Arbitration, Knowledge Hub|Comments Off on International Arbitration and Third Party Funding: Time to Rethink Reward and Risk?

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.

By |08/03/2022|FIDIC, Knowledge Hub|Comments Off on FIDIC’s New Green Form: The Missing Link

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]

By |24/11/2021|Bonds, Knowledge Hub|Comments Off on On-Demand Bonds, Injunctions and FIDIC Contracts

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.

By |23/09/2021|Covid, Delay, featured, FIDIC, Knowledge Hub|Comments Off on FIDIC Changes in Legislation and Covid-19: Compelled by Law or Just Doing Your Job?

Arbitration Update – The new FIDIC certifications: will they pass the test?

In March 2020, FIDIC launched FIDIC Credentialing Ltd (FCL) to certify industry professionals. Though seen by some as overambitious, it aims to address real issues with FIDIC forms. This article examines one programme's potential to solve these problems.

By |24/06/2021|Arbitration, Knowledge Hub, Publications|Comments Off on Arbitration Update – The new FIDIC certifications: will they pass the test?

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?

By |07/05/2021|Arbitration, featured, Knowledge Hub|Comments Off on Changing Tack

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?

By |06/11/2020|Adjudication / Dispute Boards / ADR, Arbitration, Delay, Dispute Boards, featured, FIDIC, Knowledge Hub|Comments Off on Jurisdiction, Admissibility and FIDIC

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’?

By |10/03/2020|Dispute Boards, featured, FIDIC, Knowledge Hub|Comments Off on FIDIC’S Golden Principles – holding 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.

By |10/03/2020|Bonds, English Law, featured, Knowledge Hub|Comments Off on Pay attention Bond!

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