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.

By |21/05/2019|Dispute Boards, featured, Knowledge Hub|Comments Off on FIDIC contracts – What protection do they give contractors for employer financial problems?

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.

By |04/04/2019|Commentaries on the 1999 Suite, Delay, English Law, featured, Knowledge Hub|Comments Off on 1999 Suite: Commentary on Clause 17 – Risk and Responsibility

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.

By |14/11/2018|Commentaries on the 1999 Suite, Delay, English Law, featured, Knowledge Hub|Comments Off on 1999 Suite: Commentary on Clause 08 – Commencement, Delays, and Suspension

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.

By |14/11/2018|Commentaries on the 1999 Suite, featured, Knowledge Hub|Comments Off on 1999 Suite: Commentary on Clause 06 – Staff and Labour

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.

By |29/10/2018|Adjudication / Dispute Boards / ADR, Arbitration, Delay, Dispute Boards, Drafting, featured, FIDIC, Knowledge Hub|Comments Off on Cherry Picking FIDIC 2017

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.

By |29/10/2018|Design, English Law, featured, FIDIC, Knowledge Hub|Comments Off on Fitness for Purpose Højgaard and FIDIC’s Yellow Books

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.

By |26/09/2018|Commentaries on the 1999 Suite, featured, Knowledge Hub|Comments Off on 1999 Suite: Commentary on Clause 14 – Contract Price and Payment

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.

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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.

By |27/01/2018|Commentaries on the 2017 Suite, Knowledge Hub|Comments Off on 2017 Suite: Commentary on Clause 03 – The Engineer

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.

By |13/12/2017|Dispute Boards, featured, FIDIC, Knowledge Hub|Comments Off on FIDIC 2017 – First Impressions of the 3-Kilo Suite

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.

By |03/08/2017|English Law, featured, Knowledge Hub|Comments Off on All Damage Is In A Sense Consequential – So What In Law Are Consequential Losses?

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.

By |10/05/2017|Commentaries on the 1999 Suite, featured, Knowledge Hub|Comments Off on 1999 Suite: Commentary on Clause 15 – Termination by Employer

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.

By |08/02/2017|featured, Knowledge Hub|Comments Off on The Employer’s Agent

The Courtesy Trap – FIDIC’s Sub-Clause 20.5 – Amicable Settlement and Emirates Trading

In this article Corbett & Co. Director Andrew Tweeddale addresses whether sub-clause 20.5 is a condition precedent to the commencement of an arbitration or whether it is an obligation, the breach of which will not affect the jurisdiction of the arbitral tribunal to resolve the dispute.

By |11/08/2016|Knowledge Hub, Publications|Comments Off on The Courtesy Trap – FIDIC’s Sub-Clause 20.5 – Amicable Settlement and Emirates Trading

1999 Suite: Commentary on Clause 05 – Nominated Subcontractors

Clause 5 defines a "nominated Sub-Contractor" and allows the Contractor to object on reasonable grounds. If the Employer insists on employing the Sub-Contractor, it must indemnify the Contractor. Payments to the Sub-Contractor are certified by the Engineer.

By |01/08/2016|Commentaries on the 1999 Suite, Knowledge Hub|Comments Off on 1999 Suite: Commentary on Clause 05 – Nominated Subcontractors

Where Do FIDIC Cases Go?

FIDIC is arguably the most widely used standard form of international construction contract but reported FIDIC cases are rare. Is it time for an increased publication of FIDIC cases? There are three categories of decisions arising out of FIDIC dispute resolution provisions: 1. Decisions of the Engineer or the Dispute Adjudication Board (DAB), which will generally not be published or reported to anyone other than the parties involved in the dispute. 2. Decisions of arbitral tribunals, which are not usually made public although this is subject to certain exceptions. 3. Decisions of national courts, which are a relatively rare occurrence for the reasons discussed below.

By |16/12/2015|Arbitration, Dispute Boards, FIDIC, Knowledge Hub|Comments Off on Where Do FIDIC Cases Go?

Employers Beware

How important is it for an Employer to give a Sub-Clause 2.5 notice of a set-off or cross-claim under the FIDIC Red Book form of contract? Very, according to the Privy Council in NH International (Caribbean) Limited v National Insurance Property Development Company Limited . It found that: o Sub-Clause 2.5 applies to any claims the Employer wishes to make. o The Employer must make such claims promptly and in a particularised form. o Where the Employer fails to raise a claim as required, the back door of set-off or cross-claims is firmly shut. The case also serves as a warning to Employers who take a relaxed view towards their obligation under Sub-Clause 2.4 to provide reasonable evidence of the financial arrangements they have made and are maintaining to pay the Contract Price. It doesn’t matter how wealthy or important the Employer is (it may be a Government, company or individual with very substantial funds) detailed financial information must still be provided.

By |16/12/2015|Knowledge Hub|Comments Off on Employers Beware

PERSERO 2 – Singapore Court of Appeal rules DAB decisions are enforceable by way of interim award

On 27 May 2015, the 160-page reserved judgement of the Singapore Court of Appeal (“CA”) was handed down in Persero 2 - PT Perusahaan Gas Negara (Persero) TBK (“PGN”) v CRW Joint Operation (“CRW”)[1]. It will be regarded a triumph for contractors wishing to enforce DAB decisions. The CA ruled that the interim award issued by the arbitral tribunal ordering enforcement of the DAB’s decision should stand. Using the concept of an “inherent premise”, the CA made two important findings: 1) it was not necessary for the Contractor to refer the failure to pay (the secondary dispute) back to the DAB; and 2) it was not necessary for him to refer the merits (the primary dispute) in the same single arbitration as his application to enforce.

By |14/09/2015|Dispute Boards, Knowledge Hub|Comments Off on PERSERO 2 – Singapore Court of Appeal rules DAB decisions are enforceable by way of interim award

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