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.
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.
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.
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.
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.
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.
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.
Earlier this year, the English High Court considered a heavily amended FIDIC Yellow Book 1999. Whilst the case is specific to the particular contractual amendments it is worth review. The case is J Murphy & Sons Ltd v Beckton Energy Ltd. It proceeded in court and on an expedited basis as a matter of some urgency because a bond was about to be called for non-payment of delay damages. The Contractor claimed the call would affect his commercial reputation, standing and creditworthiness, and may well need to be disclosed in future tenders. He had not paid the delay damages because there had been no agreement or determination of the entitlement to such by the Engineer under Sub-Clauses 2.5 and 3.5.
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.
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.
The Judgment of Sir Robert Akenhead has been upheld and OHL’s appeals have been dismissed. The judgment was a rare excursion by the TCC into the FIDIC contract and considered unforeseen ground conditions, termination and notice under cl.20.1.
Read the full article here.
If there is no DAB appointed by parties to a FIDIC 1999 contract, may disputes be referred directly to arbitration under Clause 20.8? This issue has troubled many in the industry – and has now been considered in English and Swiss courts.
The English Court considers termination and notice provisions under the FIDIC Yellow Book 1999. How are clause 15.1 notices to correct limited? Do termination events have to be repudiations? Is it fatal to serve notice of termination on the ’wrong’ address? When does the 28-day period under clause 20.1 start to run? Mr Justice Akenhead offers guidance to the industry.
Published in International Arbitration Law Review This article is divided
A previous article proposed that difficult questions arose from recent
