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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 |May 7th, 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 |November 6th, 2020|Adjudication / Dispute Boards / ADR, Arbitration, Delay, Dispute Boards, featured, Knowledge Hub|Comments Off on Jurisdiction, Admissibility and FIDIC

Del tiempo y dinero en contratos FIDIC durante Covid-19

El efecto del coronavirus en la construcción es amplio y desconocido, en particular, en cómo evaluar el tiempo y el dinero perdido. Por fortuna, los contratos FIDIC proveen varias opciones a las Partes para manejar riesgos y proteger derechos. Este artículo analiza cómo se trataría la pandemia del Covid-19 bajo el Contrato de Construcción de Obras FIDIC 2010 armonizado por el Banco Mundial en español.

By |June 18th, 2020|Covid, featured, Knowledge Hub|Comments Off on Del tiempo y dinero en contratos FIDIC durante Covid-19

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 |March 10th, 2020|Dispute Boards, featured, 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 |March 10th, 2020|Bonds, English Law, featured, Knowledge Hub|Comments Off on Pay attention Bond!

FIDIC’s Emerald Book – A contractor’s charter or optimum risk allocation?

It has been suggested that FIDIC’s new Emerald Book may be “a contractors’ charter for riches”. 1 This article examines whether this new form of contract for underground works by FIDIC and the International Tunnelling and Underground Space Association is too contractor-biased or whether it provides a sensible and pragmatic risk allocation process, in an area of construction and engineering which is well known for claims. If more risks are placed on the Employer in this form of contract, what are the benefits of the contract compared to, for example, an unamended FIDIC Yellow Book?

By |March 10th, 2020|Arbitration, featured, Knowledge Hub|Comments Off on FIDIC’s Emerald Book – A contractor’s charter or optimum risk allocation?

No Oral Modification Clauses Mean What They Say

Will an oral agreement override a written one that expressly prohibits oral modification?  No.  The UK Supreme Court in Rock Advertising Ltd - v - MWB Business Exchange Centres Ltd[1] brings welcome clarification to the English common law on “no oral modification” (NOM) clauses.  The courts will now uphold them. 

By |May 21st, 2019|English Law, featured, Knowledge Hub|Comments Off on No Oral Modification Clauses Mean What They Say

No EOT for Concurrent Delay, if so Agreed

Contract clauses that deny a contractor entitlement to an extension of time for concurrent delays caused by both employer and contractor are valid in principle.  In North Midland Building Ltd -V- Cyden Homes Ltd [1] the Court of Appeal of England and Wales has ruled that such clauses do not offend the common law prevention principle.  Nor do they give rise to an implied term to prohibit the imposition of delay damages that may result.

By |May 21st, 2019|Delay, English Law, featured, Knowledge Hub|Comments Off on No EOT for Concurrent Delay, if so Agreed

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

FIDIC 1999 Books – Commentary on Clause 17

Although Clause 17 is titled ‘Risk and Responsibility’ it also sets out other provisions relating to indemnities, limitation of liability and, unusually, the specific topic of intellectual and industrial property rights. The clause provides that the Contractor assumes responsibility and bears the risk for the care of the works during execution and for remedying any defects during the Defects Notification Period. Risk transfers to the Employer on issue of the Taking–Over Certificate to the extent of works defined as being completed. Generally, in construction contracts ‘risk’ is understood to mean an event or circumstance which causes delay, loss or damage to the Works. A risk can be said to be Employer caused, Contractor caused or neutral. The purpose of risk allocation is to determine which party bears the risk for such events. The Contractor may be required to remediate the damage at his own cost or the Employer may be required to pay for the damaged works. It has been stated that the “FIDIC standard forms are generally recognised as being well balanced because both parties bear parts of the risks arising from the project.”

By |April 4th, 2019|Delay, English Law, featured, Knowledge Hub|Comments Off on FIDIC 1999 Books – Commentary on Clause 17

FIDIC 1999 Books – Commentary on Clause 8

Clause 8 contains all the fundamental provisions relating to the start of the Works, the Time for Completion, delays and the entitlement of the Contractor to an extension of time and of the Employer to delay damages, and finally the circumstances in which a suspension of the Works can occur and the implications for the Parties. 

By |November 14th, 2018|Delay, English Law, featured, Knowledge Hub|Comments Off on FIDIC 1999 Books – Commentary on Clause 8

FIDIC 1999 Books – Commentary on Clause 6

Clause 6 deals with Staff and Labour. These provisions need to be read with the applicable laws where the works are being carried out or the relevant employment law if different. Sub-Clause 6.1 commits the Contractor (unless otherwise specified) to pay for his staff and their housing feeding and transport. Sub-Clause 6.2 requires the Contractor not to pay lower wages or give lower conditions than those generally applicable locally. Sub-Clause 6.3 forbids the Contractor from attempting to recruit from the Employer’s Personnel. Sub-Clause 6.4 requires the Contractor to abide by labour laws and to require his staff to obey the law generally. Sub-Clause 6.5 forbids work on locally recognised rest days or outside the working hours set out in the Appendix to Tender, unless stated in the Contract or agreed to by the Engineer or essential for the protection of life or property or for safety reasons. Sub-Clause 6.6 requires the Contractor to provide and maintain all necessary accommodation for its personnel and for the Employer’s personnel to the extent stated in the Specification. It is forbidden from permitting its own Personnel from living within the structures forming part of the Permanent Works. Sub-Clause 6.7 requires the Contractor to maintain the health and safety of its personnel and maintain proper medical facilities for its own personnel and for any Employer Personnel accommodated. It is required to appoint an accident prevention officer. It is required to notify the Employer of any accidents and maintain records. Sub-Clause 6.8 requires the Contractor to provide all necessary superintendence by a sufficient number of properly qualified people with adequate knowledge of the defined language of communications. Sub-Clause 6.9 requires the Contractor to ensure that its personnel are properly qualified, skilled and experienced. The Employer may require the Contractor to remove any person employed on the Site or the Works who commits misconduct, is incompetent or negligent, fails to perform in accordance with any provision of the Contract or persists in any conduct prejudicial to health, safety or the environment. If a person is removed the Contractor will have to replace him. Sub-Clause 6.10 requires the Contractor to submit to the Engineer details showing personnel and equipment on Site. This is required each month and must be in a form approved by the Engineer. Sub-Clause 6.11 requires the Contractor to take reasonable precautions to prevent disorderly conduct by Contractor’s Personnel and to preserve the peace and protection or nearby persons and property.

By |November 14th, 2018|featured, Knowledge Hub|Comments Off on FIDIC 1999 Books – Commentary on Clause 6

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

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