Construction Disputes under the FIDIC Contracts in our...
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Construction Disputes under the FIDIC Contracts in our Region Piotr Nowaczyk 22 November 2013
Transcript of Construction Disputes under the FIDIC Contracts in our...
Construction Disputes
under the FIDIC Contracts
in our Region
Piotr Nowaczyk
22 November 2013
FIDIC - International Federation of Consulting
Engineers
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Fédération
Internationale
Des
Ingénieurs
Conseils
SIDiR
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Stowarzyszenie
Inżynierów
Doradców
i
Rzeczoznawców
FIDIC
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FIDIC is the international federation of consulting engineers founded in
1913 by a French initiative.
Its Headquarters are in Geneva, Switzerland.
Germany has been a member since its conception.
Great Britain joined in 1948 and the USA in 1959.
FIDIC
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Currently over 90 countries have joined the Federation and have decided
to uphold its primary goals:
1. Represent the consulting engineering industry globally,
2. Enhance the image of consulting engineers,
3. Be the authority on issues relating to business practice,
4. Promote the development of a global and viable consulting
engineering industry,
5. Promote quality,
6. Actively promote conformance to a code of ethics and to business
integrity,
7. Promote commitment to sustainable development.
1999 Suite of Contracts
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• New 1999 collection of FIDIC Standard Forms of Contract
• The new Suite differentiates between who will be responsible for the
Design
• The practical result was 4 new distinct Forms of Contract:
• The new RED Book 1999
• The new YELLOW Book 1999
• The SILVER Book 1999
• The GREEN Book 1999
The FIDIC Approach
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The exception to these rules would be the SILVER Book where the Risk
between the Employer and the Contractor is willingly transferred to the
Contractor in return for higher Price, but with greater certainty on eventual
Project Cost and Duration.
Employer’s Risk Contractor’s Risk
RED Book – The fourth edition (1987)
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RED Book – Conditions of Contract (international) for Works of Civil
Engineering Construction
A need for an international Form of Contract, independent of any particular
Judicial System
FIDIC updated its RED Book (fourth Edition 1987)
The New RED Book
Conditions of Contract for
Construction
for building and engineering works
designed by the Employer
Recommended for building or
engineering works
designed by the Employer
(or its representative, e.g. the
Engineer).
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The New YELLOW Book
Conditions of Contract for
Plant and Design-Build
for electrical & mechanical plant &
for building and engineering works
designed by the Contractor
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The SILVER Book
Conditions of Contract for
EPC / Turnkey Projects
Recommended for the provision on
a turn key basis of a plant.
Applicable where one party takes
total responsibility for the design
and execution of a privately
financed infrastructure project.
„EPC” means Engineering,
Procurement and Construction.
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The GREEN Book
Short Form of Contract
Recommended for relatively simple
work, for work of short duration or
for work of small capital value.
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The GOLD Book
Conditions of Contract for
Design, Build and Operate
Projects
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FIDIC publications
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• Client / Consultant Model Services Agreement (WHITE Book)
• Conditions of Contract for Construction for Building and Engineering
Works designed by the Employer (MDB Harmonized Edition)
• Form of Contract for Dredging and Reclamation Works (Dredging)
• Conditions of Contract for Design, Build and Operate Projects (Gold
Book)
• Conditions of Subcontract for Construction for Building and Engineering
Works designed by the Employer
In addition FIDIC published Contract Guides for some of its most
frequently used documents:
• The FIDIC Contracts Guide - guide to Red / Yellow / Silver Books
• FIDIC DBO Contract Guide
Risks
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• Insurable Risks – risks of loss or damage or injury occurring
during the project’s Life, including:
• Consequences of accidents due to defective design
• „Acts of God”
• Fire
• Human Error
• Un-Insurable Risks leading to Financial and/or time Loss
including:
• Late Possession of Site
• Changes in design
• Variations
Notice – clause 20.1
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Sub-Clause 20.1 [Contractor’s Claims] – mainly for time or money
• The Contractor shall give a 28 days Notice to the Engineer after it
became aware of any event giving rise to a claim for:
Additional Payment or Extension of Time for completion
• Failure to give notice within 28 days will make the claim time-barred
Claim – clause 20.1
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• Fully detailed Claim with supporting particulars within 42 days
• The Contractor shall keep contemporary records
Determination – clause 20.1
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• Within 42 days after receiving a claim
• The Engineer shall make „a fair Determination” with approval or
disapproval
• agree or determine the Extension of Time
• and/or the Additional Payment
Dispute Adjudication Board (DAB)
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Appointment of DAB – clause 20.2 Red Book –
permanent DAB
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• Sub-Clause 20.2 [Appointment of the Dispute Adjudication Board]
• Standing DAB jointly appointed within the period stated in Appendix to Tender
• DAB shall include one/three members
• A three Members DAB – each Party shall nominate one member
• The Parties will consult both members and shall agree upon the Chairman
• Dispute Adjudication Board Agreement
• Each Party shall pay half of the DAB’s total remuneration
• Other FIDIC Conditions provide for ad hoc DABs, unless otherwise provided in
the Special Conditions
Disputes – clause 20.4
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• If a dispute (of any kind whatsoever) arises between the Parties in
connection with, or arising out of, the Contract or the execution of the
Works (…) either Party may refer the Dispute in writing to the DAB for
its decision
Adjudication
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• Clause 20.2
• Disputes shall be adjudicated by a DAB
• Clause 20.4
• Within 84 days the DAB shall give its decision
• The decision shall be binding
Dissatisfaction
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• Either Party may within 28 days after receiving the Decision give:
„Notice of its Dissatisfaction”
Amicable Settlement – clause 20.5
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• Where Notice of Dissatisfaction has been given under Sub-Clause 20.4
above, both Parties shall attempt to settle the dispute amicably before
the commencement of arbitration.
• However, unless both parties agree otherwise, Arbitration may be
commenced on or after the 56 day after the day after the day on which
Notice of Dissatisfaction was given, even if no attempt at amicable
settlement has been made.
Arbitration – clause 20.6 - general
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• Unless settled amicably, any dispute in respect of which the DAB’s
decision (if any) has not become final and binding shall be finally settled
by international arbitration. Unless otherwise agreed by both Parties:
• The dispute shall be finally settled under the Rules of Arbitration of the
International Chamber of Commerce (ICC)
• The dispute shall be settled by 3 arbitrators appointed in accordance with these
Rules
• Arbitration may be commenced prior to or after completion of the Works.
• The obligations of the Parties, the Engineer and the DAB shall not be
altered by reason of any arbitration being conducted during the progress
of the Works
Failure to Comply – clause 20.7
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• In the event that:
• neither Party has given Notice of Dissatisfaction,
• the DAB’s related decision (if any) has become final and binding, and
• a Party fails to comply with this decision,
then the other Party may refer the case to Arbitration under Sub-Clause 20.6.
Expiry of DAB’s Appointment – clause 20.8
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• If a Dispute arises and there is no DAB in place:
• Sub-Clause 20.4 [Obtaining Dispute Adjudication Board’s Decision] and Sub-
Clause 20.5 [Amicable Settlement] shall not apply, and
• The Dispute may be referred directly to Arbitration under Sub-Clause 20.6
International Court of Arbitration ICC
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• Established in 1923
• The most recognized ADR
institution world-wide
• 132 members of the Court from
85 countries
International Chamber of Commerce
33-43 avenue du Président Wilson
75116 Paris, France
Tel.: +33 1 49 53 28 28
Fax: +33 1 49 53 28 59
ICC Arbitration Clause
• „Wszelkie spory wynikające z niniejszego kontraktu lub w związku z nim
będą rozstrzygane ostatecznie stosownie do Regulaminu Arbitrażowego
Międzynarodowej Izby Handlowej przez jednego lub więcej arbitrów
wyznaczonych zgodnie z tym Regulaminem.”
• “All disputes arising out of or in connection with the present contract shall
be finally settled under the Rules of Arbitration of the International
Chamber of Commerce by one or more arbitrators appointed in
accordance with the said Rules.”
• “Visi ginčai, kylantys iš šios sutarties ar su ja susiję, turi būti sprendžiami
arbitražu pagal Tarptautinių prekybos rūmų (International Chamber of
Commerce) arbitrażuo taisykles vieno ar daugiau arbitrų pagal minėtas
taisykles, karių sprendimas bus galutinis.”
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The Court of Arbitration
at the Polish Chamber of Commerce in Warsaw
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• The biggest and the most
recognized arbitration court in
Poland
• Established in 1950
• Domestic and international cases
• Number of „Recommended”
Arbitrators: 249
SA KIG
Trębacka 4
00-074 Warszawa
T: +48 22 827 47 54
F: +48 22 827 94 01
SA KIG statistics
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Year 2008 2009 2010 2011 2012 2013
(do 20.09)
Total number of cases 260 352 440 396 304 210
Construction disputes 64
(25%) 79
(22%) 94
(21%) 79
(20%) 79
(26%) 47
(22%)
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Contact details
DENTONS Rondo ONZ 1
00-124 Warszawa
T: +48 22 242 52 52
F: +48 22 242 52 42
www.dentons.com
Thank you
Dziękuję
Dėkui
Piotr Nowaczyk
Partner
Tel.: 22 242 52 52
Fax: 22 242 52 42
Email : [email protected]
