BOOKS & REPORTS
The FIDIC suite of contracts analysed Aug 2010
Title: FIDIC Contracts: Law and Practice Authors: Ellis Baker, Ben Mellors, Scott Chalmers and Anthony Lavers Year of Publication: First Edition 2009 Publisher: Informa ISBN: Hardback 978-1-84311-628-8 Price: £290.00 Buy on-line at Informa
The Federation International des Ingénieurs - Conseils (FIDIC) is the leading body for the development of model standard forms of contract for use in the international construction industry. The FIDIC forms are probably the most widely used 'international' standard form contracts and are used worldwide on all types of construction and engineering projects, from the construction of simple structures, to bridges, tunnels and massive infrastructure projects, to power and process plants.
The suite of FIDIC contracts comprises:
Conditions of Contract for Construction for Building and Engineering Works Designed by the Employer (1999) ('the Red Book');
Conditions of Contract for Plant and Design-Build for Electrical and Mechanical Plant, and for Building and Engineering Works, Designed by the Contractor (1st edition 1999) ('the Yellow Book');
Conditions of Contract for EPC/Turnkey Projects (1st edition. 1999) ('the Silver Book');
Conditions of Contract for Construction for Building and Engineering Works Designed by the Employer – Multilateral Development Bank Harmonised Edition (March 2006) (‘MDB’)
Conditions of Contract for Design, Build and Operate Projects (1st edition, 2008) ('the Gold Book').
The FIDIC forms are adopted around the world including in the Middle East, South East Asia and Eastern Europe, and widely used in Africa, notably the Red Book, in countries with a common law tradition. The uptake is more limited in countries that have their own domestic highly-developed standard form contracts, such as the USA, UK, Australia, Malaysia and Germany. Nevertheless, the FIDIC forms are not restricted, nor intended, for use under a particular governing law, which goes along way to explaining their success and uptake around the world.
Another reason for the global recognition of the FIDIC forms is the adoption of an amended version of the Red Book by a group of Multilateral Development Banks (MDBs), including the World Bank, for the procurement of aid-funded projects. It is generally accepted by employers and contractors that FIDIC contracts provide a recognisable common basis of agreement for defining the conditions of contract for the construction industry worldwide.
FIDIC Contracts: Law and Practice is the only book to date that provides a detailed analysis of the whole suite of FIDIC contracts, including the new Gold Book for Design, Build and Operate Projects. The author team includes both 'front-end' experience of project procurement and international dispute resolution experience and their commentary will be given against the background of conflicting views held by those occupying particular positions in the industry.
The operation of the FIDIC forms (as with construction contracts generally) relies on an often complex interaction of provisions found in different sub-clauses, which both complement and supplement each other. These provisions must be read together to obtain a full understanding of the rights, obligations and liabilities of the parties. For this reason, the authors have adopted an issue-based approached, as opposed to providing a commentary on a clause-by-clause basis. Individual sub-clauses have been considered in detail, but the authors have then sought to place these sub-clauses into the context of the contract as whole. The book is intended to be read alongside the relevant form of contract.
The book opens with a general discussion of FIDIC as an institution and the background to the contract forms; chapter two considers the FIDIC forms and other forms published by FIDIC and the structure of a FIDIC Contract; chapters three, four and five are concerned with the parties' obligations in relation to what and how the works are to be constructed and, in the Gold Book, operated, their payment obligations and their obligations as to time; chapter six deals with the administration of the contract, and in particular two central features of the FIDIC forms: the role of the third-party contract administrator (except in the Silver Book) and the administration of claims; chapter seven concerns the mechanisms found in the FIDIC forms for the allocation and management of specific risks; chapter eight collates and discusses the various remedies available to the parties; and the book concludes with chapter nine – the resolution of disputes under the FIDIC forms.
The choice of governing law adopted will, of course, affect the particular application and operation of the provisions the FIDIC forms for any given project. It is for this reason that the authors have sought to adopt a 'jurisdiction-neutral' approach, concentrating on the provisions of the forms themselves. Nevertheless, the current FIDIC forms are recognisably common law in origin. Thus it was considered not only appropriate, but also useful, to discuss particular principles that are peculiar to common law jurisdictions, such as the duality of the role of the contract administrator, extensions of time and liquidated damages for delay, which have informed the drafting of the forms, with reference to relevant case law. Extensive reference is also made to the FIDIC Guide published to accompany the Red, Yellow and Silver Books, which provide, not only useful guidance, but also a helpful insight into the intentions of the draftsmen.
The book will be suitable for lawyers practising in international procurement and dispute resolution as well as for engineers, project managers, quantity surveyors, architects and contractors. It provides legal commentary and detailed analysis of the clauses of each of the different forms, with relevant case law and includes a comprehensive chapter dedicated to dispute resolution covering dispute boards, amicable settlement and arbitration. The FIDIC suite of contracts is also explained in relation to other organisations, such as the World Bank and the International Chamber of Commerce (ICC) who are closely involved with their use.
The book opens with a general discussion of FIDIC as an institution and the background to the contract forms; chapter two considers the FIDIC forms and other forms published by FIDIC and the structure of a FIDIC Contract; chapters three, four and five are concerned with the parties' obligations in relation to what and how the works are to be constructed (and in the Gold Book, operated), their payment obligations and their obligations as to time; chapter six deals with the administration of the contract, and in particular two central features of the FIDIC forms: the role of the third-party contract administrator (except in the Silver Book) and the administration of claims; chapter seven concerns the mechanisms found in the FIDIC forms for the allocation and management of specific risks; chapter eight collates and discusses the various remedies available to the parties; and the book concludes with chapter nine – the resolution of disputes under the FIDIC forms.
The Author Team
Ellis Baker is a graduate of Queens’ College, Cambridge (MA 1992, LLM 1994). He has been a Partner and Head of the Construction & Engineering Practice Group at the London office of White & Case since 2002. His transactional experience spans 30 countries worldwide, and all the major contract forms, mainly in the power, oil and gas, mining and transport infrastructure sectors.
Ben Mellors holds a Masters degree in Engineering Science from Oxford University and is a Graduate Member of the Institution of Civil Engineers, where he is a Member of the Legal Affairs Advisory Panel. After practice as a civil engineer, he qualified as a lawyer in 2003, joining White & Case in 2009. He has significant experience of the FIDIC forms of contract and has acted in a number of disputes in East Africa, Eastern Europe and the Caribbean.
Scott Chalmers gained degrees from Canada and Australia, where he qualified and practised as an architect. Admitted as a lawyer in 1998, he was with a major international Sydney law firm before joining White & Case as a Senior Associate in 2003; he is also qualified as a solicitor in England & Wales. He specialises in the negotiation and drafting of construction and engineering contracts.
Anthony Lavers read law at University College, London and the University of Southampton and taught at the University of Portsmouth and the National University of Singapore, where he obtained his Ph.D. Called to the Bar in 1997, Professor Lavers joined White & Case in 2001. Chairman of the Society of Construction Law (2004-2006) he received a D.Litt from the University of Portsmouth in 2006 and was made a Fellow of the Royal Institution of Chartered Surveyors in 2008.
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