THE "CONTRACTS OF CHOICE" FOR THE WORLD'S MOST HIGH-PROFILE CONSTRUCTION AND INFRASTRUCTURE PROJECTS HAVE BEEN UPDATED.
During its annual users' conference on 5 – 6 December, FIDIC launched revised versions of its internationally recognized Red Book, Yellow Book and Silver Book, replacing the renowned 1999 FIDIC Suite of Contracts.
The newly released contracts reflect a long awaited update and response to the changing needs of the construction industry. In doing so, FIDIC (the International Federation of Consulting Engineers) adopted best practices and international standards in preparing the FIDIC books to reflect the challenges construction contracts face in a quickly developing and highly digitalized future.
The core aim of the majority of changes is increased clarity and certainty to reduce the risk of disagreements and thereby increase the probability of successful projects. In particular, the following modifications will have the largest impact on parties to international construction agreements based upon the FIDIC books:
- The former Clause 20 [Claims, Disputes and Arbitration] has been split into Clause 20 [Employer's and Contractor's Claims] and Clause 21 [Disputes and Arbitration] to separate 'day-to-day' Parties' claims from Parties' disputes. To highlight the distinction in the contractual approach, Employers' Claims are no longer part of Clause 2 since these are now dealt with in Clause 20 in the same way as Contractors' claims;
- Sub-Clause 3.7 [Determinations] of the Red and Yellow Books 2017, which replaces Sub-Clause 3.5, details the Engineer's role in dealing with Parties' claims and introduces a step-by-step procedure with time limits;
- Sub-Clause 20.2 [Claims for Payment and/or EOT] prescribes the step-by step procedure to be followed for Employers' and Contractors' claims for time and/or money. If the Engineer (under the Red and Yellow Books 2017) or the other Party's (under the Silver Book) initial response is that the Notice of Claim is time-barred due to the 28 day time-bar provision, but the claiming Party disagrees, the claiming Party is required to include these points in the fully detailed claim and these need to be taken into account in the agreement/determination;
- Sub-Clause 21 [Constitution of the DAAB] provides for a "standing" Dispute Avoidance/Adjudication Board (DAAB), i.e. the board is appointed at the start of the Contract and is in place for the duration of the Contract; furthermore, the procedure to obtain the DAAB's decision and a Party's failure to comply with such decision has been clarified in Sub-Clauses 21.4 [Obtaining DAAB's Decision] and Sub-Clause 21.7 [Failure to Comply with DAAB's Decision].
The above, however, reflects only the most important changes. The new FIDIC books include further extensive changes, both in terms of length and effect. For more information in English or your local language please click here.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.