Edward Corbett’s Practical Legal Guide on FIDIC 4th

FIDIC 4th A PRACTICAL LEGAL GUIDE Edward Corbett is the author of the leading practical legal guide to the International Civil Engineering Conditions, as well as a Supplement addressing the 1992 amendments.
Both the book and the software are available from FIDIC’s bookshop.

Author: Edward Corbett

Tags: FIDIC, FIDIC 1987 amended, FIDIC 1992, FIDIC Forms of Contract, FIDIC fourth edition, FIDIC Guide, FIDIC Red Book

January 1, 2000

Enforcing Arbitration Awards Contrary to Public Policy in England

A number of cases have recently come before the English courts dealing with applications to set aside orders for the enforcement of awards on the basis that the award is contrary to public policy because of illegality. There has not been a coherent policy adopted by the English courts but rather these issues have been dealt with on a case by case basis. This article sets out the English public policy rule. It then continues with an analysis of how challenges under the public policy rule are made in England on domestic arbitration awards. The severability of the arbitration agreement to the underlying contract is thereafter discussed and an analysis is given of the approach of the courts of England and Wales to the enforcement of foreign arbitration awards. In this regard the courts differentiate between domestic and foreign awards. They have developed a complicated test in deciding whether enforcement of a foreign award will be refused. The courts have stated that they will not permit an award to be enforced in England that is universally repugnant. However, there is some uncertainty as to the full extent of this principle. Where breach of public policy is alleged but does not appear on the face of the award then the courts have been inconsistent in deciding whether they should re-open and re-examine the facts of the case. Finally, where the award permits an act contrary to public policy to be undertaken in a foreign, friendly state then again the courts have been inconsistent as to whether such an award is permitted to be enforced in England.
For the purposes of this article references to domestic arbitrations are references to arbitrations conducted in England, Wales or Northern Ireland. Foreign arbitrations are references to arbitrations conducted outside this jurisdiction. Similarly, foreign awards and domestic awards should be construed accordingly.

Author: Andrew Tweeddale

Tags: arbitral awards contrary to public policy, arbitration, domestic arbitration awards, enforcement of awards, enforcement of foreign arbitral awards, illegality, public policy, repugnant award, severability of the arbitration agreement

Recent Cases on Serious irregularity

Recent case law shows that challenging an arbitrator’s award because of serious irregularity is no easy option. There are limited grounds upon which a challenge can be made. Even if a case falls within one of them, a party will only succeed in its challenge if it can show that it has suffered a substantial injustice. A technical breach will not suffice. Cases which, under the Arbitration Act 1950, would have been remitted back to the arbitrator because of technical misconduct, will now not be remitted because they either do not fall within the limited grounds or because they have not caused substantial injustice.
Over three years have elapsed since the Arbitration Act 1996 (AA 1996) came into force and there is still little case law on the subject of serious irregularity. Most cases in which it has been alleged have had it as an alternative to either a breach of substantive jurisdiction or an appeal on a point of law. If one of the aims of AA 1996 was to restrict the intervention of the courts in dealing with arbitration proceedings, this lack of case law illustrates an unqualified success.
Challenges for serious irregularity must be made within 28 days of the date of the award. The lack of case law therefore can only be explained on the basis that parties do not believe they can overcome the hurdles involved with making a challenge.

Author: Andrew Tweeddale

Tags: Challenging an arbitral award, serious irregularity

November 1, 2000

Scott v Avery Clauses: O’er Judges’ Fingers, Who Straight Dream on Fees

Read the full article here. Note: this published article is […]

Tags: interlocutory remedies, Scott v Avery, Scott v Avery clauses

January 1, 2001

Delay in Commencement – Delay in Commencing an Arbitration

Judge Martyn Zeidman recently commented: ‘‘As stated in Magna Carta, justice delayed is justice denied’’. The Limitation Acts are intended to prevent justice being delayed. They do this by preventing a claimant from proceeding with a case where the limitation period has expired. They do not, except in a few cases, extinguish the right of action, but bar a remedy. They are therefore, except in those few cases, procedural rather substantive defences.

Issues of limitation should not be raised in a statement of case. It is for the respondent to raise any issue of limitation within the defence and for the issue to be dealt with by the claimant in a reply. The respondent must specifically plead a defence of limitation. The burden then shifts to the claimant to show that the cause of action arose within the relevant limitation period.

The Limitation Acts were conceived out of the equitable doctrine of laches, which still has a role to play where a party seeks an equitable remedy. Equitable remedies include an order for specific performance, an injunction and rectification of a contract. The doctrine of laches states that ‘‘equity aids the vigilant, not the indolent’’ and that ‘‘delay defeats equity’’. Therefore, a claim for an equitable remedy will not be granted if the claimant has delayed in commencing a claim, even though the statutory limitation period has not expired.

In addition to the Limitation Acts and the doctrine of laches, contractual limitation provisions may provide a defence. They may either bar a claimant’s right to bring a claim or may extinguish it. The distinction between contractual limitation and statutory limitation is important because the court has power to extend time limits for a failure to comply with contractual limitation periods. Only in limited circumstances can it extend statutory periods.

Arbitration Act 1996 ss.12 to 14 deal with the commencement of arbitration proceedings and issues of limitation: section 12 with the court’s power to extend contractual time limits for beginning arbitral proceedings; section 13 states that the Limitation Acts apply to arbitral proceedings as they apply to legal proceedings; section 14 deals with the commencement of proceedings.

Author: Andrew Tweeddale

Tags: arbitration act, delay in commencing an arbitration, Limitation Act, limitation period

January 1, 2002

Incorporation of Arbitration Clauses

The Arbitration Act 1996 (AA 1996) s.6(1) defines arbitration agreements and section 6(2) deals with incorporation of arbitration agreements by reference:
(1) In this Part an ‘‘arbitration agreement’’ means an agreement to submit to arbitration present or future disputes (whether they are contractual or not).
(2) The reference in an agreement to a written form of arbitration clause or to a document containing an arbitration clause constitutes an arbitration agreement if the reference is such as to make that clause part of the agreement.
It would appear, at first sight, that referring to a written agreement containing an arbitration clause is sufficient for there to be an ‘‘arbitration agreement’’. However, the law is never that simple. Case law suggests that, in most circumstances, a general reference to a contract will not incorporate the arbitration provisions within that contract. If a party wishes to incorporate the arbitration provisions then it will need to refer expressly to those provisions.

Author: Andrew Tweeddale

Tags: arbitration act, arbitration agreement, arbitration clause, general incorporation, Incorporation of Arbitration Clause, specific incorporation, standard form of contract, words of incorporation

Confidentiality in Arbitration & The Public Interest Exception

The question whether arbitral proceedings are, or ought to be confidential, has been the source of much academic debate and was recently reviewed by the ICC Commission on Arbitration.[2] In much of Europe the prevailing view is that arbitral proceedings are confidential. However, even if they are confidential, that confidentiality cannot be absolute. As noted by Paulsson and Rawding, this would result in a paradox.[3] If the parties to an arbitration ever sat down and thought about the issue of confidentiality, they would inevitably conclude that neither of them would want a rule that arbitrations were confidential without exception. The parties may need to show the award to insurers or to a parent company. The parties may also want to enforce the award if it is not honoured and the only way to do this is in the courts, which will often be a public forum.

In a number of countries which adopt the position that arbitrations are confidential there will be a list of exceptions to the confidentiality obligation. Some countries consider that where the arbitration raises issues which have a public interest, then this should be an exception to the confidentiality obligation. This ‘public interest exception’ has been considered recently in three international arbitrations. On each occasion the argument that there ought to be a public interest exception was rejected. This article does not seek to re-visit the question of whether there is or ought to be a duty of confidentiality in arbitration.[4] Its focus is on one question; namely, should there be an exception to the duty of confidentiality where the arbitration raises issues of public interest?

Author: Andrew Tweeddale

Tags: arbitration, confidentiality and human rights legislation, duty of confidentiality, public interest exception

January 1, 2005

Are you in? Or are you out? An analysis of Section 69 of the English Arbitration Act 1996: Appeals on a question of law

This article is divided into five parts, namely: Introduction; How can the court’s jurisdiction be ousted (‘‘Are you out?’’); How can the court’s jurisdiction be included (‘‘Are you in?’’); When will the courts give permission to appeal; and Procedural aspects of s.69 of the English Arbitration Act 1996[1] (‘‘the 1996 Act’’).

Introduction

The fundamental message behind this article is that the parties should agree at as early a stage as possible on whether:

they wish to oust the jurisdiction of the courts in relation to appeals on a question of law (Are you out?—s.69(1))
or whether they wish to agree to include the ability to appeal to the courts on a question of law (Are you in?—s.69(2)).

Author: Taner Dedezade

Tags: arbitration, exclusion of court's jurisdiction, permission to appeal in arbitration, right to appeal on a question of law in arbitration, s69 Arbitration Act 1996

January 1, 2006

FIDIC’s Clause 20 a Common Law View

‘No one can obtain an advantage by his own wrong.’ However, clause 20.1 of the FIDIC forms of contract appears to permit an employer to obtain an advantage where it has caused a delay and where the contractor has failed to give a notice in the 28 days specified. In such circumstance should a court or arbitrator uphold the notice provisions in the FIDIC contracts?
This article considers what happens when a contractor fails to give a clause 20.1 notice with the result that the employer takes advantage of his or her own default.
Under the FIDIC forms of contract, a contractor that wishes to make a claim for either time or additional money must give a notice in accordance with clause 20.1. Historically, courts and arbitrators in common law countries would hold the parties to their bargains whoever difficult or unconscionable the result might be.
In recent years this position appears to be changing. The legislation in many common law countries imposes terms in contracts to protect consumers. In some jurisdictions, contacts may also be interpreted to avoid commercial absurdity, and in other jurisdictions the courts will strike down unconscionable bargains. There is also a doctrine, which is applied in many jurisdictions, that ‘No one can obtain an advantage by his own wrong’ (De Zotell v Mutual Life Ins. Co. of New York, 60 SD 532, 245. NW 58, 59). It is sometimes described as a ‘principle of equity’ and expressed in the maxims: ‘ex injuria non oritur jus’ or ‘the clean hands theory’.

Author: Andrew Tweeddale

Tags: FIDIC, FIDIC 1999, prevention principle, sub-clause 20.1 notice

June 1, 2006

Commencement of Arbitration and Time Bar Clauses

This article considers how English courts construe time-bar clauses and whether there is an advantage in having an arbitration clause in a contract where there is a time-bar clause. It is now common to find time-bar provisions in many of the major forms of construction contracts. They appear in NEC 3, in the FIDIC suite of contracts and the ICE forms. Sub clause 20.1 of the FIDIC forms of contract, for example, creates a time-bar that gives a Contractor just a mere 28 days to put in a notice of a claim for additional cost or an extension of time. Given that the effect of a failure to issue a 28-day notice is an apparent bar on any claim, it is unsurprising that time-bar clauses have been the subject of much consideration and review. Recent decisions in the courts show that these clauses are being construed strictly. This has led one leading English lawyer, in a paper on the FIDIC forms of contract, to comment that quite possibly there are no ways round a sub-cl.20.1 notice.

Author: Andrew Tweeddale

Tags: arbitration clause, extension of time for commencement of arbitration, FIDIC time-bar clauses, sub-clause 20.1, time-bar clauses

November 1, 2009

Incorporation of Arbitration Clauses Revisited

Eight years ago in an article in Arbitration we noted the divergent views of a number of first-instance judges on the subject of the incorporation of arbitration clauses. The key issue was whether an arbitration clause could be incorporated into a contract by general words or whether this required clear express words only. The question of whether an arbitration agreement is incorporated into a contract is fundamental as it determines whether the parties are required to proceed to resolve their dispute by arbitration rather than court proceedings. The starting point for any analysis is the wording of the Arbitration Act 1996 s.6. This states:
“6. Definition of arbitration agreement
(1) In this Part an ‘arbitration agreement’ means an agreement to submit to arbitration present or future disputes (whether they are contractual or not).
(2) The reference in an agreement to a written form of arbitration clause or to a document containing an arbitration clause constitutes an arbitration agreement if the reference is such as to make that clause part of the agreement.”
The difficulty arises because of the final words in s.6(2): “if the reference is such as to make that clause part of the agreement”. There has been conflicting authority as to what is required to make “that clause part of the agreement”.

Author: Andrew Tweeddale

Tags: arbitration clause, Incorporation of Arbitration Clause, words of incorporation

November 1, 2010

Contracts rights of third parties act – Arbitration under the Contracts (Right of Third Parties) Act 1999 and Enforcement of an Award

The Contracts (Rights of Third Parties) Act 1999 has redressed many of the criticisms made against the English privity of contract rule. Regrettably, however, Parliament ignored the recommendations of the Law Commission and extended the application of the Contracts (Rights of Third Parties) Act 1999 to include arbitration. While this has little impact where a dispute is purely domestic it does have an impact where a dispute has an international character. It may surprise many foreign parties to contracts that are subject to the law of England and Wales that they have, by including reference to English law, potentially given rights to a third party. A third party who has obtained those rights will however find itself having an up-hill struggle to enforce an arbitration award that it might obtain in a foreign jurisdiction. This is because the third party is not a party to the arbitration agreement and the New York Convention applies only to parties to the arbitration agreement. There has not yet been a case on enforcement in a foreign jurisdiction of an award made under the Contracts (Rights of Third Parties) Act 1999 but as the Act is now being used more often this is an issue that may soon have to be addressed by the courts.

Author: Andrew Tweeddale

Tags: arbitration, Contracts (Rights of Third Parties Act, enforcement of an arbitral award, jurisdiction, New York Convention, privity of contract, The Contracts Act

January 1, 2011

Enforcement of Declarations and conflicting decisions: West Tankers still afloat

The case of West Tankers Inc v Allianz SpA and Generali Assicurazione Generali SpA has once again come before the courts on the issue of enforcement.
In 2009 the West Tankers case went before the European Court of Justice (ECJ) who held that an anti-suit injunction, issued by an English court to prevent court proceedings progressing in another Member State, was contrary to EC Regulation 44/2001 (the ‘Brussels I Regulation’). The consequence of that ruling is that West Tankers Inc now has an award in its favour in London but risks having a conflicting judgment in the Italian courts. This recent decision of the English High Court in West Tankers addresses how an arbitrator’s award can be protected in the absence of an anti-suit injunction.
In this article we set out the facts relating to the West Tankers dispute and the court’s recent decision that, in certain circumstances, it will recognise an arbitrator’s award in declaratory terms. The court has taken a pragmatic rather than logical approach to the problem of conflicting decisions. However, the thorny question of ‘what happens when enforcement is sought of a conflicting regulation judgement where there is already an arbitration award?’ was side-stepped. The issue has been considered by the European Commission in a recent Proposal and by the European Scrutiny Committee of the UK Parliament, in which it expressed reservations regarding the approach proposed by the European Commission.

Author: Andrew Tweeddale

Tags: arbitrator's award in declaratory terms, arbitrator's award vs regulation judgement, conflicting decisions, enforcement of declaratory awards, West Tankers

September 1, 2011

Are ‘binding’ DAB decisions enforceble?

Four say YES:
• The arbitral tribunal in ICC Case 10619 considered that it was simply the law of the contract.
• This reasoning appears to have been followed in the DBF case.
• A sole arbitrator in ICC Case 16948/GZ, said a final award was OK (this is contrary to the Court of Appeal in Singapore’s guidance).
• A sole arbitrator in ICC Case 15751/JHN considered that a party should be required to pay that sum decided by the DAB and interest from the date when payment was due by way of damages for breach.

Three say NO:
• The Court of Appeal in Singapore (CRW v PGN) say NO in relation to a final award (and upheld the High Court’s decision to set aside the arbitral tribunal’s award, which was enforced by way of a final award) but, obiter, suggest that as long as the merits are placed before the arbitral tribunal, in principle, an interim or partial award enforcing should be possible.
• A sole arbitrator in ICC Case 16119/GZ suggests that a partial final award and consequently also a final award are inappropriate devices to allow enforcement but suggests, obiter, that an interim award might be effective.
• The sole arbitrator in ICC Case 16949/GZ concluded that damages could not include the sum adjudged as due by the DAB and so declined to enforce.

Author: Taner Dedezade

Tags: binding DAB decisions, enforcing binding DAB decision, FIDIC, FIDIC 1999, Persero

October 1, 2011

Asia & Australasia

Experience includes: Road projects in Vietnam, India, Kyrgyzstan, Malaysia, Ukraine […]

Tags: Bangladesh, Borneo, Bridge construction in Vietnam, Bridges, Building projects in Hong Kong, Buildings, construction of a sea wall in Oman, Dredging, Dredging works in Australia, Energy and power projects in Laos, Energy projects in Abu Dhabi, Heavy industrial projects in Qatar, Hydropower Project in Pakistan, India, Indonesia, Jordan, Kyrgyzstan, Malaysia, Malaysia and Ukraine, Port project in India, Rail project in Abu Dhabi, Rail projects in Vietnam, Road projects in Vietnam, Roads, Saudi Arabia, the Seychelles, uilding projects in Lebanon, water treatment, waterpark project in Abu Dhabi

December 22, 2011

Europe

Experience includes: Road projects in Poland, Romania, Gibraltar, Albania, Iceland, […]

Tags: airport construction Gibraltar, building construction project Gibraltar, building construction project Romania, building construction project Ukraine, Buildings, Dredging, dredging construction Albania, dredging construction Romania, dredging construction Southern Europe, dredging construction the Baltic, energy and power construction project Gibraltar, energy and power construction project Iceland, energy and power construction project Serbia, energy and power construction projects Holland, rail construction project Bulgaria, rail construction project Romania, road construction project Albania, road construction project Gibraltar, road construction project Iceland, road construction project Poland, road construction project road construction project road construction project road construction project road construction project road construction project Romania, Roads, waste and water construction priject Turkey, waste and water construction project Bulgaria, waste and water construction project Romania, waste and water project Croatia, water treatment

Americas

Experience includes: Advising on consultant’s contract in Trinidad Advising on […]

Tags: energy project in Chile, energy project in Peru, Port project in Trinidad

Enforcement of DAB decisions – The legal justification for the ‘enforcement’ of a ‘binding’ DAB decision under the FIDIC 1999 Red Book

Read the full article here.

Author: Taner Dedezade

Tags: damages for breach of sub-clause 20.4, Enforcement of DAB awards, enforcing binding and final DAB awards, FIDIC, FIDIC 1999, final award, ICC rules, interim award, order, partial award, power to grant specific performance, provisional award

March 1, 2012

S69- Of Chablis, Smoked Salmon and Trifles

In the first two months of 2013 twelve cases were reported that dealt with Arbitration Act 1996 (“AA”) issues. Of these twelve cases, a quarter involved applications for leave to appeal under s.69(3) AA 1996 and a further quarter dealt with applications under s.68 (serious irregularities). The statistics are not surprising. The AA 1996 has now been in force for a little over 16 years and a substantial body of case law exists. However, when a party loses a case it may feel that it has no option but to challenge the award. There are often commercial reasons for this and/or the unsuccessful party may also feel genuinely aggrieved by the award. The recent case law dealing with leave to appeal has, however, shown that challenging an award under s.69 AA 1996 is no easy option.
This article considers the grounds on which leave to appeal an arbitrator’s award will be granted. The courts, when considering an application for leave to appeal, place high hurdles for any applicant to overcome. Leave to appeal under s.69(3) was not granted in any of the reported cases on Bailii up to 1 March 2013 this year. However, it is evident from the reported cases that some applications for leave to appeal are successful, especially where the issue relates to matters of general public importance: Dalmare SpA v Union Maritime Ltd & Anor.

Author: Andrew Tweeddale

Tags: Challenging an arbitral award, leave to appeal in arbitration, s69 Arbitration Act

January 1, 2013

Mind The Gap: Analysis of Cases and Principles Concerning the Ability of ICC Arbitral Tribunals to Enforce Binding DAB Decisions Under the 1999 FIDIC Conditions of Contract

Read the full article here.

Author: Taner Dedezade

Tags: arbitration, binding but not final DAB decisions, binding DAB decision, Dispute Resolution, Enforcement of DAB awards, enforcing binding DAB awards, FIDIC 1999, final award, ICC arbitration, interim award, Interim relief, partial award, Persero

January 1, 2014

FIDIC Guidance Memorandum – A Half Baked Solution?

This article discusses whether the recently issued FIDIC Guidance Memorandum really does provide the answer to the vexed question of enforcement of binding, but not yet final DAB decisions.
On 1 April 2013 the FIDIC Contracts Committee issued a Guidance Memorandum to users which is intended to be used with the Conditions of Contract for Construction (the ‘Red Book’), the Conditions of Contract for Plant and Design-Build (the ‘Yellow Book’), and the Conditions of Contract for EPC/Turnkey Projects (the ‘Silver Book’). The FIDIC Contracts Committee have stated that compliance with the guidance is highly recommended when using the 1999 FIDIC Red, Yellow or Silver Books. This article considers briefly whether the Guidance Memorandum is either necessary or useful.

Author: Andrew Tweeddale

Tags: binding but not final DAB decisions, binding DAB decision, enforcement of binding DAB awards, FIDIC 1999, FIDIC Guidance memorandum, ICC arbitration, Persero

June 1, 2014

Tunnel Vision: The English High Court Considers the FIDIC Yellow Book

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.

Author: Victoria Tyson

Tags: 1999 Yellow Book, address for service of notices, Airports, English High Court, FIDIC, GoG, notice, Obrascon v Gibraltar, OHL, sub-clause 20.2, termination, Yellow Book

September 1, 2014

Light at the end of the tunnel? Gibraltar dispute reviews key FIDIC Yellow Book provisions

As disputes under the FIDIC forms of contract are normally resolved in private Dispute Adjudication Board (“DAB”) proceedings or confidential arbitration proceedings, reported FIDIC cases are rare and often of considerable precdential value either formally or informally. In this article, originally published in The International Construction Law Review, Corbett & Co. Director Victoria Tyson considers one such recent decision which was transferred from the Gibraltar courts.

Author: Victoria Tyson

Tags: 1999 Yellow Book, arbitration, DAB, FIDIC, International Construction Law Review, TCC, Technology and Construction Court, Yellow Book

September 14, 2014

Indemnity Costs – you’ll be lucky! Interim Payment of Costs – definitely maybe

Even if a claimant has achieved complete success in litigation, it remains exceptionally difficult to recover legal costs on an indemnity basis, as this case demonstrates. Costs will most likely be recovered on the standard basis – at least in the absence of bad conduct during the litigation itself. This case also indicates that the court will generally limit an interim payment of costs to two-thirds of an approved costs budget.

Author: Victoria Tyson

Tags: 1999 Yellow Book, Airports, FIDIC, GoG, indemnity costs, interim payment, Obrascon v Gibraltar, OHL

November 12, 2014

BoQ rates neither ‘immutable nor sacrosanct’

A contractor who has loaded a tender BoQ rate in the expectation of a windfall will be interested to learn that recent guidance from the Hong Kong Court of Appeal supports the engineer’s request for evidence of the original tender build up and, among other things, will disallow all loading if substantial differences in actual quantities would make it reasonable to do so under the contract. This article explores that new guidance which finds contract rates to be neither immutable nor sacrosanct in such circumstances.

Author: Steve Mangan

Tags: 1999 Red Book, Bill of Quantities, BoQ, BOQ tender rate, FIDIC

November 13, 2014