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FIDIC’s Silver Book – Payments due shall not be withheld … really?
There is a substantial difference between the payment provisions of the FIDIC 1999 Red and Yellow Books compared with the Silver Book. This article explores how a court in Queensland (Australia) has dealt with the Silver Book’s provision. Contractors have good cause to be wary.
Author: Andrew Tweeddale
Tags: 1999 Red Book, 1999 Yellow Book, Clause 14, DAB, DSB, FIDIC, FIDIC 1999 Red Book, Interim Payment Certificate, Silver Book, sub-clause 14.6, sub-clause 14.7, sub-clause 16.2, Yellow Book
November 14, 2014
Can a party ignore FIDIC’s DAB process and refer its dispute directly to arbitration?
If there is no DAB appointed by the parties to a FIDIC 1999 contract, may disputes be referred directly to arbitration under clause 20.8? This issue has troubled many in the industry – and has now been considered in English and Swiss courts.
Author: Taner Dedezade
Tags: 1999 Red, DAA, DAB, DAB process, FIDIC, FIDIC 1999 contract, Red Book, Silver Book, sub-clause 20.2, sub-clause 20.3, sub-clause 20.8, sub-clauses 20.5 and 20.6, Yellow and Silver Books, Yellow Book
November 17, 2014
Comparison between the Red Book 1999 and the MDB Harmonised Edition Pink Book 2010
Read the full article here.
Author: Edward Corbett
Tags: FIDIC, MDB Harmonised Edition 2010, Pink Book 2010, Red Book 1999
January 1, 2015
The Problem with Enforcing Arbitration Awards that have been Annulled
The purpose of the 1958 New York Convention is to facilitate so far as possible the international recognition and enforcement of foreign arbitral awards. Nevertheless it provides that a court may refuse to do that if such an award has already been set aside or suspended at its seat. The English courts have interpreted this word ‘may’ as giving themselves a wide discretion. But it is one that in practice is likely to result in a refusal to enforce.
Author: Andrew Tweeddale
Tags: 1958 New York Convention, arbitration awards, foreign arbitral awards
March 9, 2015
Time Waits for no Man – So you think the Adjudicator got it wrong? How long do you have to challenge the decision?
How long have you got to challenge the adjudicator’s decision? The English Court of Appeal has decided:
1) the claimant who considers the adjudicator awarded too little must challenge before the original limitation period for his claim expires; and 2) the defendant who considers he paid too much has a new limitation period starting on the day he paid the adjudicator’s decision.
Is it unfair that the loser may have years longer than the winner? That question will soon be answered by the Supreme Court of the United Kingdom. Their decision will be of interest to anyone involved with FIDIC DABs anywhere in the world.
Author: Dominic Helps
Tags: adjudication law, Aspect v Higgins, DAB, FIDIC, TCC, UK statutory adjudication
Can an Employer Instruct an Airport Instead of a Road?
What is the point of a variations clause? It is […]
Author: Corbett Lawyers
Tags: Clause 13, FIDIC Red Book, FIDIC Silver Book, FIDIC standard forms, FIDIC Variation Clause, FIDIC Yellow Book, sub-clause 13.1 Airports
Time’s up for FIDIC’s Pink Book?
Rumour reaches us that the Multilateral Development Banks (MDBs) behind the Pink Book, FIDIC’s harmonised version of the 1999 Red Book, will discontinue the experiment. Should we be sorry to see the back of the Pink Book? We think not.
Author: Edward Corbett
Tags: 1999 Red Book, 2nd Editions of Red, Clause 14.2, Clause 14.9, Clause 15.5, Clause 16.4, Clause 20.1, Clause 3.5, Clause 4.2, Clause 8.1, clauses 15.6-16.2, FIDIC, FIDIC Red Book, FIDIC Silver Book, FIDIC Yellow Book, MDBs, Multilateral Development Banks, Pink Book, Yellow and Silver Books
Cutting the Gordian Knot: Enforcing Awards where an Application has been made to set aside the award at the seat of arbitration
One of the grounds where a New York Convention award may be refused recognition and enforcement is where the award has not yet become binding on the parties, or has been set aside or suspended by a competent authority of the country in which, or under the law of which, that award was made. A similar provision exists in the English Arbitration Act 1996 s.103(2)(f). Under both the New York Convention and the Arbitration Act 1996 the word “may” is used which indicates that even if the award has been set aside at the seat of the arbitration it might still be enforced in another country. This article focuses on recent developments under English law as to how the courts have dealt with the enforcement of annulled awards. We also examine the Arbitration Act 1996 s.103(5) which provides that where an application for the setting aside or suspension of the award has been made to the relevant court, the court before which the award is sought to be relied upon may, if it considers it proper, adjourn the decision on the recognition or enforcement of the award.
In countries which have adopted modern arbitration laws there is an almost universally held pro-enforcement attitude when considering international arbitration awards. However, when an award is challenged, or has been set aside at the seat of the arbitration, the enforcing courts may have to consider the status of the award. One view is that an award that has been set aside at the seat has no legal status and therefore there is nothing to enforce. An opposing view is that the annulment of the award at the seat of the arbitration does not affect its validity. The English courts have, however, approached the question in a pragmatic way. They have rejected an approach based on legal theory and simply applied a test as to when an award, which has been set aside, should or should not be enforced.
Author: Andrew Tweeddale
Tags: annulled award, arbitration, Enforcing arbitral awards, enforcing awards, Gordian Knot, New York Convention, seat of arbitration, setting aside an arbitral award
May 1, 2015
Court of Appeal confirms judgment in Obrascon v Gibraltar
The Judgment of Sir Robert Akenhead has been upheld and OHL’s appeals have been dismissed. The judgment was a rare excursion by the TCC into the FIDIC contract and considered unforeseen ground conditions, termination and notice under cl.20.1. Corbett & Co. acted for the Government of Gibraltar.
Author: Edward Corbett
Tags: FIDIC, FIDIC contract, Government of Gibraltar, Obrascon v Gibraltar, TCC
July 9, 2015
Direct Claims by Subcontractors against Employers
A summary of contributions from around the world from members of the Cornerstone FIDIC Group on LinkedIn.
Author: Edward Corbett
Tags: direct claims, FIDIC, FIDIC claims, subcontractors
August 4, 2015
Release from Performance – FIDIC’s Clause 19.7 and Other Remedies
Is not uncommon to find that an employer attempts to pass almost all risk in a contract to the contractor. However, such an approach may have unforeseen consequences when events later make completion of the works impossible. Here Andrew Tweeddale considers how and when a contractor might be released from further performance.
Author: Andrew Tweeddale
Tags: Clause 19.7, FIDIC, FIDIC Clause 1.13, FIDIC Red Book, FIDIC Silver Book, FIDIC Yellow and Red Books, FIDIC Yellow Book
September 4, 2015
FIDIC’S procedures for the appointment of a DAB need improvement
If the parties to a FIDIC contract cannot agree on a suitable DAB member and they have selected FIDIC as their appointing entity, they may request FIDIC to appoint that DAB member. FIDIC’s present procedures however seem less than ideal. They increase the prospect of rejection of the candidate nominated by FIDIC in the first instance and so also the need to repeat the exercise. They could also result in an appointment unacceptable to one or both parties. In my view they need to be revised.
Author: Steve Mangan
Tags: 1999 Red, DAB, FIDIC, FIDIC 4th edition of Red Book, FIDIC Red Book, FIDIC Silver Book, FIDIC Yellow Book, sub-clause 20.2, sub-clause 20.3, Yellow and Silver Book contracts
September 14, 2015
PERSERO 2 – Singapore Court of Appeal rules DAB decisions are enforceable by way of interim award
On 27 May 2015, the 160-page reserved judgement of the Singapore Court of Appeal (“CA”) was handed down in Persero 2 – PT Perusahaan Gas Negara (Persero) TBK (“PGN”) v CRW Joint Operation (“CRW”)[1]. It will be regarded a triumph for contractors wishing to enforce DAB decisions. The CA ruled that the interim award issued by the arbitral tribunal ordering enforcement of the DAB’s decision should stand. Using the concept of an “inherent premise”, the CA made two important findings: 1) it was not necessary for the Contractor to refer the failure to pay (the secondary dispute) back to the DAB; and 2) it was not necessary for him to refer the merits (the primary dispute) in the same single arbitration as his application to enforce.
Author: Taner Dedezade
Tags: 1999 Red Book, arbitration tribunal, DAB, FIDIC, FIDIC Red Book, inherent premise, interim award, Singapore, Singapore Court of Appeal, sub-clause 20.4, sub-Clause 20.5, sub-clause 20.6, sub-clause 20.7
Aspect v Higgins: The Final Reckoning
How long do you have to challenge an adjudicator’s decision?
Controversially, the English Supreme Court has now ruled as follows:
If you were the loser and required to pay monies, you will have the full limitation period, typically six years, to bring your claim to recover those monies starting from when you were required to make payment to the winner; whereas
If you were the winner, your right to seek an improvement of the result will come to an end at the same time as the limitation period for the original claim.
Author: Corbett Lawyers
Tags: adjudication, Aspect v Higgins, limitation period, recovery of monies, restitution argument, Supreme Court, TCC, The Contract Argument, The Restitution Argument
Knowledge Hub – externally published articles
Articles on Arbitration The Need For Reasons – O, Reason […]
Tags: arbitration, Clause 20, DAB decisions, English Arbitration Act 1996, FIDIC, FIDIC 4th, FIDIC contracts, FIDIC Yellow Book, ICC arbitral tribunal, Pink Book 2010, Red Book 1999, s69
December 9, 2015
Corbett & Co. Director contributes chapter to CIArb liber amicorum
Corbett & Co. Director Andrew Tweeddale has contributed a chapter to the Chartered Institute of Arbitration (CIArb) liber amicorum recently published in celebration of its centenary.
Andrew has written a chapter entitled “Shifting the Burden of Proof: Revisiting Adjudication Decisions”. He comments: “I was delighted to be invited to contribute to this publication, especially as this is the CIArb’s centenary.”
Author: Corbett Lawyers
Tags: arbitration, C.I.Arb, FIDIC
December 10, 2015
FIDIC’s Sub-Clause 20.5 – A Condition Precedent to Arbitration
The 1999 FIDIC forms of contract contain a number of obligations and/or conditions precedent that require (a) a party to give notice of a claim (Sub-Clauses 20.1 and 2.5); (b) refer the claim to the Engineer (Sub-Clauses 20.1 and 3.5); and (c) submit the dispute to a Dispute Adjudication Board (“DAB”) (Sub-Clause 20.4). If either party gives a notice of dissatisfaction relating to the DAB’s Decision then Sub-Clause 20.5 provides that:
“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 fifty-sixth day after the day on which notice of dissatisfaction was given, even if no attempt at amicable settlement has been made.”
Author: Andrew Tweeddale
Tags: 1999 FIDIC Forms of Contract, a condition precedent, arbitration, DAB, FIDIC, Red, sub-clause 2.5, sub-clause 20.1, sub-clause 20.4, sub-Clause 20.5, sub-clause 3.5, Yellow and Silver Books
December 16, 2015
Employers Beware
How important is it for an Employer to give a Sub-Clause 2.5 notice of a set-off or cross-claim under the FIDIC Red Book form of contract? Very, according to the Privy Council in NH International (Caribbean) Limited v National Insurance Property Development Company Limited . It found that:
o Sub-Clause 2.5 applies to any claims the Employer wishes to make.
o The Employer must make such claims promptly and in a particularised form.
o Where the Employer fails to raise a claim as required, the back door of set-off or cross-claims is firmly shut.
The case also serves as a warning to Employers who take a relaxed view towards their obligation under Sub-Clause 2.4 to provide reasonable evidence of the financial arrangements they have made and are maintaining to pay the Contract Price. It doesn’t matter how wealthy or important the Employer is (it may be a Government, company or individual with very substantial funds) detailed financial information must still be provided.
Author: Victoria Tyson
Tags: Contract Price, FIDIC, FIDIC Red Book, sub-clause 2.4, sub-clause 2.5
Society of Construction Law’s Rider 1 to its Delay and Disruption Protocol
In July of this year, the Society of Construction Law (SCL) published Rider 1 (“the Rider”) of its 2002 Delay and Disruption Protocol (“the Protocol”). The Rider’s Preamble lists a series of amendments to the Protocol intended to serve as an update reflecting (a) legal and industry practice developments, (b) feedback, (c) technological developments, (d) increase in scale of larger projects, and (e) international use of the Protocol. The Rider is intended to serve as the first part of the amendments to the Protocol, the totality of which should feature in a consolidated and updated version of the Protocol later this year.[1]
Author: Gabriel Mulero Clas
Tags: delay and disruption protocol, Protocol, Rider 1, SCL
Where Do FIDIC Cases Go?
FIDIC is arguably the most widely used standard form of international construction contract but reported FIDIC cases are rare. Is it time for an increased publication of FIDIC cases?
There are three categories of decisions arising out of FIDIC dispute resolution provisions:
1. Decisions of the Engineer or the Dispute Adjudication Board (DAB), which will generally not be published or reported to anyone other than the parties involved in the dispute.
2. Decisions of arbitral tribunals, which are not usually made public although this is subject to certain exceptions.
3. Decisions of national courts, which are a relatively rare occurrence for the reasons discussed below.
Author: Joanne Clarke
Tags: 1999 Red Book, 1999 Yellow Book, arbitration, DAB, FIDIC, FIDIC-related arbitral awards, ICC, reported FIDIC cases
Frozen Out
What relief does FIDIC provide when bank accounts are frozen as a result of war, hostilities, rebellion, terrorism etc.? Maybe not as much as you think.
Tensions in Africa and the Middle East have seen the implementation of numerous international financial sanctions. While these sanction regimes vary in execution and enforcement they often freeze assets and prevent financial transactions. These restrictions may impact on the Employer’s performance of its payment obligations under the Contract. This can have serious consequences where the Contractor is entitled to suspend or terminate on notice for non-payment. Many parties automatically assume that financial sanctions will be recognised as force majeure. However, this may not be the case.
Author: Victoria Tyson
Tags: FIDIC, Force Majeure, sub-clause 14.8, sub-clause 16.1, sub-clause 16.2, sub-clause 19.1, sub-clause 19.2, sub-clause 19.6, sub-clause 19.7
ICC Arbitration – Penalties for Slow Arbitrators
In its bulletin of 5 January 2016, the ICC announced penalties to encourage arbitrators to deliver up their awards more quickly than at present. The tardiness of some arbitrators has long been cause for major discontent amongst both lawyers and clients. Corbett & Co.’s worst experience was a sole arbitrator who took more than 18 months to issue an award on a preliminary issue!
Author: Corbett Lawyers
Tags: ICC arbitration, ICC award
May 24, 2016
Cofely v Knowles – From Appointment to Disappointment
There have been two High Court cases within the last 15 months that lift the lid off what some perceive to be questionable practices (particularly in relation to the Eurocom case) that have developed over the last few years in the world of adjudication and arbitration in the UK. The first, in November 2014, was a decision of Ramsey J sitting in the Technology and Construction Court in Eurocom v Siemens PLC and the second, which is the focus of this article, was a decision of Hamblen J, in the Commercial Court in Cofely Limited v Anthony Bingham and Knowles Limited. Both of these cases illustrate the lengths to which some parties will go to steer the nomination process in order to secure the tribunal of their choice. Some view these practices as innocent forum shopping; others see them as tantamount to forum shop-lifting. What is becoming increasingly clear is that these practices have become by no means exceptional or even unusual. Hopefully the outcome of these cases will act as a real deterrent to these practices in the future.
Author: Dominic Helps
Tags: arbitration, CIArb, Cofely, Eurocom
The Highest UK Court Reviews The Law On Penalties
A penalty is now to be regarded as: “a secondary obligation which imposes a detriment on the contract-breaker out of all proportion to any legitimate interest of the innocent party in the enforcement of the primary obligation.” The UK Supreme Court has reviewed the English law of penalties and re-formulated the test in a landmark judgment on two unrelated appeals heard together: (1) Cavendish Square Holding BV – v – Talal El Makdessi (“Cavendish”); and (2) ParkingEye Ltd – v – Beavis (“Beavis”).
Author: Steve Mangan
Tags: Beavis, Dunlop, liquidated damages, penalties, Primary obligation, secondary obligation, UK Supreme Court
FIDIC 1999 Books – Commentary on Clause 1
Clause 1 sets out many of the boilerplate clauses within the Contract and provides a number of definitions which are used thereafter. The Clause has been substantially changed from the Red Book 4th edn with a raft of new clauses added.
Sub-Clause 1.3 deals with communications and states that approvals, certificates, consents and determinations shall not be unreasonable withheld or delayed.
The assignment provisions in Sub-Clause 1.7 have now changed so that restriction on assignment applies to both the Contractor and Employer.
Delayed Drawings and Instructions is dealt with at Sub-Clause 1.9. This was previously dealt with at Clause 6.4 of the Red Book 4th edn and it is unclear why such an important provision has now been rolled up in the General Provisions clause.
Author: Andrew Tweeddale
Tags: 1999, clause 1, FIDIC, General Provisions, red book 4th edn, sub-clause 1.7, sub-clause 1.9
July 19, 2016
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