The Baby is Back in the Bath: Liquidated Damages in the UK Supreme Court
In March 2019, in the English Court of Appeal, Sir
Jurisdiction, Admissibility and FIDIC
An issue that often arises in international arbitrations involving the FIDIC forms of contract is whether a claimant's failure to: (a) go through the dispute resolution provisions; or (b) comply with a time-bar clause gives rise to a question of admissibility or jurisdiction. Put another way, if a claimant has failed to issue a notice of claim within 28 days or failed to refer a dispute to a DAB, does the arbitral tribunal have jurisdiction to make an award on the merits or should the arbitral tribunal make an award stating that it lacks jurisdiction?
Tribunal Secretaries: Tasks, Transparency and Regulation
Background The debate surrounding the use of tribunal secretaries in
Damages at Large: Triple Point, FIDIC and the TCC
Triple Point Technology, Inc v PTT Public Company Ltd [2019]
FIDIC’s Emerald Book – A contractor’s charter or optimum risk allocation?
It has been suggested that FIDIC’s new Emerald Book may be “a contractors’ charter for riches”. 1 This article examines whether this new form of contract for underground works by FIDIC and the International Tunnelling and Underground Space Association is too contractor-biased or whether it provides a sensible and pragmatic risk allocation process, in an area of construction and engineering which is well known for claims. If more risks are placed on the Employer in this form of contract, what are the benefits of the contract compared to, for example, an unamended FIDIC Yellow Book?
Arbitration in a Post-Brexit World
This article considers what the arbitration landscape will look like when (or perhaps if!) the UK leaves the EU and concludes that big changes are unlikely.
FIDIC 2017 – First Impressions of the 3-Kilo Suite
In London last week, FIDIC launched its Second Editions of the Red, Yellow and Silver Books. They are big, weighing in at almost a kilo each. The general conditions cover 106 pages with more than 50,000 words, over 50% longer than the 1999 forms. Many improvements have been made, addressing issues that have emerged since 1999. Fans of Dispute Boards will be pleased to see that all three books now have standing boards with more emphasis on dispute avoidance; and that appointment of DB members and enforcement of their decisions have been made easier. Disputes and Arbitration are now dealt with in a separate chapter 21. Here are the most interesting changes to the Yellow Book.
A Surprise Award of Third Party Funding Costs
Third party funding is increasingly used by claimants in international arbitration even though the cost can be significant. To the surprise of many, the English Commercial Court recently held in Essar v. Norscot that a winning claimant could recover from the losing respondent the cost of obtaining third party funding as a cost in the arbitration. So, what exactly is third party funding and what are the implications of Essar v. Norscot for parties involved in international arbitration.
The Risk of Relying on the Obrascon case’s ruling on Sub-Clause 20.1 Claim Notices
Contractors are sometimes concerned about the politics of their FIDIC 1999 Sub-Clause 20.1 notices. Some Contractors may consider that serving Sub-Clause 20.1 notices may send the wrong message, particularly in the honeymoon period when the works have just begun. However, the consequences of failing to serve a timely claim notice are so dire that doubtless the issue is regularly on every Contractor’s mind. The case of Obrascon Huarte Lain SA v Her Majesty's Attorney General for Gibraltar1 in the Technology and Construction Court of England and Wales provided some welcomed relief to many Contractors worldwide who may now attempt to rely on its finding on the timing of claim notices when postponing service of these crucial notices.
Unjust Enrichment and Construction Contracts – A Cinderella Story?
Two decades ago, unjust enrichment was described as “the Cinderella of law, barely 10 years old but growing up rapidly. Until recently unrecognised and overshadowed by the ugly sisters, Contract and Tort, Cinderella’s day has arrived.” In England a claim for unjust enrichment was initially referred to as a claim in ‘quasi contract’. This language has now been abandoned and unjust enrichment has a strong foothold in the landscape of commercial law and its role and limits are becoming more clearly defined. Despite this, it is only infrequently pleaded in construction cases and when argued it is often set out in broad terms where the facts do not support such a claim. However, this is cause of action that should not be overlooked by a contractor or employer – especially if they have claims that fall outside the four corners of their construction contract.
Murphy’s Law
Earlier this year, the English High Court considered a heavily amended FIDIC Yellow Book 1999. Whilst the case is specific to the particular contractual amendments it is worth review. The case is J Murphy & Sons Ltd v Beckton Energy Ltd. It proceeded in court and on an expedited basis as a matter of some urgency because a bond was about to be called for non-payment of delay damages. The Contractor claimed the call would affect his commercial reputation, standing and creditworthiness, and may well need to be disclosed in future tenders. He had not paid the delay damages because there had been no agreement or determination of the entitlement to such by the Engineer under Sub-Clauses 2.5 and 3.5.
The SCL’s New Take on the Delay and Disruption Protocol
In June of this year, the Society of Construction Law (“SCL”) sent its members a draft of the second edition of its widely recognised Delay and Disruption Protocol. It follows the publication of a Rider published late last year about which this author wrote a previous article. Although the “2016 Draft” is meant to be consultatory, there are a number of improvements from the “2002 Edition” worth exploring before the final and definitive version is published sometime in the future. There have been many changes not all of which will be covered in this article and, in any case, I will only focus on changes other than those already included in the Rider.
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.
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]
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.
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.
Can an Employer Instruct an Airport Instead of a Road?
What is the point of a variations clause? It is
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.
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.
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.
