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Construction Disputes under the FIDIC Contracts in our Region Piotr Nowaczyk 2014
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Construction Disputes under the FIDIC Contracts in our Region

Dec 09, 2016

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Page 1: Construction Disputes under the FIDIC Contracts in our Region

Construction Disputes

under the FIDIC Contracts

in our Region

Piotr Nowaczyk

2014

Page 2: Construction Disputes under the FIDIC Contracts in our Region

FIDIC - International Federation of Consulting

Engineers

2

Fédération

Internationale

Des

Ingénieurs

Conseils

founded in 1913, Geneva

Page 3: Construction Disputes under the FIDIC Contracts in our Region

SIDiR

3

Stowarzyszenie

Inżynierów

Doradców

i

Rzeczoznawców

beginning in 1914, Warsaw

Page 4: Construction Disputes under the FIDIC Contracts in our Region

FIDIC

4

• Over 90 countries have joined FIDIC

• Goals:

• represent the consulting engineering industry globally,

• enhance the image of consulting engineers,

• promote a consulting engineering industry,

• promote quality,

• promote a code of ethics.

Page 5: Construction Disputes under the FIDIC Contracts in our Region

RED Book – The fourth edition (1987)

5

RED Book – Conditions of Contract for Works of Civil Engineering

Construction

International Form of Contract, independent of any particular Judicial

System

Page 6: Construction Disputes under the FIDIC Contracts in our Region

FIDIC Standard Forms of Contract

6

• New 1999 collection

• The new RED Book 1999

• The new YELLOW Book 1999

• The SILVER Book 1999

• The GREEN Book 1999

• Who will be responsible for the Design?

Page 7: Construction Disputes under the FIDIC Contracts in our Region

The New RED Book

Conditions of Contract for

Construction

for building and engineering works

designed by the Employer

7

Page 8: Construction Disputes under the FIDIC Contracts in our Region

The New YELLOW Book

Conditions of Contract for

Plant and Design-Build

for electrical & mechanical plant &

for building and engineering works

designed by the Contractor

8

Page 9: Construction Disputes under the FIDIC Contracts in our Region

The SILVER Book

Conditions of Contract for

EPC / Turnkey Projects

„EPC” means Engineering,

Procurement and Construction.

Recommended for the provision on

a turn key basis of a plant.

Contractor takes total responsibility

for the design and execution of

infrastructure project.

9

Page 10: Construction Disputes under the FIDIC Contracts in our Region

The GOLD Book

Conditions of Contract for

Design,

Build

and Operate Projects

10

Page 11: Construction Disputes under the FIDIC Contracts in our Region

The GREEN Book

Short Form of Contract

Recommended for relatively simple

work of short duration.

11

Page 12: Construction Disputes under the FIDIC Contracts in our Region

The FIDIC Approach

12

Employer’s Risk Contractor’s Risk

Price Cost and duration

RISK

PRICE

RED YELLOW SILVER

Page 13: Construction Disputes under the FIDIC Contracts in our Region

Risks

13

• Insurable Risks • risks of loss or damage or injury occurring during the project’s Life, including:

• Consequences of accidents due to defective design

• „Acts of God”

• Fire

• Human Error

• Un-Insurable Risks • leading to Financial and/or time Loss including:

• Late Possession of Site

• Changes in design

• Variations

Page 14: Construction Disputes under the FIDIC Contracts in our Region

Multistep Clause 20

14

• Notice

• Claim

• Engineer Determination

• Dispute

• DAB

• Adjudication

• Dissatisfaction

• Amicable settlement

• Failure to comply

• Arbitration

Page 15: Construction Disputes under the FIDIC Contracts in our Region

Notice – clause 20.1

15

Sub-Clause 20.1 [Contractor’s Claims] – mainly for time or money

• The Contractor shall give a 28 days Notice to the Engineer after it

became aware of any event giving rise to a claim for:

Additional Payment or Extension of Time for completion

• Failure to give notice within 28 days will make the claim time-barred

Page 16: Construction Disputes under the FIDIC Contracts in our Region

Claim – clause 20.1

16

• Fully detailed Claim with supporting particulars within 42 days

• Interim Claims possible at monthly intervals

• Final Claim within 28 days after the end of the effects resulting from the

event or circumstnces

Page 17: Construction Disputes under the FIDIC Contracts in our Region

Determination – clause 20.1

17

• Within 42 days after receiving a claim

• The Engineer shall make „a fair Determination” with approval or

disapproval

• agree or determine the Extension of Time

• and/or the Additional Payment

Page 18: Construction Disputes under the FIDIC Contracts in our Region

Disputes – clause 20.4

18

• If a dispute arises between the Parties

in connection with, or arising out of, the Contract or the execution of

the Works

either Party may

refer the Dispute in writing

to the DAB for its decision

Page 19: Construction Disputes under the FIDIC Contracts in our Region

Dispute Adjudication Board (DAB)

19

Page 20: Construction Disputes under the FIDIC Contracts in our Region

Appointment of DAB – clause 20.2

20

• Ad hoc or standing DAB

• Standing DAB jointly appointed within the period stated in Appendix to

Tender

• DAB shall include 1 or 3 members

• A three Members DAB – each Party shall nominate 1 member

• The Parties will consult both members and shall agree upon the

Chairman

• Dispute Adjudication Board Agreement

• Each Party pays half of the DAB’s total remuneration

Page 21: Construction Disputes under the FIDIC Contracts in our Region

Adjudication

21

• Clause 20.2

• Disputes shall be adjudicated by a DAB

• Clause 20.4

• Within 84 days the DAB shall give its decision

• The decision shall be binding

Page 22: Construction Disputes under the FIDIC Contracts in our Region

Dissatisfaction – clause 20.4

22

• Either Party may within 28 days after receiving the Decision give:

„Notice of its Dissatisfaction”

Page 23: Construction Disputes under the FIDIC Contracts in our Region

Amicable Settlement – clause 20.5

23

• Both Parties shall attempt to settle the dispute amicably before the

commencement of arbitration.

• Mediation

• Arbitration may be commenced on or after

the 56 day after the day on which Notice of Dissatisfaction was given,

even if no attempt at amicable settlement has been made.

Page 24: Construction Disputes under the FIDIC Contracts in our Region

Arbitration – clause 20.6 - general

24

• Unless settled amicably, any dispute in respect of which the DAB’s

decision (if any) has not become final and binding shall be finally settled

by international arbitration.

• Unless otherwise agreed by both Parties:

• The dispute shall be finally settled under the Rules of Arbitration of the

International Chamber of Commerce (ICC)

• The dispute shall be settled by 3 arbitrators appointed in accordance with these

Rules

• Arbitration may be commenced prior to or after completion of the Works.

Page 25: Construction Disputes under the FIDIC Contracts in our Region

Failure to Comply – clause 20.7

25

• In the event that:

• neither Party has given Notice of Dissatisfaction,

• the DAB’s related decision (if any) has become final and binding, and

• a Party fails to comply with this decision,

then the other Party may refer the case directly to Arbitration.

Page 26: Construction Disputes under the FIDIC Contracts in our Region

Summary

26

Notice 28 days 4

Claim (Interim claims) 42 days 6

Determination (approval / disapproval) 42 days 6

Dispute

DAB

Decision 84 days 12

196 days 28 weeks

Dissatisfaction 28 days 4

Amicable Settlement (mediation) 56 days 8

or Failure to Comply

Arbitration ? ?

Page 27: Construction Disputes under the FIDIC Contracts in our Region

International Court of Arbitration ICC

27

• Established in 1923

• The most recognized ADR

institution world-wide

• 132 members of the Court from

85 countries

International Chamber of Commerce

33-43 avenue du Président Wilson

75116 Paris, France

Tel.: +33 1 49 53 28 28

Fax: +33 1 49 53 28 59

Page 28: Construction Disputes under the FIDIC Contracts in our Region

ICC Arbitration Clause

• „Wszelkie spory wynikające z niniejszego kontraktu lub w związku z nim

będą rozstrzygane ostatecznie stosownie do Regulaminu Arbitrażowego

Międzynarodowej Izby Handlowej przez jednego lub więcej arbitrów

wyznaczonych zgodnie z tym Regulaminem.”

• “All disputes arising out of or in connection with the present contract shall

be finally settled under the Rules of Arbitration of the International

Chamber of Commerce by one or more arbitrators appointed in

accordance with the said Rules.”

28

Page 29: Construction Disputes under the FIDIC Contracts in our Region

The Court of Arbitration

at the Polish Chamber of Commerce in Warsaw

29

• The biggest and the most

recognized arbitration court in

Poland

• Established in 1950

• Domestic and international cases

• 249 Recommended Arbitrators

SA KIG

Trębacka 4

00-074 Warszawa

T: +48 22 827 47 54

F: +48 22 827 94 01

E: [email protected]

Page 30: Construction Disputes under the FIDIC Contracts in our Region

PCC statistics

30

Year 2008 2009 2010 2011 2012 2013

Total number of cases 260 352 440 396 304 317

Construction disputes 64

(25%) 79

(22%) 94

(21%) 79

(20%) 79

(26%) 76

(24%)

Page 31: Construction Disputes under the FIDIC Contracts in our Region

31

Contact details

DENTONS Rondo ONZ 1

00-124 Warszawa

T: +48 22 242 52 52

F: +48 22 242 52 42

E: [email protected]

www.dentons.com

Thank you

Dziękuję

Piotr Nowaczyk

Partner

Tel.: 22 242 52 52

Fax: 22 242 52 42

Email : [email protected]