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Contract Users’ Newsletter ISSUE 2 June/ July 2019

Published by the International Federation of Consulting Engineers (FIDIC)

www.fidic.org

FIDIC launches new tunnelling contract Major new contract launched for use in the tunnelling industry. FIDIC has teamed up with the International Tunnelling and Underground Space Association (ITAAITES) to publish a new form of contract for tunnelling and underground works, The Emerald Book. With underground construction a fast-growing market sector due to the increasing demand for use of underground space for infrastructure, the new Conditions of Contract for Underground Works (The Emerald Book ) is set to be widely used. Underground construction is highly dependent on the geological, hydrogeological and geotechnical properties of the ground, which have a defining influence on the methods required for the successful implementation of the works. In addition, the difficulty in predicting ground behaviour and foreseeable conditions implies an inherent uncertainty in underground construction which gives rise to unique contractual risks regarding construction practicability, time and cost. These risks are addressed in the new contract, which was launched in May following several years of intensive work

by a joint task group of representatives of FIDIC and ITA-AITES, who also identified several issues that the new contract should address to promote equitable risk allocation and the effective dealing with conditions typically unforeseeable in such projects. These issues include the following key areas: • Allocation of risk. • Disclosure of all available geological and geotechnical information. • Inclusion of a contractual geotechnical baseline. • Inclusion of a tailored “Unforeseeable Physical Conditions” clause. • Implementation of a ground classification system and of supporting particular conditions that properly reflect the effort of excavation and stabilisation. • Time for completion is largely influenced by ground conditions. • Provision of a flexible mechanism for remuneration according to ground conditions, foreseen and unforeseen.

Take-up of the new Emerald Book contract is expected to be widespread. FIDIC contracts committee chair Zoltán Záhonyi said: “Working together, FIDIC and ITA-AITES have created a contract that we believe, and hope will command the respect and authority of the tunnel engineering and construction sector and that both clients and contractors can use with confidence. The new Emerald Book addresses several critical areas that should lead to the smoother running of contracts in the growing tunnelling and underground works sector.”

FIDIC Asia Pacific Contract Users’ Conference Hong Kong, 25-27 June 2019

www.fidic.org


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How FIDIC contracts are produced Many participants at FIDIC’s contract users’ conferences have expressed an interest in understanding the FIDIC contract creation process. FIDIC working group chair, HUSNI MADI, who is also the CEO of Shura Construction Management, explains all. Huge effort and an intricate process lies behind the production of FIDIC contracts and the whole process is overseen by FIDIC’s contracts committee, which is responsible for drafting all FIDIC contracts. Several task groups assist the contracts committee in drafting publications and both are composed of knowledgeable professionals operating on a voluntary basis. Task groups report back to the contracts committee, which reports to the FIDIC board. Task group members are appointed by the contracts committee. Inception phase Once appointed, task group members are presented with terms of reference for a specific publication by the contracts committee and the group then meets in person to brainstorm how to develop the publication. This inception phase concludes with an inception report which outlines how the task group will go about its work. The report is reviewed by the

contracts committee and then the drafting process begins. Drafting phase The task group compiles all comments, observations, suggestions and current best practice from across the global construction industry and decides on its relevance to the publication it is working on. This ensures that FIDIC publications provide users with the most up-to-date best practices. Further enhancements are made to the contents of the inception report, in addition to contracts committee comments, and the final document begins to take shape. The drafting phase ends with the submission of the A-draft by the task group to the contracts committee, which then begins its review of the document. Review phase After concluding its review of the A-draft, the contracts

committee relays its comments to the task group, which takes these on board and produces a B-draft. The B-draft is reviewed by special advisors, highly respected senior experts and permanent FIDIC contributors, who give their feedback and a C-draft is produced which is then circulated to ‘friendly reviewers’ for their feedback. These friendly reviewers are expert professionals from within the FIDIC family, not involved in the drafting of the document, who act as peer reviewers of the draft publication. This feedback is then transmitted to the task group and a D-draft is produced which is then sent to legal advisors for their review. These internationally recognised lawyers ensure that FIDIC publications are legally sound and comply with international jurisdictions. Following this phase, the task group updates the D-draft

and produces a final draft for submission to the FIDIC board, which decides on final publication. Publishing phase Once the board approves a document, the FIDIC secretariat then assumes responsibility for publishing the document, organising its design, printing, sales, marketing and launch. Thereafter, the publication takes on a life of its own where FIDIC collects feedback from users across the global construction industry. This feedback is vital to the future updating of FIDIC publications as they evolve to reflect users’ actual experience and best practices. As you can see, significant effort lies behind the production of FIDIC publications and the critical acclaim and esteem in which these documents are held is well justified.


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FIDIC Asia Pacific Contract Users’ Conference

Hong Kong hub for contract discussion and debate FIDIC’s Asia Pacific Contract Users’ Conference in Hong Kong will provide essential networking and insightful guidance on successfully using FIDIC contracts, managing major projects, handling claims, dispute avoidance and resolution and lots more.

been received by the global industry, with initial feedback suggesting that the new suite is a big step forward for FIDIC and the wider construction sector. More than 30 FIDIC experts and contract users from the region will be present in Hong Kong The latest in FIDIC’s series of regional global to share lessons learnt in using FIDIC forms of conferences for users of its contracts gives contract to underpin some of the most challenging delegates the opportunity to hear first-hand from infrastructure projects in Asia. A number of new members of the FIDIC contracts committee and case studies from different industries and countries task groups, as well as leading expert advisors and have been assembled to help bring the benefits of users, on the latest developments regarding the using FIDIC contracts to life and to help delegates FIDIC Suite of Contracts. understand the practical challenges of FIDIC Novotel Century Hong Kong will host the application in practice. gathering and, as well as taking advantage of A new international contractors’ panel will excellent networking opportunities and guidance also bring together experienced contractors and inon successfully using the FIDIC standard forms house contract specialists from large infrastructure of contract, handling claims, dispute avoidance and engineering firms who are involved in the realand much more, attendees will also be able to world implementation of FIDIC take part in a number of new forms of contract. The panel will conference sessions including “More than 30 FIDIC discuss several critical areas of Global Implementation of FIDIC experts will be present contract administration including - Spotlight on China and Hong Kong and Preparing for the Emerald in Hong Kong to share optimisation opportunities and common pitfalls to avoid, as well Book (FIDIC’s new tunnelling and lessons learnt in as the latest trends in dispute underground works contract). using FIDIC forms of management and avoidance. Those present will also get contract” a recap on the main changes zzFIDIC is grateful to supporting introduced in the 2017 edition sponsors CMS, HFW and Pinsent Masons and contracts and the reasons why these were thought associate sponsor Clyde & Co for their support of the by FIDIC to be necessary or an improvement on event. previous editions. Delegates will also receive an update on how the new suite of contracts has


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Creating a sustainable society through renewable energy Japan Renewable Energy Corporation is using FIDIC contracts to help support its vision to create a sustainable society thorough offshore wind projects, as MASAKO LUISA ITOH explains. Japan Renewable Energy Corporation (JRE) was founded as an independent power producer specialising in renewable energy in August 2012, in the aftermath of the Great East Japan Earthquake and the Fukushima nuclear power plant accident. Climate change and increased of energy selfsufficiency are serious social issues confronting Japan. In response to these challenges, JRE’s vision is to take a leadership role in creating a prosperous and sustainable society thorough development of renewable energy. This vision is inspiring us to contribute to society with our longterm commitment to renewable energy, including planning and development of projects and operation for their entire life span. In just a few years, JRE has built a portfolio of around 50 power plants throughout Japan. JRE has also joined the UN Global Compact in April 2016, as the first renewable energy company in Japan to support the ten principles of the compact. Today, in addition to current solar, onshore wind and biomass projects, we are expanding to additional types of renewable energy, including offshore wind and hydroelectric power.

“Model contracts published by FIDIC are widely used all over the world and also well-known in the offshore wind industry.”

zz Masako Luisa Itoh is a senior staff in the procurement department (engineering and procurement division) at Japan Renewable Energy Corporation.

As part of that process, JRE is signing the license agreement with FIDIC to utilise the FIDIC model contact for the new offshore wind project planned in Akita Prefecture, Japan. In particular, we are applying Conditions of Contract for Plant and Design-Build (“FIDIC Yellow Book”) for the wind turbine procurement. We are currently working on the tender process aiming to select the preferred suppliers through fair competition and to bring down the procurement cost. “To procure turbines from foreign manufacturers with best price and best terms and conditions we surely need to conform with the global standards and industry standards,” says Mr Tai, JRE’s general manager procurement department/director of engineering and procurement division. Model contracts published by FIDIC are widely used all over the world and also well-known in the offshore wind industry. Furthermore, FIDIC has long-standing traditions and the model contracts have been heavily reviewed over the time which made the models well drafted, comprising and accommodating both party’s needs. Hence it provides us efficiency in contract negotiations and also credibility in due diligence process for lenders etc. We expect that our good relationship with FIDIC will support us achieving our vision to create a sustainable society thorough our offshore wind projects.


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FIDIC Golden Principles launched FIDIC has launched its Golden Principles to set out the essential characteristics of its general conditions of contract that should not be amended if the contract is to be regarded as a genuine FIDIC document. In a bid to safeguard the integrity of FIDIC contracts and to ensure that the clients and the public are not mislead about what is and what isn’t a bone fide FIDIC contract document, FIDIC has launched its Golden Principles. The principles outline the essence of a FIDIC contract and articulate those essential characteristics of FIDIC’s general conditions that should not be amended if it is to be recognised as a FIDIC contract. More and more frequently, FIDIC has been experiencing applications of ‘FIDIC contracts’ where significant changes to the general conditions are made by means of replacing, changing or omitting parts of the wording through the particular conditions. The replacements and changes introduced have lately been found to be substantial and of such extent, that the final contract or agreement no longer represents the FIDIC principles, and thus are jeopardising the FIDIC brand and misleading tenderers and the public. The FIDIC contracts committee set up a special task group to identify which contractual principles of each form of contract FIDIC considers to be inviolable and sacrosanct. These principles

are referred to as the FIDIC Golden Principles. The FIDIC Golden Principles will be launched at the FIDIC Asia Pacific Contract Users’ Conference in Hong Kong from 25-27 June 2019. The 12-page guide, The FIDIC Golden Principles (First Edition 2019), outlines the five Golden Principles and explains in detail the reasoning behind them. Each of the five Golden Principles (GPs) are explained in the guide. In order to promote acceptance and understanding: • the GPs are formulated at a conceptual level to encapsulate the essence of a FIDIC contract; • each GP expresses a single, readily understood and generally accepted concept; • the GPs are limited to the minimum number necessary for completeness. The guide makes the point that minor additions or grammatical changes to the wording of a general conditions sub-clause that do not alter the intent are not a breach of the GPs. However, such cosmetic changes should only be made for good reasons, the guide advises.

The Golden Principles GP1: The duties, rights, obligations, roles and responsibilities of all the contract participants must be generally as implied in the General Conditions, and appropriate to the requirements of the project. GP2: The Particular Conditions must be drafted clearly and unambiguously. GP3: The Particular Conditions must not change the balance of risk/reward allocation provided for in the General Conditions.

GP4: All time periods specified in the contract for contract participants to perform their obligations must be of reasonable duration. GP5: All formal disputes must be referred to a Dispute Avoidance/Adjudication Board (or a Dispute Adjudication Board, if applicable) for a provisionally binding decision as a condition precedent to arbitration.

Copies of The FIDIC Golden Principles (First Edition 2019) are available from the FIDIC bookshop at http://fidic.org/bookshop


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New FIDIC Contract Awards launched A new awards programme for the users of FIDIC contracts is being launched to recognise excellence and to showcase best practice in project collaboration. Users of FIDIC contracts from around the world are set to have the opportunity to demonstrate excellence and showcase examples of good practice through collaboration, with the launch of The FIDIC Contract Awards. As well as recognising excellence in project delivery and good practice, the awards will provide a showcase for and raise the profile of the FIDIC contract user community. The first winners of The FIDIC Contract Awards will be presented at the London FIDIC Contract Users’ Conference in December, primarily for users in the European region, with the long-term vision being to replicate the awards for each of the regional FIDIC contract users’ conferences around the world.

The first winners of The FIDIC Contract Awards will be presented at the London FIDIC Contract Users’ Conference in December.

Before then, users will have the opportunity to enter the awards, which have eight categories as follows: Project of the Year For any project procured under a FIDIC contract. Entries should give a description of best practice achieved, with emphasis on the 1999 or 2017 editions of the FIDIC contract form. Client of the Year For any client or organisation. Entries should give a description of best practice achieved with their supply chain on project(s) with emphasis on the 1999 or 2017 editions of the FIDIC contract form. MDB Procurement of the Year An award to recognise the multilateral development

bank with the best procurement policy and proactive engagement with borrowers and stakeholders on capacity-building, institutional strengthening and training. Contractor of the Year For contracting organisations demonstrating best practice achieved on FIDIC project(s) with emphasis on the 1999 or 2017 editions of the FIDIC contract form. Legal Firm of the Year Given to reward best practice by a legal firm during the year based on outstanding contribution to the wider use of FIDIC contracts. Contract innovation through additional clauses This award recognises innovative additional clause drafting and the thinking

behind them which meets business needs whilst maintaining the critical aspects of the contract, including risk profile and mutual collaboration. Strategic Partners of the Year Award given to an organisation or group of organisations to recognise an outstanding contribution to the effective use of the FIDIC contract. Golden Principles Award This award is granted to any person, organisation or group of organisations for their strict compliance to the FIDIC golden principles on the execution of particular projects using any of the FIDIC contract suites. Commenting on the new awards, FIDIC chief executive Nelson Ogunshakin said: “The FIDIC contracts are widely used and accepted as the global procurement standard for contract forms. We wanted to acknowledge and showcase this important contract community and give them – and the contracts – the recognition that they deserve. “Winners of The FIDIC Contract Awards will demonstrate real achievement and the great work carried out by the individual, team, project or organisation. I look forward to the first awards in December and to the international roll out after that.”


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Inter-American Development Bank signs up for FIDIC standard contracts The Inter-American Development Bank is the latest major funding organisation to sign a long-term agreement to use FIDIC contracts. FIDIC has secured a major agreement with the Inter-American Development Bank (IDB) that will see the international funding organisation adopt the use of six FIDIC standard contracts for the next five years. Under the terms of the agreement, FIDIC has granted the IDB, the leading source for development financing in Latin America and the Caribbean, a non-exclusive licence to refer to the six major FIDIC contracts (see panel) for projects they finance and the documents will be used as part of the bank’s standard bidding documents. The contracts mainly include the latest 2017 Second edition FIDIC contracts, which cover a wide range of international construction and infrastructure work, and the IDB’s move represents another major endorsement for the contracts from a major international funding organisation, following a similar agreement signed with the World Bank back in February this year. FIDIC also expects to announce further agreements with other multilateral development banks soon. FIDIC chief executive Dr Nelson Ogunshakin said: “This is yet another significant development for FIDIC and we are absolutely delighted that the IDB has agreed to adopt our 2017 editions of the Rainbow suite of contracts and use them as a key part of their standard bidding documents. The move creates more certainty in the market as by adopting the FIDIC contacts on major projects the IDB is endorsing the fair and balanced approach that these documents offer to parties on major construction contracts. The contracts make it easier to get projects underway, as many of the typical commercial risks are clearly addressed in the terms and all parties understand their obligations and responsibilities.” The IDB’s endorsement should also provide further impetus to the financial, institutional and private equity investors operating in the

(Left to right) FIDIC chief executive, Nelson Ogunshakin, Maria Eugenia Roca, technical procurement advisor for the Inter-American Development Bank and William Howard, FIDIC president elect.

The six FIDIC contract documents covered by the FIDIC/World Bank agreement are as follows: llConditions of Contract for Construction for Building and Engineering Works Designed by the Employer (“Red book”), Second edition 2017; llConditions of Contract for Plant & DesignBuild for Electrical & Mechanical Plant & for Building & Engineering Works Designed by the Contractor (“Yellow book”), Second edition 2017; llConditions of Contract for EPC Turnkey Projects (“Silver book”), Second Edition, 2017); llClient/Consultant Model Services Agreement (“White book”), Fifth Edition 2017; llConditions of Contract for Design, Build and Operate Projects (“Gold book”) First Edition 2008; and llThe Short Form of Contract (“Green book”), First Edition 1999.

global market to adopt the use of FIDIC standard procurement contracts as an effective tool to mitigate the risks associated with investable infrastructure asset class. Commenting on the signing of the agreement, Maria Eugenia Roca, technical procurement advisor for the IDB, said: “We are delighted to continue our collaboration with FIDIC adopting the standard conditions of contracts in the 2017 suite for use in the IDB financed projects. The 2017 FIDIC standard conditions complemented by IDB Particular Conditions will ensure that large infrastructure contracts continue to be based on an internationally recognised standards and reflects the key aspect of IDB policies as well as the environmental and integrity requirements.” FIDIC president Alain Bentéjac said: “The IDB’s move represents further major international market buy-in for our FIDIC 2017 Second Edition contracts and one that we hope will also influence the supply chain to adopt FIDIC contracts thereby creating even more certainty in the planning and delivery of major international construction and infrastructure projects. We look forward to continuing our strong partnership with the IDB, the World Bank and the other multilateral development banks (MDBs) over the coming years.”


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Essential training for FIDIC contra  FIDIC offers a wide range of high-quality contract training courses conducted by international experts with thorough knowledge of FIDIC contracts and business practices. SILVIA FOSSATI, FIDIC’s training manager, offers an update. FIDIC training in the contracts arena is very highly regarded and covers a wide range of topics and issues relating to FIDIC conditions of contract and their use. Training is delivered via stand-alone events or programmes and can be online or classroom-based. We organise around 90 training events a year plus 20 in-house courses for private clients, who may be private companies or

international organisations. Our classroom-based courses attract an average of 20-40 participants and our online contract courses are growing in popularity and typically attract 40-50 participants per course. The course on the practical use of FIDIC contracts is especially popular, as is our course on claims and dispute resolution. On these courses, delegates go through all the main clauses in FIDIC’s contracts and learn how to practically apply these to a project. Our trainers are experts in contract management and business practice, so delegates can be confident that they are receiving the highest quality advice and information. The online courses, whose sessions take place every two weeks, include homework and interactive elements and give delegates an excellent grounding in FIDIC contracts

– and all without leaving their desk! FIDIC’s online courses are administered by FIDIC staff and all delegates on classroom and online courses receive a certificate so they have recognition of the training they have received. We are starting to organise courses on the 2017 Edition FIDIC contracts and we expect these to be very popular, especially given the increasing number of organisations that are endorsing these contracts. We expect that recent endorsements of FIDIC contracts by the World Bank, other funding organisations and also national governments will lead to more bookings on our courses, so we are anticipating a busy time ahead. All our courses are listed on the FIDIC website and booking is easy and straightforward. We are also happy to answer questions

from contract users about the best training for them and our top ten contract training questions on the following two pages should answer most queries. If not, just email us at fidic@fidic.org and we are sure to have an answer to your question! Training on contracts is extremely important to FIDIC because it widens the knowledge of FIDIC and what we do and also builds a worldwide network which is beneficial to our member associations. Our courses also raise the profile of our member associations in their respective countries. FIDIC training supports and promotes global best practice and we are very pleased to see that people attend our courses from all over the world – a testament to the coverage of our contracts in the global marketplace. We have a lot of requests from Africa for training, which is great to see, but we need more FIDIC trainers in that part of the world to service that increasing need. We are always looking to increase the number of FIDIC trainers and that need will become greater as our contracts are used more widely. Asia is also a growing area for FIDIC contracts and a number of our member associations in Vietnam, Thailand and the Philippines

For full details of courses visit fid


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 ct users are organising training. In Philippines the government decided recently to recommend FIDIC contracts for its projects, so we expect interest for our training to grow there too. In addition to our contracts training, we also provide business practice training which is important for FIDIC’s efforts to support and encourage global best practice. Interest in all our courses – contracts and business practice – is on the increase and we believe this shows how FIDIC standard forms of contract are increasing in popularity globally. Our contracts create more certainty in the market as they offer a fair and balanced approach to parties on major construction contracts. The more people we can train to have a greater understanding of how best to use the contracts, the better it is for the users themselves, for clients and the wider international construction industry. FIDIC is also in the process of creating and developing a training programme covering the 2017 Contracts Edition. We are also looking to establish a credentialing scheme, which will bring more value and rigour to the assessment and accreditation of the future adjudicators and trainers. We’ll keep you informed of these

all FIDIC training dic.org/events

developments over the coming months. Finally, we welcome any feedback about our training and what we can do to further improve it. Please feel free to write to me directly at sfossati@fidic.org and let me know what you would like to see more of.

Silvia Fossati, FIDIC’s training manager.


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Top ten Q&As on FIDIC training FIDIC’s training team deals with a wide range of bookings and queries about FIDIC contract courses. Here’s a quick overview of the ten most popular questions we get – along with the answers!

1. Where can I find the full list of currently scheduled FIDIC courses? FIDIC organises many courses all over the world. The main language of the courses is English, but we have some courses in French, Spanish, Arabic and German. An updated course list is on the FIDIC website at fidic.org/ events.

2. What is the difference between contracts modules and business modules? Two-day contracts courses offer a complete up-to-date review of the understanding and use of current FIDIC contracts. Business practice modules address business topics such as risk management, integrity management and sustainable project management.

3. I’m new to FIDIC contracts. Which course would be the most beneficial for me? We would recommend the FIDIC Module 1 course. It presents the main contracts clauses (Red, Yellow and Silver books) with a very practical approach, completed by case studies and group work.

4. Your website divides FIDIC modules from 1 to 4. Is it mandatory to attend these modules in order or can you attend only the module you are interested in? Module 0 focuses on the White Book only, Module 1 (Practical Use of FIDIC Contracts), 2 (Claims and Disputes Resolutions) and 3 (Understanding DABs) should be followed in that order. Module 4 (FIDIC

Contracts Management and Administration) should be followed after completion of Module 1.

5. How do I register on a FIDIC course? You can register online and an online registration option is available on the event page of the FIDIC website. Your registration will be added to your account. If you have no account yet, the system will require you to “Create a new account”.

6. Do I get a certificate at course completion? All official FIDIC courses provide a FIDIC attendance certificate. Online courses require specific criteria to be met to obtain a certificate of successful completion or a certificate of participation.

7. Which online courses does FIDIC run? FIDIC online courses cover the following modules: zz Module 1: FIDIC Conditions of Contract for Construction (Red Book) and Conditions of Contract for Plant and Design Build (Yellow Book). zz Advanced Module 1: Advanced course in applying FIDIC Conditions of Contract for Construction (Red Book) and Conditions of Contract for Plant and Design Build (Yellow Book). zz Module 2: Claims and Dispute Resolution under FIDIC. zz Module 3: Understanding DABs. zz Module 4: Management & Administration of FIDIC Contracts zz Young Professionals Management Training Programme: the FIDIC management training programme for young

professionals and future potential managers.

8. Is the content of the online courses the same as face-to-face courses? Yes, the content of the online course is the same as the face-to-face content courses, but issues are covered in more detail, using practical case studies and developing interactive work among participants.

9. What is the advantage of attending an online course compared to the usual face-to-face courses? Online courses comprise eight to nine sessions of two hours each. They are very much interactive, offering the opportunity to exchange with the other participants different experiences and different points of view.

10. How do I go about arranging an in-house course? FIDIC organises courses specially tailored for companies and international organisations’ staff. The client defines the content of the course needed, the time period, number of participants, indicating their prior knowledge of FIDIC. FIDIC will contact a FIDIC accredited trainer and provide a proposal. The client then discusses course details with the trainer.


Book now at fidic2019.org


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Legal experts say 2017 editions are “clear step forward” Leading construction lawyers from PINSENT MASONS say that FIDIC’s 2017 edition contracts should lead to improved contract management with any claims being resolved efficiently and with fewer disputes.

The New FIDIC Suite of Contracts, officially launched in December 2017, have been received with great interest by the global construction industry and they are generating high levels of engagement and debate amongst users and advisers alike. Now, in a clear vote of confidence in the new contracts, four leading construction lawyers have praised FIDIC for producing more balanced contracts which will be of benefits to clients, consultants and contractors when working on international construction contracts. An article published in the International Construction Law Review offers a comprehensive review of the FIDIC Red, Yellow and Silver Books, Second Edition 2017, focussing on three important aspects - risk allocation, contract management, and new claims and disputes procedures. The New FIDIC Suite 2017: significant developments and key changes by Pinsent Masons lawyers Frederic Gillion, (Paris partner), Rob Morson (Johannesburg partner),

Sarah Jackson (senior associate, London) and Chloe De Jager (associate, Johannesburg) is essential reading for anyone who uses these FIDIC contracts. Noting that risk allocation is commercially at the heart of any contract, the authors observe that it remains largely unaltered in the FIDIC second editions. Outlining the changes to the contract management processes and the claims and dispute processes, the authors believe these developments will result in more balanced and transparent contracts. Proper use of the 2017 editions should lead to “improved contract management with more claims being resolved timeously and efficiently, and with consequently fewer disputes,” the authors say. The authors conclude that publication of the 2017 editions of the FIDIC Red, Yellow and Silver contracts marks a clear step forward for FIDIC, providing more even-handed and balanced

contracts with a greater emphasis on reciprocity between the parties, which should be a welcome change for employers, contractors and consultants. A conference session on Tuesday 25 June at the FIDIC Asia Pacific Contract Users’ Conference in Hong Kong will see a panel of FIDIC experts and contracts committee members highlight the main changes introduced in the second editions and explain the thinking behind them. The session will set the scene for further morning sessions at the conference addressing the way in which the new suite of contracts has been received by the global industry.

The article was originally published in the International Construction Law Review Part 4 October 2018 [2018] ICLR 384 © Informa UK Ltd 2018. It is reproduced on FIDIC’s website, to be accessible by all FIDIC contract users, with the kind permission of the authors and of Informa UK Limited, for which permission FIDIC is very grateful.


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FIDIC signs a contract training first with top European university FIDIC has signed a memorandum of understanding with King’s College London to deliver a summer school on FIDIC contracts and how to use them.

FIDIC has signed its first ever contract training collaboration with a European university after it agreed a memorandum of understanding to coorganise a summer school on the FIDIC contracts and their practical use. The agreement to organise the contracts summer school was signed on 23 May 2019 and the project being undertaken by the King’s College London Centre of Construction Law and FIDIC is expected to lead to the establishment of an internationally recognised executive educational training programme, leading to a certificate of attendance based on the use of the FIDIC form of contract in practice. The course will be run by leading practitioners and focuses on the common and civil law legal frameworks within which the contracts are used. This intensive course will build on common law and civil principles and will examine how the FIDIC standard form processes operate in various legal systems. The first summer school will be run during Summer 2020, as a one-week intensive course. Through structured, academic training, the programme will be aimed at practitioners, demonstrating a minimum of two years of work experience, including engineers, lawyers and other construction professionals that have an interest in the use of FIDIC in practice.

The programme will not merely provide attendees with an overview of the FIDIC form of contract but will provide an in-depth analysis of the FIDIC contracts from the outset including a review of procurement systems and the legal systems within which these contracts are interpreted. The foundation of the programme will be on the analysis of contracts in a civil law and common law environment, including issues relating to contract formation, extensions of time, breach, payment, termination as well as dispute resolution. Once these have been understood, the programme will review the FIDIC contract forms to consider, discuss and review how to deal with the issues in a practical environment and within the context of a legal system. In order to add value to the programme, such a review would not be limited to a legal analysis but would consider what actually happens on projects in real life. Commenting on the signing of the memorandum of understanding, FIDIC chief executive Nelson Ogunshakin said: “We are very pleased to secure this partnership with King’s College London, a prestigious academic institution which is ranked in the top 25 universities worldwide. “We anticipate that the internationally recognised educational training programme we hope to create will enhance the global FIDIC body of knowledge and thereby help the development of professionals in the industry. The agreement we have signed with the King’s College London Centre of Construction Law is the first of its kind for FIDIC and we are excited by the prospect of a mutually beneficial collaboration.”

For course details please contact Olivia Nicolaou at the King’s College London Centre of Construction Law at olivia.nicolaou@kcl.ac.uk


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Send us your views and sign up Our first FIDIC Contract Users Newsletter was extremely well received following its launch in Dubai in February. We want to make future issues even more interesting, informative and widely read and to do that we need your help.

Some of the world’s most high-profile infrastructure projects use FIDIC’s popular suite of construction contracts. Highly regarded and much used across the globe, many international funding agencies and large private and public sector clients see the contracts as a ‘gold standard’ when engaging construction professionals on major projects. FIDIC contract users – clients, contractors and consultants – are a very important group of stakeholders that FIDIC wants to keep in touch with, by updating and engaging them on the latest developments in the FIDIC contracts area. That is the main purpose of this newsletter and why it is important that our contract users not only subscribe to the newsletter, but also contribute their news and views to it. While the newsletter will

keep readers informed about FIDIC’s news regarding the latest contract developments, we also want to see the experience of our contract user community reflected in the pages of the publication. To that end, we are very keen to hear from clients, contractors, consultants and legal professionals with their views of working with FIDIC contracts and why they chose them. We also welcome contributions from FIDIC member associations and the FIDIC volunteer community who work so hard to develop and promote the contracts. Their experiences also need to be shared in the newsletter so that others can learn from them. All our readers are invited to submit a short story, article or announcement for the newsletter. For news items and announcements, we require short, topical, news-oriented

pieces of around 300-350 words. Major articles can be in-depth discussions of topics of interest or project reports and these should be 500-1,000 words long. We particularly want to hear from contract users with their views on using FIDIC contracts, the benefits they bring and the challenges encountered, so that our contract community can share best practice and learn lessons. We also want to use the newsletter to build the FIDIC contract community more widely and that means increasing the numbers of those who receive it. The more people reading the newsletter,

the better we can reflect the experience of users and you can help by circulating the link below to all those in your organisation with an interest in FIDIC contracts. Finally, don’t forget to send us your feedback on this current issue – this helps us to improve the newsletter and make it event more relevant to readers.

How to get involved Please send your news, views and articles on FIDIC contracts to the newsletter editor, Andy Walker, at awalker@fidic.org Subscribe to the newsletter at http://fidic.org/user/register


15 FIDIC Contract Users’ Newsletter

Ukrainian translation of FIDIC Contracts Guide The FIDIC Contracts Guide to 1999 editions (2000), FIDIC Procurement Procedures Guide 1st Ed (2011), Construction Contract 1st ed (1999 Red book) and the Dredgers Contract 2nd Ed (2016) have been translated into Ukrainian for sale. The translations have been undertaken by the Ukrainian consultancy organisations, the ICEG and

AECU. The translations will help to familiarise Ukrainian experts with typical FIDIC contract forms. The publications contains useful material for studying the peculiarities of procurement but is not intended to set out a complete training course on the preparation of tender documentation. The comments in the guide are aimed at readers who already

Important corrections to FIDIC 2017 contracts

A number of important corrections have been made to the FIDIC Red Book Second Edition 2017, Yellow Book Second Edition 2017 and Silver Book Second Edition 2017. FIDIC draws all contract users’ attention to important corrections to Sub-Clauses 15.2, 16.1 and 16.2 of the contracts. While no correction of the wording of these sub-clauses is necessary, the graphical layout of certain text requires correction in order to accurately reflect FIDIC’s intention as regards the relevant provisions and their correct interpretation. Specifically, it is necessary to correct the horizontal indentation of the sentences listed below.

zz “and such failure constitutes a material breach of the Contractor’s obligations under the Contract” under Sub-Clause 15.2 [Termination for Contractor’s Default] in Red Book 2017 and Silver Book 2017; zz “and such failure constitutes a material breach of the Employer’s obligations under the Contract” under Sub-Clause 16.1 [Suspension by Contractor] in Red Book 2017, Yellow Book 2017 and Silver Book 2017; and zz “and such failure constitutes a material breach of the Employer’s obligations under the Contract” under Sub-Clause 16.2 [Termination by Contractor] in Red Book 2017.

For full details of the necessary correction, FIDIC strongly recommends that all contract users refer to FIDIC’s memorandum available for download (at no charge) from the FIDIC bookshop http://fidic.org/bookshop The memorandum will, in future, also be included in all electronic copies of the FIDIC 2017 contracts. By Siobhan Fahey, FIDIC contracts committee member, Ireland.

have such expertise, namely, those who construct and/or engineer contracts, or control their execution. Other translations into Ukrainian are anticipated in the near future. FIDIC is grateful to the ICEG and AECU for their work in translating these documents. The translated printed documents are available directly from ICEG and AECU websites and electronic copies can be obtained from FIDIC bookshop at http://fidic.org/bookshop

FIDIC contract users’ survey Users of FIDIC contracts and agreements worldwide are being asked to take part in an important survey to help make FIDIC’s best-selling documents more user friendly and easier to use. FIDIC wants to understand better how the FIDIC forms of contract and agreements are being used internationally to improve the services provided to the global construction sector. Ieva Liaugaude, FIDIC’s international client manager, said: “We really value feedback from contract users and we hope that the data collected from this important survey will help FIDIC to provide the market with an even better product.” Visit https://www. surveymonkey.com/r/TG16_P to complete the survey. The deadline for completion is Sunday 30 June 2019.


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Contract Users’ Newsletter

CONTACT US l Send news, views and articles on FIDIC contracts to the newsletter editor Andy Walker at awalker@fidic.org

l For contract order queries email FIDIC at fidic.pub@fidic.org

Save the dates! 3rd FIDIC Latin America Contract Users’ Conference, October 2019

5th FIDIC Africa Contract Users’ Conference, 28-31 October 2019

Main Conference: October 2019 TBC Workshops: October 2019 TBC Location: Hotel TBC, Mexico City, Mexico

Main Conference: Tuesday 29 and Wednesday 30 October 2019 Workshops: Monday 28 and Thursday 31 October 2019 Location: Avani Resort, Livingstone, Zambia

All dates/locations may be subject to change.

l Send general FIDIC enquiries to fidic@fidic.org

Future FIDIC Contract Users’ Conferences are taking place in Mexico City, Livingstone and London so make sure you save the dates today.

32nd FIDIC International Contract Users’ Conference, 2-5 December 2019

The first winners of The FIDIC Contract Awards will be presented at the Lond on FIDIC Main Conference: Contract Users’ Tuesday 3 and Wednesday 4 December Conference in 2019 December. Workshops: Monday 2 and Thursday 5 December 2019 Location: Hotel TBC, London, UK

Save the date!

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Contract Users' Newsletter Issue Number 2  

Contract Users' Newsletter Issue Number 2  

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