Victoria.tyson@corbett.co - CCC I Centre Of Excellence

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May 16th, 2019Prague, Czech Republicwww.3C-global.comVictoria Tysonvictoria.tyson@corbett.co.ukTrends in Standard Forms of Contracts:Introduction

May 16th, 2019Prague, Czech Republicwww.3C-global.com9:05Contracts andProject ManagementTrends in Standard Forms of ContractsPanel LeaderVictoria Tyson, UKVincent Leloup, FranceNew White Book FIDIC 2017 EditionZoltán Záhonyi, HungaryNew Red and Yellow Book 2017 EditionRob Horne, UKNew NEC4 / UK Standard Form10:00Further PanelistsChakravarthi Nandakumar, IndiaRobert Werth, Germany

May 16th, 2019Prague, Czech Republicwww.3C-global.comThank You for Your Attention!

May 16th, 2019Prague, Czech Republicwww.3C-global.comVincent LeloupFIDIC Contracts CommitteeVincent.Leloup@exequatur.proTrends in Standard Forms of Contracts:The new FIDIC White Book, 2017 Edition

FIDIC 2017 Suite of AgreementsClientMay 16th, 2019Prague, Czech Republicwww.3C-global.com

Main features and structure of the2017 White BookMay 16th, 2019Prague, Czech Republicwww.3C-global.comTypical use of the 2017White BookConsultant acting asEngineer under aWorks ContractConsultant actingas designer for alassistance, projectmanagement oradvisory servicesFIDIC 2017 White BookStructure

Time line under the White Book 2017May 16th, 2019Prague, Czech Republicwww.3C-global.comEffective Dateof theAgreementCl. 4.1 Date oflatest signatureSC 3.3.1Perform the Services withreasonable skill, care and diligenceCommencementDateof the ServicesCompletion ofthe whole ofthe ServicesTime for Completionof the ServicesSC 1.1.24Cl. 8.2Duration of liabilityAs set out under the PCCl. 4.5As per PC /Default: 14 dConsultant’s non-excusabledelays Client’s Notice foracceleration of rate of progressSC 1.1.5as may be amended forConsultant’s excusable delaysDelay damagesKD1Possible key datesKD2KD314 dProgrammeCl. 4.414 dSC 4.3.1SC 4.3.2Appendix 4Client’s objection resubmitNo objection proceedPayment as per Cl. 7.1 and Appendix 3 [Remuneration and Payment]But failure to meet the Time forCompletion is a breach of theAgreement Consultant liable forgeneral damages at lawPossible audit of Consultant’s recordsCl. 7.6

Clause 3.3 – Standard of careMay 16th, 2019Prague, Czech Republicwww.3C-global.comThe FIDIC White Book 2017 positionSC 3.3.1: Notwithstanding any term or condition to the contrary in the Agreement or any relateddocument or any legal requirement of the Country or any other relevant jurisdiction (including, for theavoidance of doubt, the jurisdiction of the place of establishment of the Consultant), in theperformance of the Services the Consultant shall have no other responsibility than to exercise thereasonable skill, care and diligence to be expected from a consultant experienced in the provision ofsuch services for projects of similar size, nature and complexitySC 3.3.2: To the extent achievable using the standard of care in Sub-Clause 3.3.1, and withoutextending the obligation of the Consultant beyond that required under Sub-Clause 3.3.1, theConsultant shall perform the Services with a view to satisfying any function and purpose that may bedescribed in Appendix 1 [Scope of Services]. but the Consultantdoes not give awarranty that theywill be metStandard of performanceis: reasonable skill, careand diligence not fitnessfor purposeFunction and purpose ofthe services required bythe Client are noted

Cl. 3.9 – Construction AdministrationMay 16th, 2019Prague, Czech Republicwww.3C-global.comConnections FIDIC White Book / FIDIC forms of Works ContractsFIDIC White Book, 2017 EditionSC 3.9.3When acting as the engineer, employer’srepresentative, project manager orsimilar, the Consultant shall have theauthority to act on behalf of the Clientto the extent provided in the WorksContract. If the authority of theConsultant under the Works Contract issubject to prior approval of the Client,then the Client warrants that suchrestriction on the authority of theConsultant shall be stated in the WorksContract or shall be made known inwriting to the contractor under the WorksContractFIDIC Pink Book, 2010 EditionSC 3.1 – Engineer’s Duties and AuthorityThe Engineer may exercise the authority attributable to theEngineer as specified in or necessarily to beimplied from the Contract whenever carrying out duties orexercising authority, specified in or implied by the Contract, theEngineer shall be deemed to act for the Employer.SC 3.1 – Engineer’s Duties and AuthorityIf the Engineer is required to obtain the approval of theEmployer before exercising a specified authority, therequirements shall be as stated in the Particular Conditions. TheEmployer shall promptly inform the Contractor of any change tothe authority attributed to the Engineer.

Liability for breach of AgreementMay 16th, 2019Prague, Czech Republicwww.3C-global.comThe FIDIC White Book 2017 positionSC 8.1.3If either Party is liable to the other, damages shall be payable only on the following terms:(a) such damages shall be limited to the amount of reasonably foreseeable loss anddamage suffered as a direct result of such breach;(b) in any event, the amount of such damages shall be limited to the amount stated in SubClause 8.3.1 [Limit of Liability]; and(c) if either Party is considered to be liable jointly with third parties to the other Party, theproportion of damages payable by that Party shall be limited to that proportion of liabilitywhich is attributable to its breach.Exclusion of liabilityLiability limited todirect losses which arereasonably foreseeable(at the time ofAgreement formation)SC 8.1.3SC 8.3.3Indirect, specialor consequentialloss or damageare excluded fromliabilityLimitation of liabilityLiability limited toa cap stated in PCSC 8.3.1 & 8.3.2.Liability limited intime as stated in PCSC 8.2SC 8.4.1Exclusion andlimitation do notapply in case ofdeliberate default,fraud, fraudulentmisrepresentation,reckless misconduct

May 16th, 2019Prague, Czech Republicwww.3C-global.comThank You for Your Attention!Vincent LeloupFIDIC Contracts CommitteeEUR ING, MSc Water Management, MSc AgronomyMSc Construction Law and Dispute ResolutionFCIArb, FDBF, FIDIC Accredited TrainerDirector of Studies of the PgD InternationalConstruction Contracts (I2C), Paris II PantheonAssas Universityvincent.leloup@exequatur.pro

Zoltán ZáhonyiChair, FIDIC Contracts Committeezoltan.zahonyi@zandpartners.comTrends in Standard Forms of Contracts:The New Red and Yellow Book FIDIC 2017 Edition

FIDIC 2017 Suite of ContractsThe ContextDAABEmployerContractorEngineer** No Engineer in the FIDICSilver Book !Settlement of disputes:Dispute Avoidance & AdjudicationBoard!No contractual relationshipbetween the Engineer &the Contractor!28

FIDIC 2017 Suite of ContractsApplicability, Scope, Types of Projects & ContentsEach Includes:Basically: No changeBalanced risk sharingContractor’s designMainly E&M Works or D&B projectsLarge-scale International projectsThe Engineer administers theproject/contract implementationDAABBalanced risk sharingEmployer’s designMainly Building and ConstructionLarge-scale International projectsThe Engineer administers theproject/contract implementationDAABMore Contractor’s risk (But:READ THE ‘NOTES’!)Contractor’s design ( engineer& procurement) facility to beprovided on turnkey basisLarge-scale International projectsNo EngineerDAAB GENERAL CONDITIONS APPENDIX: GENERAL CONDITIONSOF DISPUTE AVOIDANCE /ADJUDICATION AGREEMENT DAAB PROCEDURAL RULES GUIDANCE FOR THE PREPARATIONOF PARTICULAR CONDITIONS CONTRACT DATA AND ANNEXES:FORMS OF SECURITIES FORMS OF- LETTER OF TENDER,- LETTER OF ACCEPTANCE,- CONTRACT AGREEMENT and- DISPUTE ADJUDICATION/AVOIDANCE AGREEMENT38

FIDIC 2017 Red & Yellow BookWhat is NEW / Different? – More Clarity & CertaintyNew terms & expressions became defined (e.g. “Extension of Time”; “Key Personnel”; “Notice”; “NOD” etc.)Many contractual processes became more structured (–» 3 digit subdivision of Sub-Clauses)Some features, used to be implicit/implied in the 1999 Forms, many of these became now EXPLICIT.EXAMPLE:Sub-Clause 13.3.1 [Variation by Instruction] to apply under the following Sub-Clauses:1.9 – correction of errors in the Employer’s Requirements [YB only]4.7.3 – correction of errors in the items of reference [RB & YB only]4.12 – Unforeseeable physical condition (if instruction found to be a Variation) [RB & YB only]8.7 – revised methods for accelerating progress8.12 – prolonged suspension (if works are omitted)[All the 3 books]11.4 – Contractor’s failure to remedy (if works are omitted)17.2 – Contractor’s rectification of a damage48

FIDIC 2017 Red & Yellow BookWhat is NEW / Different?– Engineer’s Position StrengthenedBecame a centrally positioned, basicprocedural mechanism for the Engineer«–Clear steps & procedures increased (& flexible)time periods!Sub-Clause 3.7[Agreement or Determination]«–The Engineer to act “NEUTRALLY”!FURTHERMORE:The Engineer to follow these procedures toagree or determine any matter or Claim.There shall be no requirement for the Engineer to obtain the Employer’sconsent before the Engineer exercises his/her authority.Parties’ joint request for DAAB assistance may not be made during the periodthe Engineer is carrying out his/her duties under Sub-Clause 3.7 on the matterat issue or in disagreement (unless the Parties agree otherwise).!58

FIDIC 2017 Red & Yellow BookWhat is NEW / Different?– Improved Claims & Dispute Procedures» The terms “Claim” & “Dispute” became defined» The “Claim” and the “Dispute” procedures became separated (see Clause 20 and Clause 21)» The Employer’s Claims and Contractor’s Claims are treated equally (see: “Claiming Party”)» The Engineer has more active role (see: initial response functions under S-Cl 3.7)» No more “dead end streets” (see: deemed outcomes, if a stakeholder fails to act within time limit set)» DAAB in the 2017 Editions (new feature of ”avoidance” is added)» Clause 21 [Disputes and Arbitration] became more structured, hence, easier to follow68

FIDIC 2017 Red & Yellow BookWhat is NEW / Different?– More Procedures & Time LimitsEXAMPLE:CONCLUSIONS:Release of the FIDIC ConstructionContracts 2017 Updates isGOOD NEWS for practitioners preparing and managingconstruction contracts (at remote corners of the Worldpossessing less confidence / relevant experience)BAD NEWS for disputelawyers (maybe) 78

Thank You for Your Attention!Z & Partners Consulting EngineersWe Share Our Experience in Construction Contract Preparation & ManagementVisit us: www.zandpartners.com

May 16th, 2019Prague, Czech Republicwww.3C-global.comRob HorneRob.Horne@osborneclarke.comTrends in Standard Forms of Contracts:NEC4

NEC4 International UpstartMay 16th, 2019Prague, Czech Republicwww.3C-global.comWhat's in the box?ContractsGuidance Notes Engineering Construction Contract (ECC) Preparing an Alliance Contract Managing an Alliance Contract Engineering Construction Short Contract (ECSC) Preparing an Engineering andConstruction ContractManaging an Engineering andConstruction ContractEngineering Construction Sub-Contract (ECS) Engineering Construction Short Sub-Contract (ECSS)Preparing an Engineering andConstruction Short ContractManaging an Engineering andConstruction Short Contract Term Service Contract (TSC) Preparing a Professional ServiceContract Managing a Professional ServiceContract Term Service Sub-Contract (TSS) Term Service Short Contract (TSSC)Preparing a Professional Service Short Contract Professional Services Contract (PSC) Preparing a Term Service Contract Managing a Term Service Contract Professional Services Sub-Contract (PSS) Preparing a Term Service ShortContract Managing a Term Service ShortContract Professional Services Short Sub-Contract (PSSS) Design Build Operate Contract (DBO)Preparing a Design Build and OperateContractManaging a Design Build and OperateContract Preparing a Supply Contract Managing a Supply ContractAlliance Contract (Alliance) Preparing a Supply Short Contract Managing a Supply Short ContractSupply Contract (SC) Short Supply Contract (SSC)Preparing and Managing a DisputeResolution Service ContractEstablishing a Procurement andContract Strategy Framework Contract (FC) Preparing and Managing a Framework Contract Dispute Resolution ContractManaging a Professional Service ShortContractSelecting a Supplier

NEC4 International UpstartMay 16th, 2019Prague, Czech ject ManagerFM our supplierSub-subcontractorDesignerNEC ContractNEC approvalNon-NEC ContractMaterials supplierDesigner

NEC4 International UpstartMay 16th, 2019Prague, Czech Republicwww.3C-global.comFeatures and Structure of theSuite1.2.3.4.5.6.7.8.9.GeneralContractor ResponsibilitiesTimeQuality ManagementPaymentCompensation EventsTitleLiabilities & InsuranceTermination Main Options (A, B, C, D, E, F) Secondary Options (W, X, Y) Amendments (Z) Contract DataSchedule of Cost ComponentsScopeSite Information Guidance and Practice Notes

NEC4 International UpstartMay 16th, 2019Prague, Czech Republicwww.3C-global.comWhat sets it apart

NEC4 International UpstartMay 16th, 2019Prague, Czech Republicwww.3C-global.comPros and ConsFor NECAgainst NEC High cost to start and manageprocesses Processes are complex with feweasy fixes once of track Low profile internationally,questionable fundability Prone to significant and pooramendmentAvailability of management toolsSimple language, accessiblePromotes collaborationExtensive and successful UK trackrecord Adaptable and flexible for differentsituations Whole suite written together tointeract

May 16th, 2019Prague, Czech Republicwww.3C-global.comThank You for Your Attention!

Connections FIDIC White Book / FIDIC forms of Works Contracts FIDIC White Book, 2017 Edition FIDIC Pink Book, 2010 Edition SC 3.1 –Engineer’s Duties and Authority The Engineer may exercise the authority attributable to the Engineer as specified in or necessarily to be

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