Review and Overview of FIDIC Contracts

FIDIC Training Workshop
Introduction to FIDIC Contracts

Justice Academy
Review and Overview
of FIDIC Conditions of Contracts
30th June 2020
Author-presenter: Tahseen Saleh

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Tahseen Saleh
FIDIC – INTERNATIONAL FEDERATION OF CONSULTING ENGINEERS – WWW.FIDIC.ORG – FIDIC@FIDIC.ORG – © Tahseen - 2019

Outline
1. Introduction
2. Background
3. Major Groups of Contemporary Legal Systems
4. FIDIC Forms of Conditions of Contracts
5. Overview of the FIDIC 1999 Contract
6. Interpretation
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1. Introduction
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Introduction
• FIDIC is the abbreviation of the “Fédération

Internationale Des Ingénieurs-Conseils ‘FIDIC’”, which
stands for :(The International Federation of Consulting
Engineers)
• The FIDIC was established in 1913
• Promotes and implements the consulting engineering
industry’s strategic goals
• Members endorse FIDIC’s statutes and policy statements
and comply with FIDIC’s Code of Ethics.
• Develops and promotes business practice: Business
Integrity management; Project Sustainability
management;Quality management; Risk Management
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Introduction
• The FIDIC Organizes:

– Extensive programs of seminars and conferences
– International Training Programs (courses & workshops)
– Capacity Development programs (accredited trainers,
training suppliers, programs and events)
• The FIDIC Publishes:

– Business practice guides
– Professional services agreements and guides
– Works Contracts and Guides
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Introduction
• Groups of Member Associations

– GAMA: FIDIC Group of African Member
Associations
– ASPEC: FIDIC Asia-Pacific Member

Associations
– EFCA: European Federation of

Engineering Consultancy Associations
– FEPAC: Panamerican Federation of

Consultants / Fedaración Panamericana
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Introduction
• General Assembly
– 2-6 delegates per Member Association
• Executive Committee
– 9 elected members including President, Vice President, Treasures
– President: Alain Bentejac (France)
– Moncif Ziani (Morocco) Member (finished last September)
– Aisha Nadar (initially Egyptian
• Secretariat
– 6 staff including managing Director & General Manager
• Committees
– Assessment Panel For Adjudicators (APA)
– Business Practice Committee (BPC)
– Capacity Building Committee (CBC)
– Contracts Committee (CC)
– Integrity Management Committee (IMC)
– Membership Committee (MemC)
– Risk and Quality Committee (RC)
7 – Sustainable Development Committee (SDC)
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Introduction
• Standard Contracts and Agreements:

– Construction (Red)
– Plant and Design – Build (Yellow)
– EPC / turnkey Projects (Silver)
– Short Form of Contract (Green)
– Design, Build and Operate Projects (Gold
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Introduction
FIDIC Releases 2017

• New FIDIC Releases
• Compared with 1999 releases
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Introduction
FIDIC Releases 2017
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Introduction
FIDIC Releases 2017
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Introduction
The Latest Releases
• The Emerald Book - Conditions of Contract for

Underground Works
– This Book was released in April 2019
• Conditions of Subcontract for Plant and Design
(yellow book 1999) 1st Edition Dec. 2019
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Tahseen Saleh
FIDIC – INTERNATIONAL FEDERATION OF CONSULTING ENGINEERS – WWW.FIDIC.ORG – FIDIC@FIDIC.ORG – COPYRIGHT 2019

Introduction
• Standard Forms of Contracts

• Advantages:
– The standard form of contracts define the contractual
relationship between the Parties, set out
responsibilities and allocate the risks.
– They offer:
• Saving in time and cost on repetitive transactions.
• Common understanding with less disputes is gained upon
frequent use.
• Fair to all parties which gives tenderers better confidence
and lower risk contingencies and better offers to clients.
• Facilitates training
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Introduction

• Advantages (Cont’d):
• Parties should not be distracted by the need to interpret
contract conditions
• Drafted with care
• Uncertainties of meanings removed (reduced), either by
decisions of court or by revisions so predictable.
• Good practice principles can only be implemented widely if
standard forms are widely used.
• When disputes arise about some clauses in a recommended
contract there shall be no need to work out where such
clause has come from or how it should be interpreted.
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Introduction

• Disadvantages:
• Tenderers may think they can dispense with legal
systems.
• Use of some standard forms is widespread and
common that it is as a form of private legislation.
• The only way to have a coherent view of a contract is to
read the contract cover-to-cover, so General Conditions
with Separate Particular Conditions should not be used.
• Etc.
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Introduction

• Precautions:
– Amendments made to standard forms:
• General conditions of standard forms are copyrighted intellectual
property and cannot be modified by retyping.
• Whatever the reason for the amendments, the resulting
documents can be disastrous, and can often have unintended
results.
• Preparing and constructing the contract is very difficult (many
inconsistencies and varying interpretations).
– Contract Documents
• Parts of the contract are often prepared by different firms or by
different professionals and contradictions will creep in.
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2. Background
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Background
• Background of FIDIC Contracts

• The Institute of Civil Engineers (UK) and the Federation of the
Civil Engineering Contractors (UK) combined various forms
which were used by different employers prior to the Second
World War into an agreed standard document which was
published in 1945. “The ICE Form”.
• The Form was first revised in January 1950;
• Other revisions were made:
– March 1951 (Third edition);
– January 1955 (Fourth Edition), amended in 1969;
– 1973 (Fifth Edition);
– 1991 (Sixth Edition)
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© Bunni 3rd Edition
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Background

• The ACE Form
– The ICE Form was drawn for the domestic scene (use in
projects) in the UK.
– The Association of Consulting Engineers (ACE) in the UK, jointly
with the Export Group of Construction Industries in the (UK)
with the approval of the ICE prepared a document for use in
other parts of the world in August 1956.
– This was known as the Overseas (Civil) Conditions of Contract
(the ACE Form).
– The text and format differed slightly from the ICE Form.
– The ACE Form was published in blue cover to distinguish it from
the ICE Form.
– The first standard form of International conditions of contract.
– The ACE Form was used for a short period of time.
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Background

• The FIDIC Form of Contract
– The Conditions of Contract (International) for Works of
Civil Engineering Construction was published in August
1957. (Long title!). “
– This was based on the ACE Form
– This was prepared by the “Fédération Internationale Des
Ingénieurs-Conseils ‘FIDIC’ ” (The International Federation
of Consulting Engineers) and the (Fédération
internationale Bu Bâtiment et Des Travaux Publics)
(FIBTP),The International Federation of Building and Public
Works, now known as the International European
Construction federation.
– This was popularly known as the “Red Book”
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Background

• The FIDIC Form of Contract 2nd Edition
– The Second Edition was published in July 1969 after
the document was approved and ratified by the
International Federation of Asian and Western Pacific
Contractors’ Associations.
– A supplementary section containing Conditions of
Particular Application to Dredging Works was added
as Part III.
– A re-print of the Second Edition in 1973 added the
approval and ratification by the Associated General
Contractors of America and the Inter-American
Federation of Construction Industry.
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Background

• The FIDIC Form of Contract 3rd Edition
– The publication of the ICE Fifth Edition in June 1973
which was controversial (arguable) provided an
impetus or momentum for a further revision of the
Red Book.
– The Third Edition of the Red Book was published in
March 1977 which incorporated some significant
changes. But these changes did not follow in respects
the changes made in the ICE Fifth Edition.
– The Third Edition considered and avoided all the
22 principal difficulties in the ICE Fifth Edition
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Background

• The FIDIC Form of Contract 4th Edition
– The Fourth Edition was published in September 1987 with major
revisions made to the Third Edition.
– The Changes included the Title where the word “International”
was deleted, inviting parties from all over the world to use the
Red Book not only for International contracts but also in
domestic contracts.
– Part II of the Red Book which is referred to as the ‘Conditions of
Particular Application’ was expanded and produced in a
separate booklet. It is linked to Part I by the corresponding
numbering of the clauses.
– In 1988, the Fourth Edition of the Red Book was reprinted with a
number of editorial amendments which were identified at the
end of the document. These amendments were very minor.
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Background

• The FIDIC Form of Contract 4th Edition (Cont’d)
– In 1992, further amendments to the Fourth Edition of
the Red Book were introduced in the reprint of the
document.
– Some of the amendments were directed towards a
more uniform style of drafting.
– Other amendments were of significant nature, either
in adding to or changing the meaning of the relevant
clauses of the Form.
– In November 1996, the FIDIC published a document
24 entitled ‘Supplement to Fourth Edition 1987.
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Background

• The 1996 Supplement to the FIDIC 4th Edition
– It is intended to provide the use with alternative
arrangements in three controversial areas of the Red
Book, thus giving him a choice in the method to be
used. These areas are: Settlement of Disputes,
Payment and Preventing Delay in Certification for the
Purpose of payments.
– The Sections of the Supplement are entitled as follow;
• Section A ‘Dispute Adjudication Board’
• Section B ‘Payment on Lump Sum Basis’
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• Section C ‘Late Certification’
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Background

– In 1995, the Orange book was published for Design-Build
and TURNKEY projects.
– The 1995 Orange book reflected a move away from the
FIDIC forms which had adopted the traditional role of the
Engineer. Also, submission to the Engineer for his
“Decision” prior to pursuing a dispute was eliminated and
the DAB was introduced.
– In 1994 FIDIC established a task group to update the 1992
Red Book and 1987 Yellow book.
– The FIDIC 1999 suite was published in 1999 which
constitutes of the Short Form (Green), Construction (Red),
Plant and Design-Build (Yellow) and EPC/Turnkey (Silver).
– FIDIC Conditions of Contract for Design, Build and Operate
26 Projects (Gold) was published in 2008.
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3. Major Groups of Contemporary Legal Systems
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Major Groups of Contemporary Legal Systems
• Major Groups of Contemporary Legal Systems

– There are four major groups of legal systems which apply
where the international construction is concerned.
• 1) The Romano- Germanic group;
• 2) The common law group
• 3) The Islamic law group, including those with origins
from the first two groups
• 4) The socialist laws group.
– Taking these groups individually and analyzing their
principal concepts should lead to some understanding of
the variations under which one would have to operate in
28 international construction.
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• The Romano – Germanic group
– This group owes its origin to the times of Julius Caesar, the
Emperor Augustus and the Emperor Justinian.
– Between the thirteenth and nineteenth centuries,
different universities in Latin and Germanic countries in
Europe developed this group of legal systems.
– The term ‘Civil law’ is often used in the English speaking
world to denote this group.
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• The Common Law group
– This group was originated as the law common to all
England after the Norman conquest in 1066.
– It developed from a body of law which is almost entirely
the product of judicial decisions by courts which applied
custom and reason to everyday disputes, aided by only a
few formal enactments of law.
– The common law continued to be developed in England by
judges, rather than by legislators, through the
accumulation of tradition expressed by upholding certain
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principles.
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• The Islamic Law group
– This group is based on four sources of legislations:
• 1- The Holy Qur’an;
• 2- The Sunna, which is the traditional and model
behavior of the Prophet Mohammad (S);
• 3- The Ijma’ or consensus of scholars of the Islamic
communities;
• 4- the Qiyas which is the juristic interpretation by the
process of reasoning.
– Collectively they are called the Shari’ah which is literally
translated as ‘the way to follow’.
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• The Socialist laws group
– This group is a development from the base line of a
Romano Germanic concept.
– It originated in the former Union of Soviet Socialist
Republics where the law was treated as strictly
subordinate to the task of creating new economic
structure.
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4. FIDIC Forms of Conditions of Contracts
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FIDIC Forms of Conditions of Contracts
• Conditions of Contracts
– They are terms and conditions that set the rights and
obligations of the contracting parties, when a contract is
awarded or entered into. These include 'general
conditions' which are common to the specific types of
contracts, as well as 'special conditions' which are peculiar
to a specific contract (such as, contract change conditions,
payment conditions, price variation clauses, penalties).
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– Terms and Conditions
• A group of clauses
• In an agreed language
• Controlled by a specific law
• To control the relationship between parties
• For carrying out certain scope of works
• In a defined location
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– Which set the rights and obligations of the
contracting parties
• What each party shall provide
– The contractor will provide the works
– The Employer pays the money
• In what time frame(s)
• In accordance with which standards
• Using what products
• And so on
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– They range from a very simple contract
• Building an attachment to a villa
– To sophisticated form of contract such as
• FIDIC 1999 Forms of contract
• FIDIC 1987 Forms of Contract
• The NEC3 Forms of Contract
• UNDP Forms of contract
• And many others
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• FIDIC Forms of Conditions of Contracts

• The General Conditions:
– Used General Conditions should not be changed.
– The Particular Conditions are prepared to include any changes
or additional Clauses to suit the local and project requirements
or conditions.
– Particular Conditions include the Appendix to Tender (Contract
Data in the DBO) giving essential Project information.
– The information in the Appendix to Tender is completed
partially by the Employer and the other part by the Contractor.
– Payments are made against the works executed by the
Contractor and the expenditures he makes therein.
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– The Employer must pay the Contractor’s dues.
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• Categories of the Clauses in the 1999 suite General Conditions
 a) Clause 1 • General Provisions

 b) Clauses 2 to 4 • Rights, duties and obligations of the
Employer, Engineer and Contractor.
 c) Clauses 5 to 7 • Resources (Nominated subcontractors,
staff and labor, Plant, material and
workmanship)
 d) Clauses 8 to 10 • Time aspects (Commencement, delays
and suspension; Tests on completion
and Employer’s taking over)
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 e) Clause 11 • Defects Liability
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• Categories of the Clauses in the 1999 suite General Conditions

(Cont’d)
• f) Clauses 12 to 14 • Monetary terms (measurement and
evaluation, variations and adjustments,
contract price and payments)
• g) Clauses 15 to 16 • Terminations (By the Employer and by
the Contractor)
• h) Clauses 17 to 19
• Risks, responsibilities, insurances and
force majeure
• i) Clauses 20 (& 21
in the 2017 ed.) • Claims, disputes and their settlement
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• The FIDIC 1999 Red Book Clauses
• Clause 1 General provisions
• Clause 2 The Employer
• Clause 3 The Engineer
• Clause 4 The Contractor
• Clause 5 Nominated Subcontractors
• Clause 6 Staff and Labor
• Clause 7 Plant, Material and Workmanship
• Clause 8 Commencement, Delays and Suspension
• Clause 9 Tests on Completion
•41 Clause 10 Employer’s taking Over
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• The FIDIC 1999 Red Book Clauses (Cont’d)
• Clause 11 Defects liability
• Clause 12 Measurement and Evaluation
• Clause 13 Variations and Adjustments
• Clause 14 Contract price and Payment
• Clause 15 Termination by Employer
• Clause 16 Suspension and termination by Contractor
• Clause 17 Risk and Responsibility
• Clause 18 Insurance
• Clause 19 Force Majeure
•42 Clause 20 Claims, Disputes and Arbitration
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• Differences between the Red, yellow and Silver Books in the

1999 suite General Conditions
• Red Book 1999 1st Edition • Yellow Book 1999 1st • Silver Book 1999 1st
Clause: Edition Clause: Edition Clause:
• Clause 3: The Engineer • Clause 3: The Engineer • Clause 3: The Employer’s

Administration
• Clause 5: Nominated • Clause 5: Design • Clause 5: Design
Subcontractors
• Clause 12: Measurement and • Clause 12:Tests after • Clause 12: Tests after
Evaluation Completion Completion
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– Similar wording was used wherever applicable.
– Differences between the contracts are inevitable, arising as
they do from the different allocations of risk and
responsibility.
– Defined Terms are in CAPITALS in the General Conditions.
– When Preparing the Specifications, Bills of Quantities,
Particular Conditions and Employer’s Requirements use
the defined terms (capitalized).
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FIDIC Short Form

• The Green Book
• Short Form of Contract
• 1st Edition 1999
• Short sentences; simple straight forward
language.
• 15 Clauses in 10 pages
• The complexities of other forms is not present
• Suitable when work is not complicated.
• For building or engineering Works of relative
small capital value and/or short construction
period. (Projects up to US $ 500,000 and
duration not more than 6 months)
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FIDIC Construction Contract

The Red Book
• Conditions of Contract for Construction for
Building and Engineering Works Designed by the
Employer.
• 1st Edition 1999
• For building or engineering works of larger and
more complex than minor projects.
• The design is made by the Employer (in house if
he has the capabilities and authorized to do so)
or on behalf of the Employer by design
consulting engineer.
• Often includes some elements of Contractor-
designed civil, mechanical, electrical and/or
construction works.
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FIDIC Plant and Design Build

The Yellow Book
• Conditions of Contract for Plant and Design Build
for electrical and mechanical plant and for
building works, designed by the Contractor.
• 1st Edition in 1999
• For projects of larger and more complex than
minor works projects.
• The Contractor designs and provides in
accordance with the Employer’s Requirements,
plant and or other works; which may include any
combination of civil, mechanical, electrical and
or construction works.
• The Employer may carry out some designs.
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FIDIC EPC/Turnkey Projects

The Silver Book
• Conditions of Contract for EPC/Turnkey
Projects.
• 1st Edition in 1999.
• For different sizes and complexity of
projects.
• The Contractor fully designs and provides
in accordance with the Employer’s
Requirements for the required works.
• The Employer is not interfering with the
designs.
• .
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FIDIC Design, Build and Operate Projects

The Gold Book
• Conditions of Contract for Design, Build and

Operate Projects.
• 1st Edition in 2008.
• For different sizes and complexity of projects.
• The project is long-term and it combines the
operation and maintenance into one contract
with the design and building of the facility.
• The Contractor designs and provides in
accordance with the Employer’s
Requirements, plant and or other works.
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FIDIC Construction (Pink)

The Pink Book
• Conditions of Contract for Construction MDB

Harmonized edition, for Building and
Engineering Works Designed by the Employer.
• 1st Edition 2005 and was amended in 2006

and 2010.
• This is a variant of the 1999 Red Book for use
on projects that are funded by certain
Multilateral Development Banks (MDBs).
•
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FIDIC Conditions of Sub-Contract Construction
• Unlike other forms of FIDIC Contract, no

color is given to this form.
• 1st Edition 2009.
• It is a derivative of the 1999 Red Book.
• Normally used in conjunction with the Red
Book and the Pink Book and can be used
with other Books if the requirements are
satisfied.
• .
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FIDIC Client/Consultant Model Service

Agreement
• 4th Edition 2006.

• Represents the basic form of Contract of
appointment between a Client and a consultant.
• Suitable for the provision of services to the
Employer such as pre-investment and feasibility
studies, design, value engineering,
administration and supervision of construction
and Project management.
• (New Pre-release edition in Sept. 2016)
• New 5th edition was released in Feb. (April) 2017.
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Which Form to Use

Check List
When selecting the form of contract to be applied, the following
checklist to be used:
• Type of the project to be procured.
• Type of design and whether or not it has an exclusive nature.
• How and when payment is made.
• Certainty of final cost of the project
• Method of tendering
• Control during construction
• Possibility or probability of having variations or changes in the
works after entering into the Contract.
• If the Contractor required to operate the facilities after the
completion of the project.
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Which Form to Use

• .
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5. Overview of the FIDIC 1999 Contracts
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Overview of the FIDIC 1999 Contracts
• Clause 1 General Provisions

– This Clause is composed of 14 Sub-Clauses;
– The First Sub-Clause (1.1) is the Definitions which is
further subdivided into six sub-categories;
• The Contract
• Parties and Persons
• Dates, Tests, Periods and completion
• Money and Payments
• Works and Goods
• Other definitions
– The other 13 Sub-Clauses include: 1.3 Communications,1.4 Law and
Language, 1.5 priority of Contract Documents, 1.9 Delayed
Drawings or Instructions (RED), Errors in Employer’s Requirements
(YELLOW) or Confidentiality (SILVER), 1.13 Compliance with
Statutes, Regulations and Laws and 1.14 Joint and Several Liability.
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Summary of the Clauses.

• Clause 2 The Employer
– 2.1 Right of Access to the Site
– 2.2 Permits, Licenses and Approvals
– 2.3 Employer’s Personnel
– 2.4 Employer’s Financial Arrangements
– 2.5Employer’s Claims
• This Clause covers the role of the Employer during
the overall project duration.
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• Clause 2 The Employer (Cont’d)
• The Employer is required to submit within 28 days of
receiving the Contractor’s request, reasonable evidence
that financial arrangements have been made and are
being maintained.
• In case of Employer’s Claims, the Employer is required to
give notice and particulars to the Contractor if the
Employer considers himself entitled for payment.
– What is the time bar for the Employer to give his notice?
– Is the entitlement for payment the only thing the Employer can
claim for?
– Statutes, Regulations and Laws and 1.14 Joint and Several
58 Liability.
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Parties to the Contract
CM Employer DAB
59 Engineer Contractor
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Contract Agreement
Employer Contractor
Employer’s DAB
Representative
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• Clause 3 The Engineer (The Employer’s Administration in the
Silver Book)
– 3.1 Engineer’s Duties and Authority
– 3.2 Delegation by the Engineer
– 3.3 Instructions of the Engineer
– 3.4 Replacement of the Engineer
– 3.5 Determinations.
• This Clause covers the role of the Engineer.
• The rights and obligations of the Parties do not depend on the
opinion of the Engineer.
• The Engineer may delegate authority, although there is no defined
Engineer’s Representative”.
• The Contractor may object to a proposed replacement of Engineer
within 42 days after being given notice by the Employer, with
61 supporting particulars.
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• Clause 4 The Contractor
• This Clause covers the Contractor’s general obligations with
the requirement that in respect of Contractor-designed
Works, the Works, when completed shall fit for purpose.
• Sub-Clause 4.5 [Assignment of Benefit of Subcontract] in the
Red Book becomes [Nominated subcontractors] in the Yellow
& Silver Books.
• Sub-Clause 4.10 [Site Data] requires the Employer to have
made available to the Contractor for his information prior to
the date of submission of the tender “all relevant data in the
Employer’s possession on …” together with an obligation to
make available all such data comes into the Employer’s
possession subsequently. The Contractor is “responsible for
interpreting such data.
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• Clause 4 The Contractor (Cont’d)
• This Clause covers also the Unforeseeable Physical Conditions
(4.12) and requires the Engineer agree or determine whether
and (if so) to what extent these physical conditions were
unforeseeable, and the extension of time and cost
compensation to the Contractor as a result of encountering
such conditions.
• The Unforeseeable Physical Conditions shall be adverse to be
claimed by the Contractor and evaluated by the Engineer.
• The Clause covers the services provided by the Employer such
as Electricity, Water and Gas and Employer’s Equipment if
there is a provision for them in the Appendix.
• The Progress Reports are covered under Sub-Clause 4.21 and
interim payments cannot be processed without them (14.6).
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• Clause 5 Nominated Sub-Contractor (RB) &
Design in (YB & SB)
• This Clause covers the of appointment of Nominated
Sub-Contractors and the grounds upon which the
Contractor may raise reasonable objections. (4 Sub-
Clauses in the RB).
– 5.1 Definition of “nominated Subcontractor”
– 5.2 Objection to Nomination
– 5.3 Payments to nominated Subcontractor
– 5.4 Evidence of Payments
.
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• Clause 5 Nominated Sub-Contractor (RB) &
Design in (YB & SB)
• This Clause covers the Design in the YB & SB:
– 5.1 General Design Obligations
– 5.2 Contractor’s Documents
– 5.3 Contractor’s Undertaking
– 5.4 Technical Standards and Regulations
– 5.5 Training
– 5.6 As-Built Documents
– 5.7 Operation and Maintenance Manuals
– 5.8 Design Error.
.
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• Clause 6 Staff and Labour
• This Clause addresses the:
– 6.1 Engagement of Staff and Labour
– 6.2 Rates and Wages and Conditions of Labour
– 6.3 Persons in the Service of the Employer
– 6.4 Labour Laws
– 6.5 Working Hours
– 6.6 Facilities for Staff and Labour
– 6.7 Health and Safety
– 6.8 Contractor’s Superintendence
– 6.9 and Contractor’s Personnel
– 6.10 Records of Contractor’s Personnel and Equipment
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– 6.11 Disorderly Conduct.
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• Clause 7 Plant, Material and Workmanship
• This Clause addresses the manner of execution,
sampling, inspection, testing, rejection, remedial works,
ownership of plant and materials and royalties.
• This Clause is important and is related to other Clauses,
particularly, Clauses 9, 10, 11, 12, 13, 14, 17, 18, 19, 20
and 3.
.
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• Clause 8 Commencement, Delays and Suspensions
• This Clause covers time related aspects and is one of the mostly used
Clauses.
• It is composed of 12 Sub-Clauses;
– 8.1 Commencement of Work
– 8.2 Time for Completion
– 8.3 Programme
– 8.4 Extension of Time for Completion
– 8.5 Delay Caused by Authorities
– 8.6 Rate of Progress
– 8.7 Delay damages
– 8.8 Suspension of Work
– 8.9 Consequences of Suspension
– 8.10 Payment for Plant and Material in Event of Suspension
– 8.11 Prolonged Suspension
– 8.12 Resumption of Works.
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• Clause 9 Tests On Completion
– It is composed of 4 Sub-Clauses;
• 9.1 Contractor’s Obligations
• 9.2 Delayed tests
• 9.3 Retesting
• 9.4 Failure to Pass Tests on Completion
.
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• Clause 10 Employer’s Taking Over
• 10.1 Taking over of the Works and Sections
• 10.2 Taking Over of Parts of the Works
• 10.3 Interference with Tests on Completion
• 10.4 Surfaces Requiring Reinstatement
– Clause 10 specifies the conventional procedures for
certification of completion and of for Employer’s
Taking Over.
.
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• Clause 11 Defects Liability
– It Specifies Defects Liability Obligations. The Employer can
claim an extension to the Defects Notification Period.
• 11.1 Completion of Outstanding Work and Remedying Defects
• 11.2 Costs of remedying Defects
• 11.3 Extension of Defects Notification Period
• 11.4 Failure to Remedy Defects
• 11.5 Removal of Defective Works
• 11.6 Further Tests
• 11.7 Right of Access
• 11.8 Contractor to Search
• 11.9 Performance Certificate
• 11.10 Unfulfilled Obligations
• 11.11 Clearance of Site
71
Tahseen Saleh


• Clause 12 Measurement and Evaluation (RB)
• 12.1 Works to be measured
• 12.2 method of Measurement
• 12.3 Evaluation
• 12.4 Omissions
.
72
Tahseen Saleh


• Clause 12 Tests After completion (YB & SB)
• 12.1 Procedures for Tests after Completion
• 12.2 Delayed Tests
• 12.3 Retesting
• 12.4 Failure to Pass Tests After Completion
.
73
Tahseen Saleh


• Clause 13 Variations and Adjustments
– 13.1 right to Vary
– 13.2 Value Engineering
– 13.3 variation Procedure
– 13.4 payment in Applicable Currencies
– 13.5 Provisional Sums
– 13.6 Daywork
– 13.7 Adjustment for Change in Legislation
– 13.8 Adjustment for Changes in Cost
• The right to vary and value engineering Sub-Clause are more elaborated
in the RB compared with the YB & SB.
• Although a provision for adjustment is made in case change in
legislation in the SB, the adjustment for change in cost according to the
SB is left to be calculated in accordance with the provisions in the
74 Particular Conditions.
Tahseen Saleh


• Clause 14 Contract Price and Payment
• This Clause covers Payments (money) related aspects and is one of the mostly used
Clauses.
– 14.1 The Contract Price
– 14.2 Advance Payment
– 14.3 Application for Interim Payment
– 14.4 Schedule of Payments
– 14.5 Plant and Material Intended for the Works
– 14.6 Issue of Interim Payment Certificate
– 14.7 Payment
– 14.8 Delayed Payment
– 14.9 Payment of Retention Money
– 14.10 Statement at Completion
– 14.11 Application for Final Payment Certificate
– 14.12 Discharge
– 14.13 Issue of final Payment Certificate
– 14.14 Cessation of Employer’s Liability
75 – 14.15 Currencies of Payment
Tahseen Saleh


• Clause 14 Contract Price and Payment
• This Clause sets out the financial principles of the Contract
whether re-measurement or lump sum.
• Payment procedures commence with the Contractor’s
submission of a (monthly or other) Statement, with supporting
documents which are to include the progress report (4.21)
• It provides for Advance Payment, Schedule of Payments,
payment for Plant and Material which have been shipped and /
or have arrived at Site.
• It addresses the entitlement to financing charges based on when
the Engineer received the Statement, Progress Reports and
other supporting documents.
76
Tahseen Saleh


• Clauses 15 Termination by Employer
– This Clause provides for termination by the Employer.
• 15.1 Notice to Correct
• 15.2 Termination by the Employer
• 15.3 Valuation at Date of Termination
• 15.4 Payment after Termination
• 15.5Employer’s Entitlement to Terminate
77
Tahseen Saleh


• Clauses 16 Suspension and Termination by
Contractor
– This Clause provides for suspension and termination
by the Contractor.
• 16.1 Contractor’s Entitlement to Suspend Work
• 16.2 Termination by Contractor
• 16.3 Cessation of Work and Removal of
Contractor’s Equipment
• 16.4 Payment on Termination.
78
Tahseen Saleh


• Clauses 17 Risk and Responsibility
– This Clause covers risk and responsibility of each
Party .
• 17.1 Indemnities
• 17.2 contractor’s Care of the Works
• 17.3 Employer’s Risks
• 17.4 Consequences of Employer’s Risks
• 17.5 Intellectual and Industrial property Rights
• 17.6 Limitation of Liability
79
Tahseen Saleh


• Clauses 18 Insurance
– This Clause provides for the general requirements of
insurances in the project.
• 18.1 General Requirements for Insurances
• 18.2 Insurance For Works and Contractor’s
Equipment
• 18.3 Insurance against injury to Persons and
damage to property
• 18.4 Insurance for Contractor’s Personnel.
80
Tahseen Saleh


• Clauses 19 Force Majeure
• This Clause covers the definition, responsibility and consequences of
Force Majeure .
– 19.1 Definition of Force Majeure
– 19.2 Notice of Force Majeure
– 19.3 Duty to Minimize Delay
– 19.4 Consequences of Force Majeure
– 19.5 Force Majeure Affecting Subcontractors
– 19.6 Optional Termination, Payment and Release
– 19.7 Release from Performance under the Law
• This Clause includes protection to the Contractor in respect of legal or
physical impossibility
• Force Majeure must prevent a Party from performing any of its
obligations
•81 Notice is required following awareness of the event.
Tahseen Saleh


• Clauses 20 Claims, Disputes and Arbitration
• This Clause covers the submission of Contractor’s Claims, Settlement of
Disputes amicably, by the DAB or by Arbitration.
– 20.1 Contractor’s Claims
– 20.2 Appointment of the Dispute Adjudication Board
– 20.3 Failure to Agree Dispute Adjudication Board
– 20.4 Obtaining Dispute Adjudication Board’s Decision
– 20.5 Amicable Settlement
– 20.6 Arbitration
– 20.7 Failure to Comply with Dispute Adjudication Board Decision
– 20.8 Expiry of Dispute Adjudication Board’s Appointment
• Notice is required within 28 days after becoming aware or should have
become aware.
• Requirements to keep contemporary records
• Engineer or Employer must respond to the Contractor with “approval or
82 disapproval and request him to provide any supporting particulars.
Tahseen Saleh

Interpretation
Interpretation
Law of the contract provides:
- Gap filling provisions:
- Default rules
- References to good faith, usage and customs -
References to tribal and religious rules
- Implied terms: for a FIDIC contract in a civil code
jurisdiction, the type of obligations accepted by the
Parties as being implied depend on the nature of the
contract (in this case a construction contract). This is
not the case in a common law jurisdiction.
83
Tahseen Saleh

Interpretation
Interpretation (cont’d)
Construction rules:
- plain meaning of words;
- contra pro-ferentum rules so that ambiguous
terms will be construed against the Party that
imposed its inclusion in the Contract;
- extrinsic evidence rule for contract provisions
derived from external sources;
- merger rule where a pre-existing agreement
between the Parties is extinguished upon its
incorporation into a court order;
- ejusdam rules used to interpret loosely written
84 contract.
Tahseen Saleh

Changes to the FIDIC 1999 Suite of Contracts
• THANK YOU
• Tahseen Saleh
• tahseen@olamanagement.com
• +1(519)870 6630
• +962-79 911 0350
• +974 5522 6500
• +974 7726 5000
85
Tahseen Saleh

Review and Overview of FIDIC Contracts

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Review and Overview of FIDIC Contracts

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FIDIC Training Workshop

Introduction to FIDIC Contracts

30th June 2020

Author-presenter: Tahseen Saleh

FIDIC – INTERNATIONAL FEDERATION OF CONSULTING ENGINEERS – WWW.FIDIC.ORG – FIDIC@FIDIC.ORG – © Tahseen - 2019

FIDIC – INTERNATIONAL FEDERATION OF CONSULTING ENGINEERS – WWW.FIDIC.ORG – FIDIC@FIDIC.ORG – © Tahseen - 2019

FIDIC – INTERNATIONAL FEDERATION OF CONSULTING ENGINEERS – WWW.FIDIC.ORG – FIDIC@FIDIC.ORG – © Tahseen - 2019

• FIDIC is the abbreviation of the “Fédération

FIDIC – INTERNATIONAL FEDERATION OF CONSULTING ENGINEERS – WWW.FIDIC.ORG – FIDIC@FIDIC.ORG – © Tahseen - 2019

• The FIDIC Organizes:

• The FIDIC Publishes:

FIDIC – INTERNATIONAL FEDERATION OF CONSULTING ENGINEERS – WWW.FIDIC.ORG – FIDIC@FIDIC.ORG – © Tahseen - 2019

• Groups of Member Associations

– ASPEC: FIDIC Asia-Pacific Member

– EFCA: European Federation of

– FEPAC: Panamerican Federation of

FIDIC – INTERNATIONAL FEDERATION OF CONSULTING ENGINEERS – WWW.FIDIC.ORG – FIDIC@FIDIC.ORG – © Tahseen - 2019

FIDIC – INTERNATIONAL FEDERATION OF CONSULTING ENGINEERS – WWW.FIDIC.ORG – FIDIC@FIDIC.ORG – © Tahseen - 2019

• Standard Contracts and Agreements:

FIDIC – INTERNATIONAL FEDERATION OF CONSULTING ENGINEERS – WWW.FIDIC.ORG – FIDIC@FIDIC.ORG – © Tahseen - 2019

FIDIC Releases 2017

FIDIC – INTERNATIONAL FEDERATION OF CONSULTING ENGINEERS – WWW.FIDIC.ORG – FIDIC@FIDIC.ORG – © Tahseen - 2019

FIDIC Releases 2017

FIDIC – INTERNATIONAL FEDERATION OF CONSULTING ENGINEERS – WWW.FIDIC.ORG – FIDIC@FIDIC.ORG – © Tahseen - 2019

FIDIC Releases 2017

FIDIC – INTERNATIONAL FEDERATION OF CONSULTING ENGINEERS – WWW.FIDIC.ORG – FIDIC@FIDIC.ORG – © Tahseen - 2019

The Latest Releases

• The Emerald Book - Conditions of Contract for

FIDIC – INTERNATIONAL FEDERATION OF CONSULTING ENGINEERS – WWW.FIDIC.ORG – FIDIC@FIDIC.ORG – COPYRIGHT 2019

• Standard Forms of Contracts

FIDIC – INTERNATIONAL FEDERATION OF CONSULTING ENGINEERS – WWW.FIDIC.ORG – FIDIC@FIDIC.ORG – © Tahseen - 2019

• Standard Forms of Contracts

FIDIC – INTERNATIONAL FEDERATION OF CONSULTING ENGINEERS – WWW.FIDIC.ORG – FIDIC@FIDIC.ORG – © Tahseen - 2019

• Standard Forms of Contracts

FIDIC – INTERNATIONAL FEDERATION OF CONSULTING ENGINEERS – WWW.FIDIC.ORG – FIDIC@FIDIC.ORG – © Tahseen - 2019

• Standard Forms of Contracts

FIDIC – INTERNATIONAL FEDERATION OF CONSULTING ENGINEERS – WWW.FIDIC.ORG – FIDIC@FIDIC.ORG – © Tahseen - 2019

FIDIC – INTERNATIONAL FEDERATION OF CONSULTING ENGINEERS – WWW.FIDIC.ORG – FIDIC@FIDIC.ORG – © Tahseen - 2019

• Background of FIDIC Contracts

FIDIC – INTERNATIONAL FEDERATION OF CONSULTING ENGINEERS – WWW.FIDIC.ORG – FIDIC@FIDIC.ORG – © Tahseen - 2019

• Background of FIDIC Contracts

FIDIC – INTERNATIONAL FEDERATION OF CONSULTING ENGINEERS – WWW.FIDIC.ORG – FIDIC@FIDIC.ORG – © Tahseen - 2019

• Background of FIDIC Contracts

FIDIC – INTERNATIONAL FEDERATION OF CONSULTING ENGINEERS – WWW.FIDIC.ORG – FIDIC@FIDIC.ORG – © Tahseen - 2019

• Background of FIDIC Contracts

FIDIC – INTERNATIONAL FEDERATION OF CONSULTING ENGINEERS – WWW.FIDIC.ORG – FIDIC@FIDIC.ORG – © Tahseen - 2019

• Background of FIDIC Contracts

FIDIC – INTERNATIONAL FEDERATION OF CONSULTING ENGINEERS – WWW.FIDIC.ORG – FIDIC@FIDIC.ORG – © Tahseen - 2019

• Background of FIDIC Contracts

FIDIC – INTERNATIONAL FEDERATION OF CONSULTING ENGINEERS – WWW.FIDIC.ORG – FIDIC@FIDIC.ORG – © Tahseen - 2019

• Background of FIDIC Contracts

FIDIC – INTERNATIONAL FEDERATION OF CONSULTING ENGINEERS – WWW.FIDIC.ORG – FIDIC@FIDIC.ORG – © Tahseen - 2019

• Background of FIDIC Contracts

FIDIC – INTERNATIONAL FEDERATION OF CONSULTING ENGINEERS – WWW.FIDIC.ORG – FIDIC@FIDIC.ORG – © Tahseen - 2019

• Background of FIDIC Contracts

FIDIC – INTERNATIONAL FEDERATION OF CONSULTING ENGINEERS – WWW.FIDIC.ORG – FIDIC@FIDIC.ORG – © Tahseen - 2019

3. Major Groups of Contemporary Legal Systems

FIDIC – INTERNATIONAL FEDERATION OF CONSULTING ENGINEERS – WWW.FIDIC.ORG – FIDIC@FIDIC.ORG – © Tahseen - 2019

• Major Groups of Contemporary Legal Systems

FIDIC – INTERNATIONAL FEDERATION OF CONSULTING ENGINEERS – WWW.FIDIC.ORG – FIDIC@FIDIC.ORG – © Tahseen - 2019

• Major Groups of Contemporary Legal Systems

FIDIC – INTERNATIONAL FEDERATION OF CONSULTING ENGINEERS – WWW.FIDIC.ORG – FIDIC@FIDIC.ORG – © Tahseen - 2019

• Major Groups of Contemporary Legal Systems