September 27, 2018

Breakfast with Clyde: Focus on FIDIC on 5 July 2018

The FIDIC forms are one of the most used standard forms in the construction industry globally, especially where international stakeholders are participating in the project. Naturally, there is a lot of interest in the three updated FIDIC forms for the Red, Silver and Yellow books published only recently in December 2017. Besides being the talk of the town at the recent FIDIC Asia Pacific Users' Conference held in Singapore on 3 to 4 July 2018, it also found favour as the topic of choice for our inaugural Breakfast with Clyde session held at the Tower Club Singapore on 5 July 2017 – "Focus on FIDIC".

At the interactive round table session, participants heard from our senior construction partner based in Paris, David Brown, about the latest updates in the FIDIC forms, and also debated various issues and key concerns with David, Eugene Tan (Construction partner based in Singapore, and Senior Accredited Specialist in Building and Construction Law) and Yvonne Foo (Senior associate based in Singapore).

There was consensus that it was common to see contracts based on the FIDIC forms being used in the region, though these contracts are usually modified to suit the project and local market needs. For example, contracts will have to be amended to account for the mandatory or applicable local laws in the country that the projects are going to be executed. In a market outside one's home ground, it is comforting (and perhaps also convenient) to see a familiar form of contract in place. It is also usually easier for contract users who have previously navigated other contracts based on the same standard form to come to terms with the contractual framework and mechanisms such as that for payment, variations and delays. In doing so, administering the contract at hand (which is based on a standard form) is hopefully less daunting.

Some of the changes to the FIDIC forms which were discussed at the Breakfast include:

  • Increased contract administrative obligations on the Employer/ Engineer.
  • Introduction of requirements which apply equally to both contracting parties, such as the requirement for the Employer to issue notices in relation to its Claims within stipulated timeframes as well.
  • A more prescriptive contract. For example, the components of a "fully detailed Claim" are set out in the new Clause 20.2.4, and the use of deeming provisions.
  • Clauses which signify a push towards a more collaborative contractual relationship and dispute avoidance. For instance, there is emphasis on the distinction between "claims" and "disputes" and a re-labelling of the DAB, i.e. Dispute Adjudication Board, as the "DAAB", i.e. Dispute Avoidance/ Adjudication Board.

The jury is still out on how popular these new FIDIC forms will eventually be. So watch this space!