03122020

EIC at FIDIC International Contract Users´ Conference 2020

Experts from the EIC Working Group Contract Conditions shared their knowledge and expertise during this year‘s FIDIC International Contract Users´ Conference taking place from 01-02 December 2020 online. The annual conference in combination with pre-conference workshops offered in-depth guidance for practitioners on selecting, using and managing FIDIC contracts and provided best practice advice on leading major projects and resolving disputes. EIC was invited to participate in the conference with four Members of its Working Group Contract Conditions, including its Chairman, Mathias Fabich.

KEY TOPICS

FIDIC GOLDEN PRINCIPLES

Mathias Fabich and Stefan Ciufu-Hayward joined forces in the session titled „FIDIC Golden Principles – Turning Aspiration into Reality“ with representatives from FIDIC, the EBRD and EIC’s associated member firm, Pinsent Masons, to analyse how the market has adopted the FIDIC Golden Principles and what stakeholders can do individually and/or collectively to promote publicity and applicability of these highly useful guidelines. During the panel discussion the following points were made:

Application of FIDIC Golden Principles in the Market

There is not yet enough awareness amongst clients and/or those who draft the contracts on their behalf and, given that the Golden Principles are not enforceable and FIDIC cannot police clients’ behaviour, the application of the Golden Principles is little to none in construction practice.

Benefits from applying the Golden Principles

Fair contract conditions promote competition and avoid the pitfalls of one-sided contracts, as described by the Japanese development financing agency, JICA .
Contrary, consequences of „bad contractual behaviour“ are paid by society.

How to promote the Golden Principles

Contractors should better explain the FIDIC Golden Principles to their clients, project-related or more general through their industry federations.
MDBs should include the FIDIC Golden Principles in their education / training to their borrowers.
FIDIC should reach out via its member associations to the local governments and public clients and properly promote its Golden Principles on the national level.

FIDIC CONTRACT ADMINISTRATION AND DISPUTE AVOIDANCE

François Doré participated in the session titled „Views and Experiences of Engineers on their FIDIC Contract Administration and Dispute Avoidance“, sharing first-hand insights and valuable information from the Engineer´s and the Contractor’s point of view in using FIDIC Contracts.

Conclusions

If operated properly, FIDIC Contracts in general provide a good tool to avoid the escalation of disputes given the many contract management and dispute settlement mechanisms, from early warning to arbitration.
Experience with the rather prescriptive contract management mechanism of the FIDIC 2017 suite is still limited.
In some world regions, a change in clients’ mindset is needed to refrain from maximum risk-shifting onto contractors.
More training on FIDIC Contract Management would be welcomed.

FIDIC CONTRACTS IN THE USE

Viliam Koprda shared in the session titled „International Case Studies - Review by FIDIC Users“ the EIC perspective on the practical relevance of the FIDIC Golden Principles. Experience based on Particular Conditions, prepared by public employers in selected Central Eastern European countries for the FIDIC 1999 “Red and Yellow Books”, showed that clients still were not sufficiently familiar with the FIDIC Golden Principles. EIC calls on all public financiers in the region, including the EU and the Multilateral Development Banks, to check whether the Particular Conditions are in compliance with the FIDIC Golden Principles.

Conclusions

Please find a short summery of the presentation below this article.

CONCLUSION

As usual, the FIDIC International Users’ Conference provided a dynamic platform for exchanging the latest news and experience in relation to the FIDIC standard forms of contract.