Crucial role of collaboration highlighted at Americas FIDIC contracts conference

17 May 2022

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Day two of the Official FIDIC Contract Users’ Conference (Americas time zone event) on 17 May 2022 took a deeper dive into the use of FIDIC contracts across the region and how they were encouraging greater collaboration and better communication between on projects, writes FIDIC communications advisor Andy Walker.

The event, sponsored by international law firm CMS, targeted the Americas contract users’ community and offered a key opportunity for attendees to share progress on the application and use of FIDIC contracts internationally and across the region.

The second day of the conference was introduced by Charles Kim, legal counsel at the American Council of Engineering Companies (ACEC). Kim said he was looking forward to hearing from leading experts on the use of the FIDIC Suite of Contracts 1999 and 2017 editions and how they are being applied on various projects across the world, including on projects funded by the international financial institutions. The event also heard from legal and contractual experts who considered the contractual aspects and implications of working with FIDIC contracts in the Americas region, with a particular focus on projects in the Caribbean and elsewhere.

The chair for the first session of day two was Siobhan Fahey, a chartered engineer and chartered arbitrator and a member of the FIDIC Contracts Committee. Fahey, a lawyer specialising in construction law, is also an experienced arbitrator, dispute board member, adjudicator, conciliator and mediator of construction disputes and as also the FIDIC Contracts Committee’s principal drafter of the FIDIC 2017 contracts.

Introducing a session on the use of the FIDIC works contracts, Fahey gave a comprehensive overview of the important differences between the FIDIC contracts 1999 and 2017 editions, highlighting some of the new provisions that had been introduced to the 2017 editions to promote better collaboration between the contract parties.

First speaker in the session was Júlio César Bueno, a partner of Pinheiro Neto Advogados in Brazil. Bueno, the president of the Brazilian Society of Construction Law and president elect of the Dispute Resolution Board Foundation, is an expert in the practice of construction law and engineering contracts, project finance and public procurement. He highlighted the use of FIDIC contracts in the region and said that their adoption had been boosted by the number of multilateral development banks that had signed up to use FIDIC contracts as part of their standard bidding documents. “The adoption of best international practice is being driven by the adoption of FIDIC contracts,” he said. “We are now in the time of better governance and FIDIC contracts will have a key role to play going forward,” he said.

Second speaker, international construction lawyer at 3PB and member of the FIDIC Contracts Committee Peter Collie, spoke about the use of dispute boards and the mechanism contained in the provisions of FIDIC contracts. He highlighted the differences between the way that FIDIC stipulated the use of dispute boards, where decisions were enforced, versus the USA experience where dispute board decisions are only recommendations to the parties. Highlighting the crucial need for collaboration and better communication between contract parties, Collie said: “The more that parties can talk about the issues before they get out of hand then the better for everyone in my view.”

The second session of the conference, chaired by Karen Gough, barrister, attorney at law and chartered arbitrator at 39 Essex Chambers, looked at regional experiences of using FIDIC forms, with a particular focus on projects in the Caribbean and elsewhere.

Opening the session, Derrick McKoy, the attorney general of the Government of Jamaica, spoke about the use of FIDIC contracts on public procurement projects in Jamaica. “Having a contract that you are familiar with is not necessarily a bad thing,” he said, outlining that local contract forms were being used alongside FIDIC forms. He also said that he had a sense that public procurement in Jamaica over the past 20 years or so had been moving towards different ways of contracting and that this was likely to continue.

Next, Donna-Mae Cedeno, managing director at Quantum Cost Management Limited, offered some insights on how FIDIC contracts had performed in the region during the Covid pandemic and reflected on the lessons learned from the pandemic for the industry. During Covid, she said that on the whole employers bore the burden of delays and costs, while contractors expected to be fully compensated. “More equitable management of risk is required in contracts of the future,” she said.

Cedeno said that the size of contracting organisations impacted their ability to ride out the ‘storm’, resume and complete contracts with larger contractors more successful in surviving the lockdown, as they were able to provide the necessary records and data and adapt to the changed work conditions. A key lesson learned was the importance of keeping adequate contemporary records, which highlighted once more the need for collaboration – a recurring theme of the conference. To illustrate this, Cedeno mentioned that a FIDIC engineer on one project had instituted a shared system to monitor the contractor’s record-keeping as the effects of the pandemic wore on.

Karen Gough, barrister at 39 Essex Chambers, then spoke about contract administration and the role of the engineer. She highlighted the key duties of the engineer, including their crucial role in dealing with claims. Gough also offered a very helpful list of Dos and don’ts to make the best use of the engineer on a FIDIC contract. These are listed below.

  1. Don’t compromise on qualifications and independence of the appointed engineer.
  2. Don’t make/avoid ‘in-house’ engineer appointments.
  3. Do promptly fill any vacancy, follow COC process.
  4. Do make good use of the engineer’s powers of assessment and determination of issues, avoid escalations and disputes.
  5. Do ensure parties’ personnel are trained in claims management, especially notice requirements; record keeping and content of detailed claims.
  6. Do invest in dispute avoidance powers of the engineer to resolve issues in real time and head off potential disputes.

The final speaker in the session was Christopher Malcolm, secretary general of the Jamaica International Arbitration Centre, who highlighted some of the “adulterations” that had been made to FIDIC contracts and the difficulties and challenges they cause. “We must stick to contract forms that we know are tried and tested and which work for all the parties,” he said. The cost implications of using such adulterated contracts were invariably huge and needed to be avoided, said Malcolm. He also touched on the role of dispute boards and how they functioned in the Caribbean.

Summing up the conference, FIDIC general counsel Daduna Kokhreidze, thanked the sponsors CMS and all the speakers for their contributions over the past two days. “The Official FIDIC Contract Users’ Conference series are vitally important events for us here at FIDIC as they offer a unique opportunity to share progress on the application and use of FIDIC contracts internationally and across different regions,” she said. We are also grateful to have had participation from MDBs, private sector organisations and clients, government, engineers, contractors, investors, consultants and other stakeholders who have an interest in FIDIC contracts,” said Kokhreidze.

The next Official FIDIC Contract Users’ Conference in the regional series is the Asia Pacific time zone event which takes place on 19-20 May 2022 starting at 7am CEST.

Click here for details of the conference, including registration information

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