The second day of FIDIC’s International Contract Users’ Conference in London on 29 November 2023 began with a third ‘opening’ of the FIDIC Contracts Toolbox, where delegates learned about how these contracts are taking account of the pace of industry change and business challenges.
A knowledgeable group of expert panellists for the session included moderator Adriana Spassova, partner at EQE Control OOD, Andrea Chao, partner at Bird & Bird, Julie Farmer, consultant at the World Bank, Hugo Fonseca, head of claims, dispute avoidance and resolution at ADEPT, Rob Morson, partner at Pinsent Masons and Nicholas Rigby, CEO of NRG Management Consultancy.
Some of the key areas discussed in the session included the ongoing development of FIDIC contract net zero clauses and the current work to develop FIDIC contracts for offshore windfarms, an area which was described by Pinsent Masons’ Rob Morson as one of the most potentially contentious in the industry today. Panellists also discussed the need for a collaborative contracting contract, the challenges of dealing with brownfield infrastructure and public private partnerships.
Dispute avoidance
Following this first session, the conference turned to the topical issue of disputes to launch the new FIDIC Practice Note on Dispute Avoidance. The new practice note highlights awareness of the dispute avoidance function of dispute boards for FIDIC contract users and adjudicators and ensures that best practice is adopted. Panellists in this session, who gave a comprehensive introduction to the new guidance, included FIDIC general counsel Daduna Kokhreidze, Yann Schneller, partner at Cartier Meyniel Schneller, Taner Dedezade, barrister and partner at Howard Kennedy LLP and Vincent Leloup, chair of the FIDIC contracts committee.
Mega-projects in the spotlight
Delegates then discussed the always-popular issue of contracting and delivering mega-projects, through the experiences of those who have worked on them, either as project participants or professional advisers. Speakers in this session, which was chaired by FIDIC CEO Dr Nelson Ogunshakin, included Roberta Downey, head of construction at Vinson and Elkins, Mathias Fabich, general manager at PORR Group, Rene Santos, contracts manager at Manila Water and Steve Ovenden, head of legal at EDF Energy.
Mathias Fabich of PORR Group highlighted the crucial importance of selection the right project partner and that included clients as well. “Sometimes you have to say no,” he said. Fabich said that he particularly welcomed the World Bank’s use of ‘Rated Criteria’ for its procurement as this would lead to better selection of partners. He also complimented FIDIC contracts for their encouragement of good communications between the parties, as this was crucial in the smooth running of projects.
Roberta Downey, head of construction at Vinson and Elkins (above), said that she was “the person that you don’t want to see, apart from at conferences like this one” as she deals with contentious issues when the contract has run into legal difficulties. Describing mega-projects as being like “marriages of convenience”, especially in the area of joint ventures, Downey said that this inevitably led to more time having to be spent sorting out issues and getting up to speed with partners’ methods of working. “The challenges posed by these issues cannot be underestimated when working on a very large project,” she said.
EDF’s Steve Ovenden said that FIDIC represented “a hugely important part of our contracts toolbox” on the Hinkley Point C project in the UK. “We love using FIDIC contracts as they help with a quick turnaround in dealing with international partners and they also help to clarify issues around risk,” said Ovenden. FIDIC contracts also helps to deliver more continuity and consistency on Hinkley contracts he said.
Prevention better than cure
An afternoon session, entitled Prevention is better than cure, looked at the FIDIC dispute avoidance features of FIDIC forms with the expert assistance of Vincent Leloup, chair of the FIDIC contracts committee, Mariam Gotsiridze, principal research fellow at Singapore International Dispute Resolution Academy (SIDRA), David Robertson, partner at White & Case, Chris Corr, director of Built Intelligence and Charles Blamire-Brown, partner at Pinsent Masons.
SIDRA’s Mariam Gotsiridze highlighted some of the results of SIDRA’s recent annual surveys on dispute resolution and avoidance. This year, SIDRA is launching the third edition of its International Dispute Resolution Survey which aims to learn more about how and why businesses and lawyers make decisions about resolving cross-border disputes. The survey is focused on user experiences with arbitration, litigation, mediation, hybrid dispute resolution mechanisms and investor-state dispute settlement and this year SIDRA is also launching two new sections on intellectual property and technology disputes.
Charles Blamire-Brown of Pinsent Masons said that dispute avoidance needed to play a much more prominent role on projects if they are to succeed in the future. Much more work was needed in this area and FIDIC should be taking the lead on this, he said. Blamire-Brown made the point that the process of dispute avoidance could only work effectively if both parties to a dispute had total trust and faith in the third party mediating the dispute. Chris Corr of Built Intelligence said that, even on a human level, people were keen to avoid disputes and this needed to be considered by all parties on a project. So, more face-to-face meetings, more non-contractual communication and problem-solving activity can add a lot of value and save money, he said.
White & Case partner David Robertson spoke about the role of the engineer under the FIDIC 2017 conditions of contract, which he said removed a point of grievance with contractors. However, he also considered the extent to which engineer’s discretion to disapply time bars on the one hand has the potential to avoid disputes, whilst on the other potentially provides grounds for future challenges.
The conference was rounded off with a session on Construction Arbitration and Case Law where the key aspects of FIDIC contracts for arbitrators were discussed. Panellists in this final session, which was moderated in his inimitable fashion by FIDIC contracts committee member Husni Madi, included CMS partner Adrian Bell, Chris Seppala, partner of counsel at White & Case and Fatima Balfaqeeh, managing partner at Balfaqeeh Advocates.
Chris Seppala highlighted the five paths to arbitration in the 2017 FIDIC Rainbow Suite. These were where the DAAB decides or fails to decide a dispute, failure to comply with an agreement of the parties, failure to comply with a final and binding determination of the engineer, failure to comply with a decision of the DAAB whether binding or final and binding and where there is no DAAB in place or being constituted. Seppala’s expertise on these issues was clear to see and he held the interest of attendees throughout his contribution.
Summing up the conference, FIDIC president Catherine Karakatsanis (above) said that she had been impressed by the enthusiasm, interest and engagement of FIDIC contract users over the two days of the conference. “We are building a powerful community of users and events like this one will help our work in the legal and contractual arena no end,” she said. “FIDIC contracts are helping users run better and more equitable projects and giving users the flexibility to address key challenges like economic and political uncertainty and the rising inflationary pressures that threaten to make construction projects more difficult to scope and indeed price going forward,” said Karakatsanis.
Referring to the discussions around mega-projects during the conference, Karakatsanis said: “These are projects that are instrumental in making a difference to people’s lives and to improving economies. However, they cannot happen unless they are properly procured and delivered and that, as we know, where FIDIC contracts come in.”
FIDIC is grateful for the support of its 2023 International Contract Users Conference sponsors - strategic partner Fenwick Elliott, platinum sponsors CMS and White & Case and gold sponsors Pinsent Masons and Built Intelligence.
