The opening day of the 2024 Official FIDIC International Contract Users’ Conference event in London on 3 December 2024 began with FIDIC president Catherine Karakatsanis reminding delegates that FIDIC’s contracts occupy an important and influential position in the global industry and are widely used on many major construction and infrastructure projects around the world.
“Many international multilateral development banks continue to use FIDIC contracts as an accepted form of contract for use with their standard bidding documents and this is something of which we are very proud,” she said. “The past 12 months has seen further progress in the uptake of the use of FIDIC contracts and only recently, we have signed new and expanded agreements with the Asian Infrastructure Investment Bank and the African Development Bank to use FIDIC standard contracts for a further five years. As a result, the profile of the contracts continues to grow,” Karakatsanis said.
“The banks’ – and many other international clients’ support – of these contracts creates much needed certainty in the market, as FIDIC’s standard forms promote a fair and balanced approach between the parties that use them on major construction contracts worldwide,” said Karakatsanis.
FIDIC’s president highlighted that a key part of the success of FIDIC contracts was due to the hard work of the team that develops them and keeps them up to date with industry developments. She paid tribute to the work of the FIDIC contracts committee under the leadership of Vincent Leloup and also the guidance and oversight of FIDIC’s general counsel for legal and contracts Daduna Kokhreidze.
Karakatsanis was followed by a keynote address on the development of FIDIC Contracts from Chris Seppälä, the legal advisor to the FIDIC Contracts Committee and FIDIC's official observer on the ICC International Court of Arbitration. He is also the author of The FIDIC Red Book Contract: An International Clause-by-Clause Commentary, acts as independent arbitrator and expert in international arbitrations and lectures widely on international construction contracts.
Seppälä (pictured below) began by talking about the history of FIDIC contracts, including the FIDIC Red Book. “You might think it is strange for us to be talking about history when we are looking to the future, but the past is important as it is important to know where we come from and the lessons we have learned from the development of previous contracts,” he said. Seppälä highlighted the historical influence of the World Bank in the development of FIDIC contracts, something which has continued to this day.
He also outlined the work of the FIDIC contracts committee over many years in developing and greatly expanding the suite of contracts which have become standard documentation for today’s industry. A common feature of this work, Seppälä said, has been ongoing efforts to keep the documents relevant in a changing industry and the titanic efforts of engineers down the years “who have laboured for many hours on the development of the contracts and without whom we would not be here today,” he said.
Seppälä’s keynote was followed by a conference session introducing the new Carbon Management Guide for FIDIC Contracts, the drafting of which started in March 2023 and a draft B is currently under review which is subject to change before final publication in 2025 by FIDIC. The session, chaired by Adriana Spassova, a member of the FIDIC Contracts Committee and partner of EQE Control, explained the principles behind the guide and why FIDIC has produced it, highlighting that the aim is to provide a robust framework for managing carbon emissions and driving sustainable practices throughout the lifecycle of engineering and construction projects.
The importance of the guide was underlined by the fact that the construction industry, one of the most resource-consuming sectors, is undergoing a slow transformation from a significant polluter to a sustainability enabler. Challenges in achieving carbon reduction targets include lack of collaboration motivation, insufficient knowledge and expertise and unreliable emissions data sources. Addressing resource limitations and specific training needs is crucial for successful implementation across diverse construction project sizes and complexities.
Hugo Fonseca, head of claims, dispute avoidance and resolution at ADEPT, presented the guidance’s structure, principles, tools for procurement and services. He stressed the importance of a project lifecycle approach adopted by the guidance, highlighted the key benefits of using it and also addressed the concerns of some stakeholders about what they were being asked to do as a result of the guidance’s implementation.
The first session was followed by one on Highlighting the key role of the Engineer in FIDIC Contracts, chaired by FIDIC contracts committee chair Vincent Leloup. Beyond managing technical issues during construction, the engineer plays a critical role in ensuring the safe execution of projects and resolving any technical and contractual matters. Drawing on real-world experiences, speakers highlighted the responsibilities and practicalities of the role while also addressing how the engineer’s duties are evolving and developing in an industry undergoing significant change.
A fascinating panel discussion covered a lot of ground including the engineer’s contract administration duties, handling variations, claims and determinations, the engineer’s role as first-tier in dispute avoidance, the challenges, obstacles and strategies for optimising performance, terms of reference and contractual obligations, the key dynamics of the client-engineer relationship and an overview of the skills and expertise required for the role.
The third session of the conference, chaired by vice-chair of the FIDIC contracts committee Mahmoud Abu-Hussein, focused on the global use of FIDIC contracts, with a special emphasis on the experiences of users worldwide. Representatives from leading financial institutions, multilateral development banks and major contractors using FIDIC contracts shared their perspectives on working with FIDIC forms on their projects internationally.
Panellist Yuting Chen, senior lecturer at London South Bank University (pictured above), spoke about a recent research report which collected 454 FIDIC Contract documents from 84 countries. All the 454 projects were involved with Chinese main contractor companies and Chen drew out some of the key trends observed and the lessons to be learned from her research.
She gave an overview of the most common significant amendments made to the contracts in the survey. These included arbitration, termination by contractor or employer, evaluation, extension of time for completion and contract price. The most common additions to the contracts included staff and labour, general conditions and stipulations around the contractor and engineer. Click here for more insights from the report.
Didier Guynet, a former principal procurement specialist with the Asian Development Bank (ADB) highlighted some of the recent and future trends in ADB procurement including its focus, since 2021, on promoting sustainable development through procurement. Guynet said that this focus includes the introduction of new qualification criteria, options to introduce specific evaluation criteria and a scoring of specific criteria and also environmental, health and safety and social impacts. He also outlined the bank’s drive on tackling climate change, which stipulated the management of carbon emissions during the construction cycle. Bidders for bank contracts were required to propose a methodology to measure carbon emissions with contractors asked to submit a ‘Carbon Management Plan’ aiming at reducing carbon emissions.
The afternoon sessions began with an update on FIDIC’s latest contract developments where attendees also had the opportunity to engage directly with a number of FIDIC contracts committee members in a Q&A session. Panellists for the lively discussion on a wide range of issues included FIDIC legal adviser Christopher Seppala, contract committee members Adriana Spassova, Husni Madi, Koray Ateş, Gagan Anand, Mahmoud Abu-Hussein and FIDIC’s general counsel Daduna Kokhreidze.
A session on sub-contracts, chaired by Asel Al Housan, managing director of AEH UK, offered some practical insights into the dynamics of sub-contracting, focusing on the relationship between the main contract and sub-contracts, as well as effective engagement with the supply chain. The panellists dealt with a variety of issues including back-to-back obligations, pay-when-paid provisions and their application and enforceability in different jurisdictions, duties of the contractor in defending subcontractor claims against its own employer, design liabilities, delay damages and when these can be applied, dealing with domestic variations and claims and also the specific rights and responsibilities of the subcontractor.
The final session of the first day reported on the feedback from the FIDIC Dispute Avoidance Forum, which took place on 2 December 2024, as well as the day’s earlier discussion tables on PPP contracts and case law developments. In the session, chaired by Daduna Kokhreidze, general counsel of FIDIC, certified adjudicator John Papworth reported on the interesting discussions that had taken place at the dispute forum on the details of conducting site visits and also on the key aspects of adjudication decisions. Participants at the forum where divided into six groups to discuss key aspects of site visits and decisions and provided comments as takeaways that will be taken into consideration for future FIDIC practice notes on these key issues.
Closing the first day of the conference, James Mwangi, FIDIC vice president and CEO of Kurrent Technologies, underlined the importance of an event that brings together FIDIC’s international contract user community. “Conferences like this one are very important in ensuring that FIDIC stays abreast of the latest developments, trends and changes in our global industry that impact on the legal, governmental and contractual frameworks in which we all work,” he said. Mwangi also said that FIDIC could not do what it does without the feedback it receives at such conferences and he thanked all attendees for their enthusiastic participation in the event.
FIDIC is grateful for the support it has received from the sponsors of the 2024 Official FIDIC International Contract Users Conference. Thanks go to strategic partner Fenwick Elliott, platinum sponsors White & Case and CMS, gold sponsors Pinsent Masons, HFW and Lupa Technology, welcome reception and silver sponsor Howard Kennedy and bronze sponsor Oracle.
