William Godwin - The 2017 FIDIC Contracts

Adverse climatic conditions

Clause 8.4(c) in the 1999 Red and Yellow Books gives the Contractor a right to claim an extension of time in respect of exceptionally adverse climatic conditions, but the meaning of this expression often gave rise to dispute. Clause 8.5(c) in the 2017 editions of the two Books goes some way to providing clarity, but at the expense of limiting the scope of this ground to adverse climatic conditions at the site which are unforeseeable having regard to climatic data made available by the Employer and/or which are published in the relevant country for the geographical location of the site. 10 By thus limiting the conditions to those affecting the site only, the Contracts now exclude claims based on adverse conditions elsewhere which affect the Contractor's ability to maintain progress (by, for example, interfering with supply chains).

Cost of remedying defects/training

Red Book contractors should note that clause 11.2 in the 2017 edition has expanded the scope of the Contractor's responsibility for executing outstanding or remedial works under clause 11.2 and a new clause 4.5 introduces a requirement to train the Employer's employees and/or other specified personnel if stated in the Specification.

Although responsible, by clause 4.1(d), for submitting the as‐built documents and operation and maintenance manuals prior to commencement of the tests on completion, the 1999 Red Book Contractor has no training obligation and no specific liability in the terms of clause 11.2(c) of the other two Books. (In the 1999 Yellow and Silver Books clause 11.2(c) requires the Contractor to execute at his own risk and cost any works resulting from improper operation or maintenance attributable to matters for which he is responsible under clauses 5.5–5.7 – that is, training (to the extent specified in the Employer's Requirements), provision of as‐built documents and operation and maintenance manuals – or otherwise.)

These differences have now been removed in the 2017 Red Book. The Red Book Contractor now has an obligation to provide training for the Employer's employees and/or other specified personnel under clause 4.5 if this is stated in the Specification, and has the same responsibility (under clause 11.2(c)) in respect of improper operation or maintenance attributable to any failure to provide such training, operation and maintenance manuals or as‐built records as the Yellow and Silver Book Contractor. 11

Liability for care of the works and indemnities

Clause 17.3 in the 1999 editions of the three Books defines a number of Employer's risks which, if they eventuate, entitle the Contractor to claim an extension of time and/or cost for rectifying any resulting loss or damage. Clause 17.2 of the 2017 Books adds significantly to the risks borne by the Employer 12 and includes in particular a general sweeping‐up provision covering any act or default of the Employer's personnel or the Employer's other contractors.

The Employer's indemnities in favour of the Contractor under clause 17.5 have also been expanded to include, as well as death or personal injury, loss of or damage to any property other than the works which is attributable to any negligence, wilful act or breach of contract by the Employer, Employer's personnel or any of their respective agents. The Employer must also indemnify the Contractor in respect of all loss or damage to property, other than the works, to the extent that it arises out of any of the events for which the Employer bears the risk under clause 17.2. 13

Extensions of time

In all three of the 2017 Books the Contractor's entitlement to claim an extension of time has been increased.

(a) Access routesThe 1999 Books all provide for the Contractor to bear the costs of any non‐suitability or non‐availability of access routes for the use required by the Contractor without apparent qualification. If an access route were, for example, altered by the Employer or those for whom he was responsible, including his other contractors on site, the Contractor might be able to rely on clause 8.4(e) to claim an extension of time if he suffered delay as a result, on the basis that the alteration of the route was a delay, impediment or prevention caused by or attributable to the Employer, his personnel or his other contractors on site; but if the route were altered by a third party the Contractor would not be able to come within this ground and clause 4.15 would not appear to give him any basis for claiming an extension either.The Contractor's position has been improved by clause 4.15 of the 2017 Books, which provides (in the last paragraph of clause 4.15) that to the extent that non‐suitability or non‐availability of an access route arises as a result of changes to the access route by a third party, as well as the Employer, after the Base Date and they result in delay and/or cost the Contractor may claim an extension of time and/or payment of that cost. This fills an important gap in the 1999 forms.

(b) Private utilitiesThe Contractor under the 2017 Books is now able to claim an extension of time in respect of delays caused not only by public authorities but also private utilities in the country of the project under a new clause 8.6. In the 1999 contracts clause 8.5 permitted a claim only in respect of delays caused by public authorities. This updates the earlier forms to reflect the fact that many utilities are now provided by private entities and represents a significant addition to the Contractor's right to claim.

(c) Shortages in Employer‐supplied materialsThe Contractor may in all three 2017 Books claim an extension of time in respect of unforeseeable shortages in the availability of Employer‐supplied materials, as well as personnel or goods, caused by epidemic or government actions (clauses 8.5(d) 2017 Red and Yellow Books and 8.5(c) Silver). In the 1999 editions of the Red and Yellow Books the Contractor (by clause 8.4(d)) is only able to claim for unforeseeable shortages in personnel or goods caused by epidemic or government actions and in the 1999 Silver Book this ground is not available at all. The 2017 editions have therefore created an entirely new basis of claim for the Silver Book Contractor and increased the scope of the existing sub‐paragraph (d) of clause 8.4 in the other two Books by including Employer‐supplied materials.

Latent defects in plant

The 1999 contracts provide for defects which become apparent after the Employer's acceptance of the works (by issue of the Performance Certificate) by treating each party as remaining liable for the fulfilment of any unperformed obligations at that time, the Contract to be deemed to remain in force for the purpose of determining the nature and extent of such unperformed obligations (clause 11.10). There is no time limit placed on the extent of this liability; that question depends on the governing law.

The 2017 contracts contain the same provision for latent defects in clause 11.10, but introduce a time limit with respect to plant. In relation to plant, the Contractor is not to be liable for any defects or damage occurring more than two years after expiry of the Defects Notification Period for the plant, unless this is prohibited by law or in any case of fraud, gross negligence, deliberate default or reckless misconduct. Thus, subject to those exceptions, and unless clause 11.10 is amended in the special provisions, the Employer now faces a two‐year cut‐off for bringing any claims in respect of latent defects in plant, that is, any apparatus, equipment, machinery or vehicles whether on the site or otherwise allocated to the Contract and intended to form or forming part of the permanent works (clause 1.1.65 2017 Red Book/1.1.66 Yellow Book/1.1.56 Silver Book).

Termination for convenience and omitted work