Dubrovnik 2022

ICC-FIDIC Conference on International Construction Contracts and Dispute Resolution!

DUB-Program References either HFG www.aid21.de/ and/or GuB GmbH Comments

RB1999 or RB2017 Inquiries / Clarifications
www.aid21.de/DUB123.pdf
Laying the Foundations : FiDiC rainbow suite and the FiDiC green Book.
1 Comparison Human Resource issues MDB2010 provides more protective laws for Human
Red,Yellow, Silver SC06.12-SC06.24 Resources and also defines fraudulent practices, applied
RYS 1999 and 2017 mostly from the Donors. But a separate Document is
Corrupt or Fraudulent usually added to Supply, Service and Works Contracts.
Practices SC15.6 Rainbow FiDiC does not protect the Human Resources:
2 Green Book 2021 Old Version 1999: mostly for sub-contractor with small
amounts up to 500.000 Euro, simple works, repeatable,
not complex and for short periods e.g. dry season.
3 Dispute Resolution Why the focus on the Green book defines the rules of the Red book in a short
Mechanism under the Green Book? manner;
Rainbow Suit Does it provides more influence to implementing
and agencies by the Sovereign immunity to overrule the
Green Book FIDIC rules;
more quarrels will arise, more DAAB referral, if not solved
by lubricants like monies, or more Lawyer inputs for
Arbitrations.
4 Role of Donors during Abide to Procurement Financing Agreements / Decisions
procurement, contracting Rules of Donor i.e. AfDB, EIB, JICA, ADB, EU-EDF, Badea, KfW
and contract implementation Donors/Funders
Ask about Almost all Tender >>> Recommendation :
Procurement Duties Dossiers (Supply, www.aid21.de/S+Clarifications-Procurement.pdf
of the Service and Work) have www.aid21.de/S+Calrifications-Shifts.pdf
Employers / defaults, either by Request for Clarification during the Tendering phase
implementing agencies. mistake, lack of ahead of submission of the Proposal (Service) or Bid
knowledge, (Works)
incompetence or by We are experts for Institutional Capacity Building
deliberate actions. www.aid21.de/Tutor.pdf

Contracting and arbitrating with state entities at the crossroads of Contracts and Procurement
5 Rights under local law and Authoritarian Systems misuse the rules of the FIDIC and
FIDIC contract – issue of overrule them with the local civil or common law.
“administrative Contracts” How can you abolish this violation of the basic
foundations of the FiDiC contract? How can you restore
the equilibrium of rights, duties, obligations,
responsibilities in line with fairness, basic moral
principles, unbiased and reasonable – without prejudice,
right-to-know, duty to minimize…
shortly called natural justice axiom.
Does DAABs and Arb Tribunals consider this miscarriage
/ interference due to sovereign immunity / privileges of
implementing agencies / Employers in their decision-
making process to discriminate other Parties?
DAABs decide about their jurisdiction.

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6 ACA, adjust ACA / Contract Provisional Sums are misused esp. if the indirect costs
Price are not defined in the Bill No 100
www.aid21.de/13.5+TypesofProvisionalSums.pdf
7 Insights from the Chinese are great and cleverer.
Belt and Road Initiative They let finance the international community the transport
BRI system to be able to move their goods with more profits
to the consumers, and prevent competition of the
adjacent countries to establish an own industrial
development.
Besides they provide (i) 70% of the real value of
investment only, lubricants / bribes shall be paid by
governments and (ii) Chinese ask for collaterals
www.ppe61.de/D+LoansvsGrantswithCollaterals.pdf
www.ppe61.de/OLAF1.pdf
8 Payment of Awards What is the meaning of Authoritarian Governments disregards the rights of the
Payment of Awards. civil societies. The misuse their privileges to infringe the
and rule of law of construction contracts in contract to
democratic constitutional societies.
sovereign immunity Sovereign immunity FiDiC Conditions of Contract and Golden Rules should
should not interfere the be obeyed by Governments, Implementing Agencies and
FiDiC principles to Employers and should not have legal privileges .
distort the concept of Otherwise Supply, Service, and Works Contractors
FiDiC equilibrium of should offer their performances / deliveries with a 25%
rights, duties, surcharge to cover these unforeseeable, unpredictable
responsibilities and risks:
impaired obligations Duty-to-cooperate, Duty-to-inform, Duty-to-fair, Duty-to-
from one side. know, Duty-to-disclose, Duty-to-pay + interest
9 Negotiations a settlement Disclosure of Observations: Governments bypasses the FiDiC
with public entities (Neutral information? procedural rules and discuss Agreements between
evaluation by the ICC Right-to-know! Government and Contractors.
Centre for ADR Formal Notices of Determinations (mutual Agreements
between CON + EMP, or ascertainment by ENG) are
NOT issued pursuant to SC03.5 (RB1999 / MDB2010).
Do you feel, such agreements between CON and EMP
are valid and can the Contractor later arraign such an
agreement due the impression, the CoC are being
violated by all three Parties : EMP, ENG, CON.
Variations and other changes
10 Variation instructed by the Ref RB1999: Variation instructed without Engineer’s request of
Engineer “or” proposed by SC13.1 + SC13.3 Variation Proposal, Contractor has to reserve his rights
the Contractor SC12.3 by issuance a Notice to Claim (SC20.1)
SC03.5 www.aid21.de/20.1+NoticetoClaim-Disruption.pdf
11 Value Engineering SC13.2 www.aid21.de/
12 Entitlements for RB1999 / MDB2010 Claim Procedure has to be applied, or Engineer instructs
unforeseeable physical SC04.12 a Variation with request of Variation Proposal.
conditions / exceptional Against “Contractor’s design has to be defined in the PCC”
events Clause www.aid21.de/S+DesignDuties.pdf
13 Adjustments for Changes in RB1999 Advanced Payment percentage should be considered in
Legislation and in Costs SC13.7 & SC13.8 the fixed indices: www.aid21.de/14.2+Advances-IDC.pdf
20% Advance should incorporate a crushing and
screening plant to save costs, so save increase of costs,
because “free-issued” material is not under the clause of
price escalation. A bonbon to the Contractor to cover up
his lubricants.

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14 Change in Quantities under Distinguish between
re-measurement contract SC13.3 (a) &
SC13.3 (b)
Two cases have to be
considered for new Rates
/ new Prices.
15 Changes in scope under Scope?
lump-sum contracts Quantity, Quality, similar
character, similar
(=fixe price sum contracts) conditions
New Rates and Prices
Attention: Some think,
the Specifications are
the Scope of Works!
16 Impact of Covid and Ukraine RB1999 SC08.4
war on contracts and Force Majeure
Parties’ entitlements Clause 19
Time for completion and delay
17 Advanced warning – when In principle a Duty-to-
is it necessary? inform all Parties, not a
one-way
RB2017 SC08.4 communication.
18 Extension of time and delay Arbitration
damages will not cure the
deficiencies
19 Concurrent delay SCL
V1 - 2002
V2 - 2017
20 Delay analysis – which Productivity- and
methodologies? Cost based methods
21 Money entitlement and role Arbitration
of experts in providing IBA-Rules
quantum
22 Delays caused by public or RB1999 : SC08.4
other authorities RB1999 : SC08.5
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All four criteria have to be fulfilled for Quantity changes
www.aid21.de/12.3+EvaluationofInstructions.pdf
www.aid21.de/12.3+EvaluationApproach.pdf
Criteria for Instructions of new rates/prices to consider
www.aid21.de/12.3+NewRateNewPrice.pdf
Claims (Evaluation + NoD SC03.7) or instructed
Variations (=undoubtfully eligible for payment and time
extension via Procedure of SC13.3, SC12.3 and SC03.5
(RB1999) are allowed, if the Scope of Works are not
cover up the initial temporary and initial permanent
Works.
www.aid21.de/12.3+NewRateNewPrice.pdf
Covid . Pandemic, Epidemic SC08.4 > EoT only.
Force Majeure in combination with SC17.3/SC17.4
> EoT, Cost, no profit margin
.
Advanced Warning letters do not replace the Notice to
Claim pursuant to SC20.2.1. A Notice to Request (fully
detailed particulars) shall be submitted as usual, too.
ALL Parties shall advise in advance of any known or
probable future events or circumstances
The Engineer may request a Proposal under SC13.3.2 …
(similar as RB1999 – SC08.3 para 3 – under a Variation
procedure)
Clever Claim substantiations with cause-effect nexus with
proven disruption/delay and break down of prices of the
Unit rates with sophisticated referrals to the DAAB will
furnish the essential data for eligibility / merits and
quantum in time, cost and profit.
Society of Construction Law
Which activities are dominant, caused by Employer or
caused by Contractor (www.aid21.de/03.5+ClaimSC.pdf)
Which have the equal causative potency to share the
liability for compensation or to identify the apportion
(Kostenumlage)
1_ Prospective CP Approach with no progress
2 _ Contemporaneous CP with progress and “hidden or
frank changes in Strategy”.
3 _ Retrospective CP Approach – from the end with
known delays
Reasons based on CoC and the Content of SC
www.aid21.de/03.5+ClaimSC.pdf
Public Utility companies – usually responsible for re-
design of the variations due to their specific
competences.
“shift of design to Contractor should be noted in the PCC”
and clearly defined for re-measurement and payment
(transparency).
23 Impact of Covid RB1999 SC08.4 Epidemic or Pandemic > EoT = yes, C+p = No.
and RB1999 Clause 19 www.aid21.de/08.4+Covid.pdf
war in Ukraine RB2017 Clause 18 Force Majeure – War - Exceptional Events

Suspension, Termination and their consequences – critical points for Employers and Contractors
24 Engineer’s Notice to RB1999 SC15.1 Fails to carry out any obligation under the Contract.
Correct. and SC16.2(a) Notice required to make good / remedy the default with a
Why is it necessary and Parties’ Notices allow all specified reasonable time
what is its significance? Parties to cure their If the Contractor fails to submit a Baseline Program,
defaults. revised Work Programs, is the Employer entitled to
terminate the Contract? Do you think a missing Work
Program prevents the Contractor to proceed the Works
under Clause 8 ! SC07.5 and SC07.6 [RB1999].
25 When a suspension RB1999 The entitlements for Termination are clearly described in
and when termination is SC15.2 the Conditions of Contract.
justified SC16.2 Do you think a missing Baseline / revised Work program
by the Employer will be considered as a substantial breach of Contract, if
or the Contractor has provided his Performance Security
Contractor? SC04.2, does not abandon works and proceed his works.
If he does not complete the Project the Employer asks for
DD and further delay may entitle for Termination. Is it so?
Think about: The axiom / contract compliance pacta sunt
servanda (contracts have to be kept/served) may prevail.
26 Consequences of wrongful Wrong-doings of tone Here a list of all items to recover loss and damages
termination Party bounces fully (summary for Employer’s and Contractor’s requests)
back. www.aid21.de/15.3+Valuation.pdf
27 Tricks for effective financial No tricks will help: If the Parties do not set up a proper contract
recovery??? If garbage is submitted administrative management with the Mantra of record,
due to non- fact gathering, abide to procedural rules and concretize
substantiated facts, the grounds/reasons, you can sit back.
hence garbage will Without a competent, experienced and skilful engineer in
come out. tec,fin, admin, logistic and contractual management with
No DAAB, no lawyer, no intelligent WBS/Scheduling-, clever Resource utilization
Arb tribunal will recover and Cost planning, you will lose the case
your loss, because the www.GuB21.de/20.1+Leverage.pdf
judge discovers your
claim as own defaults /
errors.
Noteworthy experience with the Rainbow Suit in dispute settlement and arbitration
28 Common Grounds for When does an dispute What happens, if the Engineer breaches the Contract
Dispute under the Rainbow exists! failing to submit a formal Notice of Determination
suite Without a formal Notice pertaining to RB1999 SC03.5 / RB2017 SC03.7
of Determination the Without a formal Notice of Determination, no Dispute can
Engineer breaches the arise, and hence any bypassing agreement between
Conditions of Contract. Employer and Contractor is not in compliance with the
FIDIC procedural rules.
29 The Engineer’s perspective Witnesses for Witness of a Party – Employer’s personnel Level of
Arbitrations? accountability/ credibility in contrast to impartial witnesses
shall be well considered.
Impartial – neutral www.aid21.de/20.6+IBA.pdf
International Bar Association.
30 Mediation and other options NoDiS + Amicable Preconditions for Mediations and Conciliations
for amicable settlement Settlement Procedure/guided Process by an experienced Engineer.
under SC20.5 / SC21.5 RB1999 www.aid21.de/21.0+Mediation-Conciliation.pdf

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31 Precautions to take when
engaging in amicable
settlement
32 Use of sealed offers for
decisions on Costs
> Calderbank offer
procedures
International Arbitration
33 Conditions to arbitration, the
scope of arbitration
34 Admissibility and jurisdiction
in construction arbitration
35 Relationship between DAB
proceedings and statue of
limitation
36 Enforcement of DAAB-
decisions
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SC20.4 Refer to www.aid21.de/20.6+Mediation-Advantages.pdf
DAAB-Decision page 4 : Basic Approach
SC20.5. (i) Precondition: ready and willing to participate, bring
Amicable Settlement along legal representatives, and authorized decision
makers
(ii) guided interactive process by experienced
construction managers with contractual knowhow
(iii) the Parties shall endorse their developed solution to
become final and conclusive. (rechtskräftig)
The Notice of NoDis subject to Clause 20
Dissatisfaction (NoDis) > Notice to Dissatisfy shall be given under SC20.4
SC20.4 against DAAB- > reasons of dissatisfaction
decision within 28 days, > set out matter of dispute
otherwise > if amicable settlement AS fails, the matter shall be
final & binding. settled by the ICC*** or as defined in the PCC !!!
> Timeline for AS, maximum 65 days (RB SC20.5)
A good overall structure There are different approaches:
would be great A _ the Calculation / Computation of the Unit Rates with
A _ preliminary and all the prime costs, preliminary and general costs,
general P&G provisions overhead, surcharges are sealed and open on demand in
A1 site establishment, A2 presence of all Parties.
site demob B _ The Contractor show his basic of break down of unit
A3 Time- and rates from the begin. This transparent procedure is
A4 value related costs recommendable, but it should be treated confidential.
with all surcharges like C _ A Sample shall show the breakdown of the Unit
superintendence, OH, rates.
HO, others. www.aid21.de/12.3+BDUR.pdf
B _ Break down of prime 1,2,3,4,5
costs (on average for the
entire projects) The Break down of the prime costs should also be
B1 _ Labour Expenses reflected in the Price Adjustment Formula
B2 _ Equipment (W&T)
B3 _ Material expenses
B4 _ total value of
expected nominated Sub-
Contractors with included Unusual shift of Design to the Contractor for Red Books /
P&G values. MDB2010 shall be clearly described with a Bill of
B5 _expected Unit Rate Quantity item to re-measure and pay the services in a fair
for shifted design to and reasonable manner.
Contractor. Extent www.aid21.de/
properly described
IBA-Guidelines on Party Representation in International
Arbitration www.aid21.de/20.6+IBA.pdf
Ref Templates of to ICC, UNCITRAL, SIAC, DiS, …
Selection of the www.aid21.de/DISARB.pdf
institutional Arbitration is
defined in the GCC
(SC20.6) or in the PCC
Amicable settlement RB1999 SC20.6 Obtain a DAAB decision
data are also to be SC20.5 Amicable Settlement
assessed / evaluated.
> Amicable Settlement Arbitrations > recognizable > enforceable.
> institutional arbitration
REF Construction Business published under www.aid21.de/HUB123.pdf

37 Probative weigh of DAAB
decisions in Arbitration
38 Enforcement of arbitral
awards – case law and
practical issues
39 Lessons learned
40 Directions for the future
50 HFG / GuB
Recommendation
or the option to litigate, if
the requirements are
met (EU-EDF)
Case Law is focussing
on Common Law and
not on Civil Law
approaches.
Post-preparation
Post-preparation
1 _ Contract Administration
Establish from the date of Letter of Acceptance an appropriate Contract
Administration Team. We help you for the start up and support you on a as-and-
when basis. . www.aid21.de/20.1+Leverage.pdf
The Arb Tribunal will start from the scratch, to reopen the
case.
Hence the probative force / facts will be adduced from the
Parties.
The approach may be differ between common law
(adversarial) and civil law (inquisitorial model – New
Prague Rules)
www.aid21.de/20.6+IndependentResearh.pdf
www.aid21.de/10.5+Tutor.pdf (Training)
Arbitral awards
Are they recognized in other countries that they can be
enforced? NY convention ratified?
Who is publishing a wrap up / executive
summary of the “lessons learned” out of the
seminar?
>>> Improve the assessment of damages in
Arbitration:
www.aid21.de/20.6+Damage.pdf
Who is publishing a wrap up / executive
summary of Directions for the future?
Keywords with short explanation will suffice the
purpose.

2 _ Experienced, skilful and competent Human Resources

Deploy well paid engineers with proof of their educational background, conversant in
the Contract language and EDP, and their experience in process and product
knowledge www.aid21.de/S+Remuneration-All.pdf

3 _ Essential Reporting required to substantiate or avert Claims/Variations.

The Mantra of fact gathering (i.e. Content of Engineer’s Diary / Work Register) in
compliance with SC04.21 Monthly Progress Report and Material flow to counter-
check the consistency of material delivery and utilization against Drawings.
www.aid21.de/14.5+MOS.pdf

4 _ Successful Audits
Our experiences, skills, knowhow and competences in construction business, Audits,
Evaluations, M&E, ROMs, Mid-Term Reviews help our Customer/Clients to achieve
their objectives according to their Terms of Refernces.
50 www.aid21.de/01.15+Audit-Success.pdf

If some links or expressions are not fully understandable, please inquire via
(i) E-mail : HFG2404@aid21.de or (ii) Skype: HFG2404

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