24/05/2018

The FIDIC Contracts

A Two - Day Seminar organised
by Cornerstone
The Roles of the Employer and the Engineer

Introduction

• Engineer is the Agent of the Employer (3.1(a))

•Limited: “authority attributable … as specified … in the Contract”

•No power to amend the Contract.

Engineer not obliged to act impartially (but see Clause 3.5 “fair determination”)

Only obligation re impartiality is that of the DAB (Clause 20)

Engineer’s many powers:

• 3.1, 3.2, 3.3, 3.5, 5.1, 5.2, 5.4, 5.6, 7.3, 7.4, 7.5, 7.6, 8.1, 8.3, 8.4,
8.6, 8.8, 8.9, 8.11, 8.12, 9.2, 9.3, 9.4, 10.1, 10.2, 10.3, 11.6, 11.8,
12.2, 13.1, 13.3, 13.5, 13.6, 13.7, 13.8, 14.2, 14.3, 14.5, 14.6, 14.9,
14.10, 14.11, 14.13, 15.1 15.3, 16.1, 17.4, 19.6, 20.1.

• General pattern:
• Engineer makes decisions on time and money on behalf of Employer
• Engineer performs procedural functions.
• Engineer may give instructions (3.3)
• Engineer has power (which may be limited) to make variations.
• Engineer certifies compliance and payment liability.
• Some rights (e.g. termination) are reserved to the Employer

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Sub-Clause 3.5: Determinations

3.5 Whenever these Conditions provide that the Engineer shall proceed in
accordance with this Sub-Clause 3.5 to agree or determine any matter, the
Engineer shall consult with each Party in an endeavour to reach
agreement. If agreement is not achieved, the Engineer shall make a fair
determination in accordance with the Contract, taking due regard of all
relevant circumstances.

The Engineer shall give notice to both Parties of each agreement … Each
Party shall give effect .. Unless and until revised under Clause 20 ..

Contrast Clause 3.7 2017 edition

“The Engineer shall act neutrally between the Parties and shall not be
deemed to act for the Employer.”

Design Obligations

• Red Book gives these to the Engineer.

• The Design is provided together with the specifications

• Yellow and Silver Books to the Contractor (Clause 5.1)

• The Contract sets out Employer’s requirements on the basis of which the Contractor is
required to design.

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Clause 2: The Obligations of the Employer

1. Give Contractor access to the Site

2. Reasonable assistance for Permits, Licences or Approvals;

3. Employer’s Financial Arrangements; and

4. Employer’s Claims.

Sub-Clause 2.4: Employer’s Financial

Arrangements
2.4 The Employer shall submit, within 28 days after receiving any request from the
Contractor, reasonable evidence that financial arrangements have been made and are being
maintained which will enable the
Employer to pay the Contract Price (as estimated at that time) in accordance with Clause 14
[Contract Price and Payment]. the Employer intends to make any material change to his
financial arrangements, the Employer shall give notice to the Contractor with detailed
particulars.

Sub-Clause 2.4: Employer’s Financial

Arrangements
Sub-clause 16.1 provides that if the employer fails to furnish such
evidence under 2.4, the contractor is entitled to suspend the work or
terminate the contract under sub-clause 16.1,

Contractor’s Entitlement to Suspend

Work; and sub-clause 16.2, Termination by Contractor.

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Sub-Clause 2.4: Employer’s Financial

Arrangements
Note:
• The meaning of reasonable evidence;
• The 28 day period for providing the
• information;
• The requirements for a notice if material changes to financial arrangements.

Sub-Clause 2.5: Employer’s Claims

• Applies to all money claims and DNP extension claims
• Requirement for notice with particulars (2 exceptions)
• “as soon as practicable” but not condition precedent
• Specify Clause
• Include substantiation
• Engineer decides under Clause 3.5
• Contrast with Contractor 20.1 (time and money)
• Condition precedent that given in 28 days.