WEBINAR. The FIDIC 2017 Suite of Agreements. Presenter: Vincent Leloup FIDIC Contracts Committee. Exequatur, 2017

Transcription

1 WEBINAR The FIDIC 2017 Suite of Agreements Presenter: Vincent Leloup FIDIC Contracts Committee Exequatur, 2017

2 PROGRAMME 1. FIDIC 2017 SUITE OF AGREEMENTS ROOTS & HISTORY 2. FIDIC 2017 WHITE BOOK MAIN FEATURES 3. FIDIC WHITE BOOK MAIN CHANGES 2017 vs FIDIC 2017 SUB-CONSULTANCY AGREEMENT 5. FIDIC 2017 JV AGREEMENT Exequatur, 2017

3 WEBINAR The FIDIC 2017 Suite of Agreements ROOTS AND HISTORY Exequatur, 2017

4 4 FIDIC White Book recent history Exequatur, 2017

5 5 History of other FIDIC Agreements The Joint-Venture Agreement (1 st Ed. 1992) For consulting firms bidding & implementing services agreements in JV or Consortium Sub-Consultancy Agreement (1st Ed. 1992) Exequatur, 2017

6 6 FIDIC 2017 Suite of Agreements Client Exequatur, 2017

7 7 Guides Guide to the Joint-Venture and Consultancy Agreement (1st Ed. 1994) White Book Guide (2 nd Edition 2001) Exequatur, 2017

8 8 For Consultants contracting a Representative The Model Representative Agreement (2013) Following a Test Edition in 2004 For consulting firms willing to contract the services of a business representative Exequatur, 2017

9 WEBINAR The FIDIC White Book 2017 MAIN FEATURES Exequatur, 2017

10 10 Main features of the 2017 White Book Agreement is in force as of the Effective Date date of latest signature of the Agreement Consultant performs the Services which are stated in Appendix 1 as of the Commencement Date, and shall complete those within the Time for Completion. Consultant shall proceed in accordance with the Programme, which is to comply with requirements stated in Appendix 4 and which it submits within 14 days from Commencement Date Excusable delays are defined and can provide for an EoT Standard of performance/care is reasonable skill, care and diligence, although function & purpose of Services is taken into account Client liable for information provided to Consultant, who is under duty to review it and promptly notify of any adverse finding Client may have to provide services, personnel or goods as listed under Appendix 2

11 11 Main features of the 2017 White Book Services are subject to possible Variations Exceptional Events (formerly referred to as Force Majeure) excuse Parties of performing their obligations Client is to pay the Consultant as per the details stated in Appendix 3 Any disputed amount in a Consultant s invoice shall be notified by Client within 7 days of the invoice issue date. Otherwise payment is due. Failure to pay amounts due to the Consultant as per the Agreement is ground for Consultant s suspension of Services, and possibly termination of the Agreement Client can suspend & terminate at will, and terminate for breach of material term or condition of the Agreement by the Consultant

12 12 Main features of the 2017 White Book Liability of one Party to the other is limited to the reasonably foreseeable losses that are directly flowing from a breach Liability is also limited to a cap, and in time Consultant is to take out and maintain a PI insurance and a public liability insurance, plus any mandatory insurance according to applicable law Any dispute is to be first referred to senior representatives of the Parties for an attempt of amicable settlement If it fails, adjudication is the next recourse and arbitration (default: ICC Rules) is the final tier of dispute resolution

13 13 Main features of the 2017 White Book Typical use of the 2017 White Book Consultant acting as Engineer under a Works Contract Consultant acting as designer for a Design-Build Contractor Consultant delivering technical assistance, project management or advisory services Exequatur, 2017

14 14 Time line under the White Book 2017 Effective Date of the Agreement Cl. 4.1 Date of latest signature As per PC / Default: 14 d SC Commencement Date of the Services SC Perform the Services with reasonable skill, care and diligence KD1 SC Time for Completion of the Services KD2 As set out under the PC KD3 14 d Client s objection Programme => resubmit 14 d SC No objection = SC proceed Possible key dates Appendix 4 Cl. 4.5 Consultant s non-excusable delays = Client s Notice for acceleration of rate of progress Completion of the whole of the Services Duration of liability Cl. 4.4 as may be amended for Consultant s excusable delays Delay damages Cl. 8.2 But failure to meet the Time for Completion is a breach of the Agreement => Consultant liable for general damages at law Possible audit of Consultant s records Cl. 7.6 Payment as per Cl. 7.1 and Appendix 3 [Remuneration and Payment] Exequatur, 2017

15 FIDIC TRAINING COURSE The FIDIC White Book 2017 Main changes against the 2006 Edition Exequatur, 2017

16 16 General provisions Main changes against the 2006 Edition Clarification of the order of precedence of Agreement documents (Cl and Form of Agreement) Formal notification imposed for a wide range of events, under a specified format (SC , and Cl. 1.3) Change in Legislation reference date is now the one of the Consultant s offer/proposal (Cl. 1.5) Concept of Exceptional Costs introduced (SC ) i.e. those incurred by the Consultant and flowing from an event giving rise to a Consultant s entitlement. This contrasts with the payment for regular Services (SC and Appendix 3) Intellectual Property difference in between Background IP and Foreground IP (Cl. 1.7) Additional anti-corruption representations and warranties (Cl. 1.10) Joint & several liability of Consultant s JV Members towards Client (Cl. 1.11) Amendment to Agreement only in written form (Cl. 1.12) Parties to act in good faith and in a spirit of mutual trust (Cl. 1.16)

17 17 Main changes against the 2006 Edition The Client Information that Client is able to obtain and which pertains to the Services = to be provided by Client with due regard to the Programme (SC 2.1.1) Responsibility for errors, omission and ambiguity in Client s information = rests with Client, and to be corrected by Client possible Variation (SC 2.1.3) The Consultant Duty of care of the Consultant in reviewing Client s information (SC 2.1.2) Performs Services as per scope in Appendix 1 / No more Additional and Exceptional Services => only Services which are subject to Variations (Cl. 5), and possibly Exceptional Costs incurred Function and purpose of Services to be taken into account by Consultant (SC 3.3.2) but that does not amount to a fitness-for-purpose obligation Construction administration provisions (Cl. 3.9) typically when the Consultant acts as engineer, employer s representative or project manager under a Works Contract

18 18 Main changes against the 2006 Edition Time management Consultant to provide a Programme for the performance of Services, in accordance with Appendix 4, and to proceed accordingly (Cl. 4.3) Express grounds for extension of the Time for Completion, with possible corresponding compensation for Exceptional Costs (Cl. 4.4) Client empowered to instruct acceleration of rate of progress of the Services when delayed for Consultant s culpable reasons (Cl. 4.5) Concept of Exceptional Event introduced, which replaces «changed circumstances»: similar approach as FIDIC Gold Book, superseding the Force Majeure concept under the 1999 FIDIC Contracts Variations to Services A dedicated full new Clause (Cl. 5) Variations initiated following the issue of a Variation Notice (SC 5.1.1) / Consultant bound by Variation unless it notifies that it does not possess the relevant skills/resources to perform it, or it substantially changes the extent of nature of the Services (SC 5.1.4) Value of Variation to be agreed before Variation proceeds, but if not possible/practicable to do so Client can instruct commencement => Consultant compensated on a time-spent basis as per Appendix 3 (Cl. 5.2)

19 19 Main changes against the 2006 Edition Suspension / Termination A dedicated full new Clause (Cl. 6) / a process now much further detailed and stream lined Additional cause for suspension of Services by Consultant failure by Client to satisfy the requirements of Clause 2.4 on Employer s financial arrangements (SC (c)) Services to resume once cause for suspension ceases (Cl. 6.2) Effects of suspension detailed, with possible entitlements to extension of Time for Completion and compensation for Exceptional Costs incurred (SC 6.3.3) 5 grounds for Client s termination are expressly laid down, with different effects prescribed depending on termination event (SC and Cl. 6.5) 5 grounds for Consultant s termination are expressly laid down, with different effects prescribed depending on termination event (SC and Cl. 6.5)

20 20 Main changes against the 2006 Edition Liabilities Parties are liable for their breaches of the Agreement (SC 8.1.1) that is stating the obvious, but is expressly stated so as to stress the difference with the 2006 WB which introduced a difficulty in this respect (Consultant only liable if in breach of his duty of care) Dispute resolution Mediation is now replaced by adjudication as second-tier of dispute resolution under Cl / Arbitration remains the third and final tier of dispute resolution under Cl Rules for Adjudication have been inserted under Appendix 5 they follow the FIDIC Green Book (1999) approach ad hoc adjudication, 56 days from a dispute referral for the adjudicator to issue his/her decision Each Party bears its own cost in adjudication, but adjudicator empowered to decide on the payment apportionment of his/her own fees (SC and Rule 17 for Adjudication) Reflection of FIDIC s view on adjudication decisions they are binding even if challenged by either Party, unless and until revised in arbitration / Failure to comply with a decision can be referred to arbitration (SC )

21 FIDIC TRAINING COURSE The FIDIC Sub-Consultancy Agreement 2017 Edition STRUCTURE & MAIN FEATURES

22 22 FIDIC Sub-Consultancy Agreement - Structure

23 23 Main features of the 2017 Sub-Consultancy Ag. Back-to-back philosophy for obligations of the Consultant (towards the Client under the White Book) which are subcontracted to the Sub-Consultant Similar structure as the FIDIC White Book, and, to a very large extent, similar (sometimes identical) wording 2 drafting options were available 1. Using a «mutatis mutandis» approach with the FIDIC White Book 2017, whereby obligations are stated to be the same as in WB, with WB Client being replaced by SCA Consultant, and WB Consultant by SCA Sub-Consultant Pro: General Conditions are then short and limited to the specificities of the Sub-Consultancy Agreement Con: The Sub-Consultancy Agreement can only be used if the Client / Consultant Agreement is drafted based on the FIDIC White Book 2017

24 24 Main features of the 2017 Sub-Consultancy Ag. 2 drafting options were available 2. Or using a «repeat» approach whereby the FIDIC WB 2017 obligations would be replicated to a large extent in the SCA (with WB Client being replaced by SCA Consultant, and WB Consultant by SCA Sub-Consultant), with specific Sub-Consultancy provisions to be added Pro: The Sub-Consultancy Agreement becomes autonomous from the White Book, and can be used even if the White Book is not used as in between the Client and the Consultant Con: General Conditions become more extensive in text The repeat approach was finally selected, for the sake of a wider use of the SCA even in context where the WB is not used

25 FIDIC TRAINING COURSE The FIDIC Model Joint-Venture (Consortium) Agreement STRUCTURE & MAIN FEATURES

26 JV Agreement 2 nd Edition 2017 Designed for unincorporated JV, where a JV of firms acts as Consultant under a Services Agreement such as the White Book Structure: Agreement General Conditions (24) Appendices 1 to 9 1. Particular Conditions Part A (References/Agreement Data) + Part B (Additional or Amended Clauses) prevailing on GC 2. Financial Administration Services 3. Allocation of the obligations 4. Financial Policy and Remuneration 5. Steering Committee 6. Project Director 7. Project Manager 8. Cross Guarantee and Indemnity Agreement 9. Code of Conduct

27 27 Main features of the 2017 JV Agreement Suitable for unincorporated JV (Consortium) i.e. where the JV Members are forming an association for the implementation of a Services Agreement with a Client, but are not willing to establish a legal entity for doing so. All JV Members are meant to be jointly and severally liable towards the Client (see SC 14.1, and FIDIC White Book SC ) JV Agreement promotes an integrated team approach to achieve satisfactory completion of Services to a Client

28 28 Main features of the 2017 JV Agreement JV Agreement is meant to be established as early as before the preparation of a Proposal to Client contractual exit route is provided in case the Proposal is not successful (see SC 13.1) JV Agreement sets out: the allocation of responsibilities in between the JV Parties, their respective financial Shares The management framework in between the Members, through a Steering Committee Detailed contractual machinery for handling a defaulting Member Dispute resolution provisions

29 29 Thank you for your attention Q&A Exequatur, 2017