Training Slides of Claims and Counterclaims Preparation, Analysis, Assessment and Successful Settlement of Disputes , discussing the importance of Claims and Counterclaims.
Some Key-Points:
- The Framework of Compliance
- Corporate Governance
- Compliance Program
For further information regarding the course, please contact:
info@asia-masters.com
www.asia-masters.com
11. Vendor performance tracking
system
Any deficiencies found as part of the closeout process
are documented and communicated to all appropriate
parties
Vendor Performance Tracking System
Exceptional performance
Unethical business practices
Repeated delivery and performance issues
Report vendor performance on purchases $25,000 or
greater
The scope & accuracy of the data collected is
dependent upon the participation of agencies.
32. 32
• In 1999, FIDIC revised its Forms of Contract
• The four FIDIC Forms of Contract are:
− Conditions of Contract for Construction (New Red Book)
− Conditions of Contract for Plant and Design-Build (New
Yellow Book)
− Conditions of Contract for EPC Turnkey Projects (Silver
Book)
− Short Form of Contract (Green Book)
(Note that FIDIC will be launching its Design, Build and
Operate (DBO) Contract (Gold Book) in mid 2008)
Note that these are just model contracts. The parties are
expected to adapt them to their own projects
V. Introduction to FIDIC and its Dispute Resolution Provisions (2)
33. 33
• FIDIC Dispute Resolution provision is set out in Clause 20 of the
New Red, New Yellow and Silver Books
• Approach used by FIDIC is the Dispute Adjudication Board (DAB)
which issues a decision, as opposed to Dispute Review Board
which issues a recommendation
• The FIDIC DAB provisions apply whenever a FIDIC contract is
used unless parties delete the provision
• FIDIC DAB decisions are immediately binding and parties are
obliged to comply with the decision pending other stages of the
dispute resolution procedure, e.g. revised by amicable settlement
or arbitral award
• New Red (Construction Contract) and New Yellow (Plant and
Design-Build Contract) Books provide for Engineer to act as
adjudicator and DAB. Silver Book (EPC Contract) has no
Engineer, so disputes under Silver Book must be handled by
DAB.
V. Introduction to FIDIC and its Dispute Resolution Provisions (3)
43. 43
FIDIC Procedure for Contractor’s Claims
28 day Notice of Claim to Engineer
42 day “Fully Detailed Claim”
to Engineer
“Final Claim” 28 days after end of effects
42 days after receipt of claim
Engineer’s Response
Clause 3.5 Engineer to“Agree or Determine”
Clause 20.1
Contractor’s Claims
Clause 3.5
Determinations
28 day Notice of Claim to Employer
42 day “Fully Detailed Claim”
to Employer
“Final Claim” 28 days after end of effects
42 days after receipt of claim
Employer’s Response
Clause 3.5 Employer to“Agree or Determine”
Given effect unless
Contractor’s Notice of Dissatisfaction
14 days of receipt
New Red/Yellow
Books
Silver Book
Agreement/Determination
given effect unless revised under Clause 20
V. Introduction to FIDIC and its Dispute Resolution Provisions (4)
44. 44
FIDIC Procedure for Contractor’s Claims
Reference to Dispute Adjudication Board (DAB)
(1 or 3 people)
DAB Decision
within 84 days of reference
“Amicable Settlement” stage
ICC Arbitration
within 56 days after Notice of Dissatisfaction
Clause 20.2
Clause 20.4
Clause 20.5
Clause 20.6
No Notice of Dissatisfaction
within 28 days of Decision
Notice of Dissatisfaction
within 28 days after 84 days of referenc
No DAB Decision
within 84 days of reference
Notice of Dissatisfaction
within 28 days of Decision
DAB Decision
final and binding
V. Introduction to FIDIC and its Dispute Resolution Provisions (5)
45. 45
FIDIC Procedure for Employer’s Claims
New Red/Yellow
Books
Silver Book
Employer or Engineer gives
notice and particulars to Contractor
Employer gives
notice and particulars to Contractor
Clause 3.5 Engineer to
“Agree or Determine”
Clause 3.5 Employer to
“Agree or Determine”
Clause 2.5
Employer’s
Claims
Clause 3.5
Determinations
Reference to Dispute Adjudication Board (DAB)
(1 or 3 people)
“Amicable Settlement” stage
ICC Arbitration
within 56 days after Notice of Dissatisfaction
Clause 20.5
Clause 20.6
Clauses 20.2 and 20.4
(See previous diagram for
full Clause 20.4 procedure)
Agreement/Determination given
effect unless revised
under Clause 20
Given effect unless
Contractor’s Notice of Dissatisfaction
14 days of receipt
V. Introduction to FIDIC and its Dispute Resolution Provisions (6)
46. 46
• Procedural Rules for DAB are set out in Annex to Dispute
Adjudication Agreement
• DAB shall visit site at intervals of not more than 140 days but
not less than 70 days at request of either Employer or
Contractor
• DAB to use site visits to become and remain acquainted with
progress of the Works and actual/potential problems or claims
• DAB to produce a report after each site visit
• DAB may conduct hearings and request exchange of
statements
• DAB can adopt an inquisitorial procedure and refuse admission
to hearings or grant audience to any persons other than parties’
representatives
• DAB can open up, review and revise any certificate, decision,
determination, instruction, opinion or valuation of the Engineer
V. Introduction to FIDIC and its Dispute Resolution Provisions (7)
51. 51
• If the owner in an international construction project is a
sovereign state instead of a private company, a contractor with
a claim may be able to start investment treaty arbitration instead
of following contractual dispute resolution procedures
• Or if state interferes with a contractor’s project with a private
owner, contractor may still have a claim against the state under
an investment treaty
• Typical claims under investment treaties are based on
interference by the state in the project, including by action of the
legislature, the courts, local government, tax authorities etc
• Investment treaty arbitration can be better than “normal”
arbitration as it gives access to neutral, offshore proceedings,
and international law remedies that may not be available under
contract or in the courts
• Can be very powerful, especially as China has concluded over
VII. Investment Treaty Arbitration and Construction Disputes (1)
54. 54
• Question – are construction projects considered an
“investment” in the context of investment treaty arbitration?
• See Salini v Morocco (2001) – two Italian contractors filed for
ICSID arbitration against Morocco over a dispute arising
under a contract for construction of a highway. The contract
provided for resolution of disputes in domestic courts.
Claimants alleged that Morocco’s failure to pay was a
violation of the “fair and equitable treatment and protection
against indirect expropriation” in the Morocco-Italy BIT.
Morocco raised jurisdictional objection that dispute was not
in relation to investment under Art. 25(1) of ICSID
Convention and Art 1 of the Morocco-Italy BIT.
• Held: Contract for construction of a highway was an
investment under both treaties. Tribunal upheld jurisdiction
over the investors' claims.
VII. Investment Treaty Arbitration and Construction Disputes (4)
57. 57
• Resist temptation to limit pool of arbitrators, e.g. by requiring
arbitrator to have esoteric experience
• Don’t forget the governing law clause; and if you are using a
standard form contract, choose governing law that is
compatible with the contract
• Consider consolidation/joinder for supplier/subcontractor
contracts
• If consolidation/joinder impossible, try to get the dispute
resolution clauses as similar as possible, e.g. same arbitration
rules, governing law provisions
VIII. Advice on Drafting International Construction Dispute Resolution
Provisions (2)
58. 58
• Ideally, make sure that dispute resolution clauses in
performance bonds are identical with main contract dispute
resolution provisions
• No language stating that contractor must wait until after
completion before commencing final dispute resolution
proceedings
• Ask for courts or (more realistically) arbitration in your home
jurisdiction as a starting point
• Agree to an arbitration friendly place of arbitration if home
jurisdiction not available, e.g. Hong Kong, Singapore, London,
Paris
• If in doubt, seek specialist advice
• Keep enforcement considerations in mind, e.g. location of other
party’s assets
VIII. Advice on Drafting International Construction Dispute Resolution
Provisions (3)
59. 59
• For China-related arbitration, consider:
− That PRC Arbitration Law is currently interpreted by many
as not permitting in China either ad hoc arbitration or
arbitration administered by institutions based outside China
− Specifying that arbitration administered by selected
institution, rather than merely referring to selected
arbitration rules
− Providing for appointment of arbitrators other than those on
the institution’s panel
− Providing that sole/presiding arbitrator not being the same
nationality as the parties
− Avoiding two languages (e.g. English and Chinese) as the
languages of the arbitration: keep it to only one language
VIII. Advice on Drafting International Construction Dispute Resolution
Provisions (4)
61. 61
• When a dispute arises:
− Keep a close eye on notice provisions and other conditions
precedent to claims in your contract, and time limitations
for bringing claims and defences
− Gather facts and seek legal and expert advice early
− Take care in what you write and don’t write to the opposing
party (do protest, don’t make unintended concessions)
− Evaluate chances of success early, and act upon that
evaluation
− Carefully explore all settlement options, especially ADR
(e.g. mediation)
− Look at exposure of performance bonds
IX. Advice on Preparing for and Conducting International Construction
Disputes (2)
62. 62
• During arbitration or litigation:
− Set up dedicated internal team to maximise efficiency and
minimise disruption to project
− Work with specialist external lawyers, arbitrators and
experts,
− Work together with your external team, don’t just let them
get on with it
− Prepare and monitor realistic litigation budgets
− Get management commitment to ensure cooperation of
project participants
− Always keep settlement and ADR possibilities in mind
IX. Advice on Preparing for and Conducting International Construction
Disputes (3)