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THE ARBITRATION CLAUSE IN FIDIC CONTRACTS FOR MAJOR WORKS

International Construction Law Review

THE ARBITRATION CLAUSE IN FIDIC CONTRACTS FOR MAJOR WORKS CHRISTOPHER R SEPPÄLÄ * Partner, White & Case LLP, Paris Legal Advisor, FIDIC Contracts Committee I. INTRODUCTION While the arbitration clause in the 1999 edition of the Fédération Internationale des Ingénieurs-Conseils (“FIDIC”) 1 contracts for major works 2 only comprises, on a literal reading, sub-clauses 20.6 to 20.8 of the contracts, one cannot understand the clause without considering the conditions which must or should be satisfied before any claim may be submitted to arbitration. This is because if a party does not satisfy such conditions, it may have no right to arbitration. Accordingly, for the arbitration clause to be fully intelligible, it needs to be considered together with sub-clause 20.1, the provision for claims, 3 sub-clauses 20.2 to 20.4, the provisions for a Dispute Adjudication Board, and sub-clause 20.5, the provision for amicable settlement. In short, the provisions of clause 20 (“Claim, Disputes and Arbitration”) need to be read together. This article will review the main features of clause 20 of the FIDIC contracts. II. MAIN FEATURES OF THE ARBITRATION CLAUSE 1. Clause 20 (like the corresponding provisions of FIDIC’s earlier books) provides for a multi-step procedure for the resolution of disputes Under the FIDIC contracts for major works, the traditional “two-tier” procedure for the resolution of disputes contained in the FIDIC Red Book, fourth edition (1987) has been maintained, except that the role of the * The views expressed herein are those of the author and not necessarily those of the FIDIC Contracts Committee. Copyright 2004. This paper was originally delivered at a conference on “The Resolution of Disputes under International Construction Contracts” organised by the International Chamber of Commerce and FIDIC which took place in Paris on 29–30 April 2004. 1 FIDIC means in English the International Federation of Consulting Engineers, whose address is World Trade Center II, Geneva Airport, 29 Route de Pré-Bois, Cointrin, CH-1215 Geneva 15, Switzerland. Its e-mail address is fidic@fidic.org and its website is http://www.fidic.org . 2 FIDIC’s contracts for major works are: the Conditions of Contract for Construction or “Red Book”, the Conditions of Contract for Plant and Design-Build or “Yellow Book” and the Conditions of Contract for EPC/Turnkey Projects or “Silver Book”. 3 However, sub-clause 20.1 (“Contractor’s Claims”) will not be reviewed in this paper as it has already been examined in another paper by the author, “Contractor’s Claims under the FIDIC Contracts for Major Works”, which is due to be published in the Construction Law Journal , London, shortly. Pt 1] Arbitration Clause in FIDIC Contracts 5

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