i-law

International Construction Law Review

THE GAP IN SUB-CLAUSE 20.7 OF THE 1999 FIDIC CONTRACTS FOR MAJOR WORKS

NAEL G BUNNI

BSc, MSc, PhD, CEng, FICE, FIEI, FIStructE, FCIArb, FIAE, MConsEI Chartered Engineer, Conciliator and Registered Chartered Arbitrator Visiting Professor in Construction Law and Contract Administration at Trinity College, Dublin.

INTRODUCTION

Christopher Seppälä has always written and had published extremely useful articles on the FIDIC contracts and his most recent article published in ICLR,1 is no exception. The article dealt with and explained the complex and difficult provisions of the arbitration clause in the 1999 FIDIC contracts for major works. Mr Seppälä also explained the thinking behind the various sub-clauses of clause 20 of these contracts and as the Editors in Chief of ICLR mentioned in their Introduction, he identified many points which have to be borne in mind by the parties when operating that clause. Mr Seppälä’s articles are also thought-provoking and prompt the reader to consider many practical aspects for the practising engineer within the context of the topic.
This latest article prompts me to consider the gap that exists in the present sub-clause 20.7 of these contracts and the practical problems that might arise as a result, from the point of view of the practising engineer and perhaps the arbitrator who would have to resolve the consequent dispute. The gap I am referring to is that created when a DAB’s decision has not become final and binding (i.e. where one of the parties is dissatisfied with the decision), and the party against whom the decision was made fails to comply with it. In such circumstances, there is no solution offered within clause 20 other than simply treating the non-compliant party as being in breach of contract. However, as the remedy for such breach is damages that might be imposed at some future date, it is of little value in the immediate term and is in violation of the requirement in sub-clause 20.4 that the parties shall “promptly give effect” to the DAB’s decision itself.2 In this article, I attempt to highlight the extent of this gap and the hidden problems within clause 20 in that connection.


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Gap in Sub-Clause 20.7 of 1999 Fidic Contracts

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