International Construction Law Review
THE EVOLUTION OF CLAIMS ARISING OUT OF UNFORESEEN PHYSICAL CONDITIONS IN HONG KONg
Dean Lewis1
INTRODUCTION
Claims under construction contracts often involve difficulties encountered by a contractor dealing with ground conditions. These claims can arise out of numerous matters, depend on the form of contract used, bespoke provisions of the contract, both express and implied, the amount of site investigation material provided or available to tendering contractors, the impact of any particular circumstance that arose after work commenced and what the engineer might have done after those circumstances arose. This article will not occupy considerations of these specific types of events. Instead, it will approach the subject by reviewing the evolution of claims arising out of unforeseen physical conditions, with emphasis on Hong Kong. Of course, construction claims do not get to the courts very often in Hong Kong because nearly all construction contracts include arbitration agreements.
There have been lots of arbitrations in Hong Kong dealing with claims arising out of unforeseen physical conditions but very little in the way of court authority on the subject. Even if one knows therefore that arbitrators or adjudicators have given important decisions on such claims, it is not possible to report on them unless there is information in the public domain. Fortunately, there is some information in this regard which can be referred to.
This article will first briefly review the allocation of risk under construction contracts for unforeseen physical conditions; secondly will briefly review the alternative approaches that have developed for claims for unforeseen physical conditions, in particular the physical impossibility argument; finally, it will review the shared risk regime under what is referred to as the unforeseen physical conditions provision, including the Geotechnical Baseline Report method.
Pt 2] Evolution of Claims in Hong Kong
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