14/01/2016 1 Best Practice & Procurement Workshop Sebastian Hök, PHD (Göttingen) FIDIC Legal Advisor FIDIC Approved Adjudicator (FIDIC President´s List) FIDIC Accredited Trainer FIDIC Workshop • Introduction to the construction industry • Introduction to contracts and types of contracts • Balance between rights (entitlements) and duties (obligations) under construction contracts • Different roles of stakeholders under the contract, owner, contractor and consultant • Dispute resolution FIDIC Workshop • Basics Acceptance Contract Date End of Liability Duty to make good Time for Completion
• Introduction to contracts and types of contracts
• Balance between rights (entitlements) and duties (obligations) under construction contracts
• Different roles of stakeholders under the contract, owner, contractor and consultant
• Dispute resolution
FIDIC Workshop
• BasicsAcceptanceContract Date End of Liability
Duty to makegood
Time for Completion
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FIDIC Workshop
• Since 1876 the “Majella” constituted the Civil Code of Kuwait
• 25 Feb 1981 Kuwaiti Civil Code came into force• Art 1 (2) Civil Code provides:• In the absence of an applicable provision in thelaw, the judge shall decide according to custom, in the absence of custom, the judge shall exercisehis independent judgment guided by theprinciples of Islamic jurisprudence which aremost consistent with the facts and interest in thecountry.
FIDIC Workshop
• Section I – General norms concerning the contract for work
• Art. 661 et seq.
• Section II ‐ Norms concerning contracts of buildings and constructions
• Art. 689 et seq.
FIDIC Workshop
• Comparative Table: Law vs. FIDIC
AcceptanceContract Date Limitation Period
Performance Certificate
Time for Completion
CommencementDate
BaseDate
Site Visit
or TOC
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FIDIC Workshop
• Article 661 –
• By a contract for work one of the contracting parties undertakes to perform a service in consideration of remuneration without being dependent of said party or his representative.
FIDIC Workshop
I. Supply of Materials
Article 662
Article 663
Article 664
Article 665
FIDIC
See Clause 4.1 (provide services plus materials)
See Clauses 7.1, 4.1
No equivalent, but see Clause 17.2
No equivalent, but see Clause 4.20
FIDIC Workshop
• Article 662 –
• 1) The contractor may undertake to supply his work only, the master of the work being responsible for the supply of the necessary materials.
• 2) The contractor may also undertake to supply the whole or part of the materials as well as his work.
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FIDIC Workshop
• Article 663 –
• 1) When the contractor undertakes to supply the whole or part of the materials to be used in the work, said materials shall be in compliance with the agreed specifications; if there is no agreement about the specifications, the materials shall satisfy the set purpose.
• 2) The contractor shall guarantee the defects of said materials which could not be detected on taking over the work, in accordance with the provisions concerning warranty of a defect in the thing sold.
FIDIC Workshop
• Article 664 –
• 1) When the materials are supplied by the master, the contractor is bound to preserve them with the care of a reasonable person, to use them with technical skill, to account to the master for their use in the work and return to him any such materials that remain.
• If the whole or part of the materials becomes unfit for use owing to the contractor's neglect or lack of professional skill, the contractor is bound to refund to the master the value thereof in addition to such compensation as may be due.
FIDIC Workshop
• Article 665 –
• 1) If during the execution of the work some defects arise or appear in the materials provided by the employer, or there are other factors preventing the execution of the work in appropriate conditions, the contractor shall immediately notify the employer.
• 2) If the contractor neglects to notify, he shall be liable for the results of his negligence.
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FIDIC Workshop
II. Contractor´s Obligations
Article 666
Article 667
Article 668
Article 669
Article 670
FIDIC
Clauses 8.1, 8.2 and 7.1 and 4.1 and 4.11
Clauses 7.5, 7.6, 15.2
Clause 15.2 (c) (i)
See Clause 17.2
No equivalent
FIDIC Workshop
• Article 666 –• 1) The contractor shall perform the work in accordance with the conditions of the contract within the set period; if there are no conditions or no set period, he shall be committed to achieve it in accordance with the accustomed principals, within the reasonable period required by the nature of the work and in compliance with the custom established for the trade.
• 2) In the absence of an agreement or trade custom to the contrary, the contractor shall provide, at his own expense, the workers, the tools and accessory appliances necessary for the performance of the work.
FIDIC Workshop
• Article 667 –• 1) If, in the course of execution, it is established that the contractor is
performing the work in a manner that is defective or contrary to the agreement, the master may formally summon him to adopt the proper manner of working, within a reasonable period fixed by him. If after the expiration of such a period the contractor fails to adopt the proper or agreed manner of working, the master may either demand resiliation of the contract or obtain the permission from the court to perform the works at the cost of the first contractor, provided that the nature of the work allows it.
• 2) He may ask for rescission of the contract without need of summon or determination of a term when rectification of the defective manner of performance or of the violation is impossible
• 3) In all cases, the judge may refuse the request for rescission of the contract if the defective manner of working does not tend to significantly reduce the value of the work or its suitability for the use for is intended purpose to such compensation as may be due.
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FIDIC Workshop
• Article 668 ‐ If the contractor is late in commencing the work or in completing it such as it would be highly improbable that he will be able to do it in the proper way and within the time limit fixed, if he adopts an attitude showing his intention not to execute his obligation or if he commits an act, which renders the execution of said obligation impossible the master may rescind the contract without having to wait until the time limit for delivery has fallen due.
FIDIC Workshop
• Article 669 –
• When works are destroyed or deteriorated by a fortuitous event or a force majeure before delivery to the master, the contractor has no claim either for the price of his work, or for reimbursement of his expenses, unless the master has not fulfilled his obligation of taking delivery of the work when the works are destroyed or deteriorate
FIDIC Workshop
• Article 670 –• 1) When the materials are supplied by the master, and the
works are destroyed or deteriorated by a fortuitous event or a force majeure before delivery, the master has no claim for the price of the supplied materials, unless the contractor has not fulfilled his obligation of delivering the work and if the contractor did not establish that the thing would have perished or would have been damaged with the employer if it had been delivered to him.
• 2) The work materials shall be deemed provided by the master if the latter has paid its price to the contractor or has paid an account in which said price is included.
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FIDIC Workshop
III. Employer´s Obligations
Article 671
Article 672
Article 673
Article 674
Articl 675
Article 676
Article 677
Article 678
Article 679
FIDIC
Clause 1.9 RB
Clause 10.1 – Taking‐Over
Clause 10.1 – Rejection of Acceptance
No equivalent (with regard to the preventionprinciple as laid down in Article 674
Clause 11 (with regard to waiver and hidden defects
Clause 14 (due date in respect of payment)
No equivalent
No equivalent (with regard to the entitlement to a reasonable price or quantum meurit)
No equivalent, but read Clause 4.11
FIDIC Workshop
• Article 671 – 1) If the execution of the work requires that the employer undertakes a determined work and he did not achieve it in due time, the contractor may entrust him to achieve it within a reasonable term he sets.
• 2) If said term expires and the employer has not fulfilled his obligation, the contractor may ask for the termination of the contract without prejudice to his right of indemnity if due.
FIDIC Workshop
• Article 672 –
• When the contractor completes the works and places them at the master's disposal with notifying him, the master shall take delivery in accordance with prevailing custom. When the master fails, without reasonable cause, to take delivery of the works, the works will be deemed to have been delivered.
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FIDIC Workshop
• Article 673 –• 1) The master may abstain from taking delivery of the work if the
defects in the work or the violation of the agreed conditions reach a limit, which makes said work fail to meet the intended purpose, taking into consideration article 691.
• 2) If the violation did not attain this degree of gravity the master has no alternative but to claim reduction of the price commensurately with the gravity of the violation, or to force the contractor to carry out the repairs within a suitable time limit if it is possible to repair the work without incurring exorbitant expenses.
• 3) In all cases, the contractor may carry out the repairs within a suitable time limit if the repairs are possible and do not cause onerous prejudicial on the master.
FIDIC Workshop
• Article 674 –
• The master shall not invoke the rights provided for in the previous article, if he caused the defect whether by issuing orders against the opinion of the contractor or in any other way.
FIDIC Workshop
• Article 675 –• 1) When the works have been taken over de facto or de jure the contractor's responsibility is waived in respect of the defects which are apparent therein and in respect of violation of the terms of the contract, taking into consideration article 692.
• 2) If the defect were hidden and was spotted by the Master after the delivery, he shall have to report the same to the contractor taking into consideration the custom of the work, otherwise he will be deemed as having accepted the work. If the contractor was informed in due time, article 673 shall be applied.
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FIDIC Workshop
• Article 676 –• 1) If the work consists of several parts or where the price
has been fixed on the basis of the unit the contractor may receive a prorate of the price to the extent of the part of the work which has been completed after inspection and reception, under the condition that the completed part is distinct or of adequate significance as compared with the totality of the work, unless there is an agreement otherwise.
• 2) It would be assumed that the inspection of the part the price of which has been paid has been carried out and accepted unless it is revealed that the payment was only on account.
FIDIC Workshop
• 678 –
• When the remuneration has not been fixed in the contract, the contractor shall be entitled to the quantum meruit at the moment of the conclusion of the contract.
FIDIC Workshop
• Article 679 –
• Without prejudice to the provisions of article 198, the increase or decrease in the costs of the shall not influence the extend of the obligations set by the contract.
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FIDIC Workshop
IV – The assignment of the contract for work and the sub‐contract
Article 680 – Assignment of Contract
Article 681 – Subcontracting
Article 682 – Action Directe
Article 683 ‐ Subcontractor´s Privilege
FIDIC
Clause 1.7
Clauses 4 and 5 RB, Clause 4 YB
No equivalent, but similarity with Clause5.4 RB
No equivalent
FIDIC Workshop
V ‐ The end of a contract for work
Article 684
FIDIC
Clauses 15 and 16
FIDIC Workshop
Section II
Article 692 Decennial Liability
FIDIC
No equivalent
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FIDIC Workshop
Practical Examples
and
Case Studies
FIDIC Workshop
Exercises on
Programming
33
Design1
Review2
Time Time Design
Procurement
Time
Time
Levels & positions
TimeExcava‐tion
Time
Bad Weather
TimeCustomsClearance
Time
Review Time
Setting Out Time
Etc. Time
Resources
Methods
Resources
Methods
Resources
Methods
Resources, Methods Resources, Methods
Resources, Methods
Mobilization Time
Resources, Methods
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ProcessCalculations
• 90 d
Method • ???
CriticalFloat Float
Early Start Late Start Early End Late End
StructuralEngineering
• 7 d
Finite Elements Method
• ???
CriticalFloat Float
Early Start Late Start Early End Late End
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Case Study 1Low Productivity
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38
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Case Study 2
Omission of Work
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42
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44
45
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FIDIC Workshop
FIDIC Workshop
48
FIDIC Workshop
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49
FIDIC Workshop
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FIDIC Workshop
Total view
Contractor Employer
DAB Member
DAB Member
DAB Member
Dispute Adjudication Agreement
Dispute Adjudication Agreement
Dispute Adjudication Agreement
Activity level
Jurisdiction level
bilateral
tripartite
51
FIDIC Workshop
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52
FIDIC Workshop
FIDIC Workshop
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FIDIC Workshop
54
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55
FIDIC Workshop
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FIDIC Workshop
FIDIC Workshop
5757
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58
FIDIC Inhouse Training
59
FIDIC Workshop
60
FIDIC Workshop
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61
FIDIC Workshop
62
FIDIC Inhouse Training
FIDIC Workshop
63
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FIDIC Workshop
64
FIDIC Workshop
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66
FIDIC Inhouse Training
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67
FIDIC Inhouse Training
68
FIDIC Inhouse Training
Case Study 3
Appointment of DAB Members
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FIDIC Workshop
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FIDIC Workshop
70
FIDIC Workshop
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FIDIC Workshop
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FIDIC Workshop
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FIDIC Workshop
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7979
FIDIC Workshop
International Federation of Consulting EngineersPresident Jae-Wan Lee, Korea
