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WEBINAR

The FIDIC 2017Suite of Agreements

Presenter: Vincent LeloupFIDIC Contracts Committee

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PROGRAMME

1. FIDIC 2017 SUITE OF AGREEMENTSROOTS & HISTORY

2. FIDIC 2017 WHITE BOOK MAIN FEATURES

4. FIDIC 2017 SUB-CONSULTANCY AGREEMENT

5. FIDIC 2017 JV AGREEMENT

3. FIDIC WHITE BOOK MAIN CHANGES2017 vs 2006

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WEBINAR

The FIDIC 2017 Suite of Agreements

ROOTS AND HISTORY

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4 FIDIC White Book recent history

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5

History of other FIDIC Agreements

Sub-Consultancy Agreement (1st Ed. 1992)

The Joint-Venture Agreement(1st Ed. 1992)

For consulting firms bidding & implementing services agreements in JV or Consortium

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6 FIDIC 2017 Suite of Agreements

Client

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7 Guides

Guide to the Joint-Venture and Consultancy Agreement (1st Ed. 1994)

White Book Guide(2nd Edition 2001)

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8 For Consultants contracting a Representative

The Model Representative Agreement (2013)

Following a Test Edition in 2004

For consulting firms willing to contract the services of a business representative

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WEBINAR

The FIDIC White Book 2017

MAIN FEATURES

10 Main features of the 2017 White Book

Agreement is in force as of the Effective Date – date of latest signature of the Agreement

Consultant performs the Services which are stated in Appendix 1 as of the Commencement Date, and shall complete those within the Time for Completion.

Consultant shall proceed in accordance with the Programme, which is to complywith requirements stated in Appendix 4 and which it submits within 14 days fromCommencement Date

Excusable delays are defined and can provide for an EoT Standard of performance/care is reasonable skill, care and diligence, although

function & purpose of Services is taken into account Client liable for information provided to Consultant, who is under duty to review it

and promptly notify of any adverse finding Client may have to provide services, personnel or goods as listed under Appendix 2

11 Main features of the 2017 White Book

Services are subject to possible Variations Exceptional Events (formerly referred to as Force Majeure) excuse Parties of

performing their obligations Client is to pay the Consultant as per the details stated in Appendix 3 Any disputed amount in a Consultant’s invoice shall be notified by Client within 7

days of the invoice issue date. Otherwise payment is due. Failure to pay amounts due to the Consultant as per the Agreement is ground for

Consultant’s suspension of Services, and possibly termination of the Agreement

Client can suspend & terminate at will, and terminate for breach of material termor condition of the Agreement by the Consultant

12 Main features of the 2017 White Book

Liability of one Party to the other is limited to the reasonably foreseeable lossesthat are directly flowing from a breach

Liability is also limited to a cap, and in time Consultant is to take out and maintain a PI insurance and a public liability

insurance, plus any mandatory insurance according to applicable law Any dispute is to be first referred to senior representatives of the Parties for an

attempt of amicable settlement If it fails, adjudication is the next recourse and arbitration (default: ICC Rules) is the

final tier of dispute resolution

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13 Main features of the 2017 White Book

Consultant acting as Engineer undera Works Contract

Consultant deliveringtechnical

assistance, project

management or advisoryservices

Consultant acting as

designer for a Design-BuildContractor

Typical use of the 2017 White Book

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14 Time line under the White Book 2017

Effective Date of the

Agreement

Cl. 4.1 Date of latest signature

Completion of the whole of the ServicesCommencement

Date of the Services

Time for Completionof the Services

As set out under the PC

as may be amended for Consultant’s excusable delays

Possible key datesKD1

KD2

KD3

As per PC / Default: 14 d

SC 1.1.5

Cl. 4.4

Appendix 4

SC 4.3.1

SC 1.1.24

Programme14 d Client’s objection

=> resubmit

No objection = proceed

14 d

Consultant’s non-excusable delays = Client’s Notice for

acceleration of rate of progress

Cl. 4.5

Perform the Services withreasonable skill, care and diligence

SC 3.3.1

SC 4.3.2

Payment as per Cl. 7.1 and Appendix 3 [Remuneration and Payment]

Duration of liability

Cl. 8.2

Delay damages

But failure to meet the Time for Completion is a breach of the

Agreement => Consultant liable for general damages at law

Possible audit of Consultant’s records

Cl. 7.6

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FIDIC TRAINING COURSE

The FIDIC White Book 2017

Main changes against the 2006 Edition

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General provisions

Clarification of the order of precedence of Agreement documents (Cl. 1.15 and Form of Agreement)

Formal notification imposed for a wide range of events, under a specified format (SC 1.1.19, 1.1.26 and Cl. 1.3)

Change in Legislation – reference date is now the one of the Consultant’s offer/proposal (Cl. 1.5)

Concept of Exceptional Costs introduced (SC 1.1.12) i.e. those incurred by the Consultant and flowing from an event giving rise to a Consultant’s entitlement. This contrasts with the payment for regular Services (SC 7.1.1 and Appendix 3)

Intellectual Property – difference in between Background IP and Foreground IP (Cl. 1.7)

Additional anti-corruption representations and warranties (Cl. 1.10)

Joint & several liability of Consultant’s JV Members towards Client (Cl. 1.11)

Amendment to Agreement only in written form (Cl. 1.12)

Parties to act in good faith and in a spirit of mutual trust (Cl. 1.16)

Main changes against the 2006 Edition

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The ClientInformation that Client is able to obtain and which pertains to the Services = to be provided by

Client with due regard to the Programme (SC 2.1.1)

Responsibility for errors, omission and ambiguity in Client’s information = rests with Client, and to be corrected by Client – possible Variation (SC 2.1.3)

Duty of care of the Consultant in reviewing Client’s information (SC 2.1.2)

Main changes against the 2006 Edition

The ConsultantPerforms Services as per scope in Appendix 1 / No more Additional and Exceptional Services =>

only Services which are subject to Variations (Cl. 5), and possibly Exceptional Costs incurred

Function and purpose of Services to be taken into account by Consultant (SC 3.3.2) but that doesnot amount to a fitness-for-purpose obligation

Construction administration provisions (Cl. 3.9) – typically when the Consultant acts as engineer, employer’s representative or project manager under a Works Contract

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Time managementConsultant to provide a Programme for the performance of Services, in accordance with Appendix

4, and to proceed accordingly (Cl. 4.3)Express grounds for extension of the Time for Completion, with possible corresponding

compensation for Exceptional Costs (Cl. 4.4)Client empowered to instruct acceleration of rate of progress of the Services when delayed for

Consultant’s culpable reasons (Cl. 4.5)Concept of Exceptional Event introduced, which replaces « changed circumstances »: similar approach

as FIDIC Gold Book, superseding the Force Majeure concept under the 1999 FIDIC Contracts

Main changes against the 2006 Edition

Variations to ServicesA dedicated full new Clause (Cl. 5)

Variations initiated following the issue of a Variation Notice (SC 5.1.1) / Consultant bound by Variation unless it notifies that it does not possess the relevant skills/resources to perform it, or it

substantially changes the extent of nature of the Services (SC 5.1.4)Value of Variation to be agreed before Variation proceeds, but if not possible/practicable to do so

Client can instruct commencement => Consultant compensated on a time-spent basis as per Appendix 3 (Cl. 5.2)

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Suspension / Termination

A dedicated full new Clause (Cl. 6) / a process now much further detailed and stream lined

Additional cause for suspension of Services by Consultant – failure by Client to satisfy the requirements of Clause 2.4 on Employer’s financial arrangements (SC 6.1.2 (c))

Services to resume once cause for suspension ceases (Cl. 6.2)

Effects of suspension detailed, with possible entitlements to extension of Time for Completion and compensation for Exceptional Costs incurred (SC 6.3.3)

5 grounds for Client’s termination are expressly laid down, with different effects prescribeddepending on termination event (SC 6.4.1 and Cl. 6.5)

5 grounds for Consultant’s termination are expressly laid down, with different effects prescribeddepending on termination event (SC 6.4.2 and Cl. 6.5)

Main changes against the 2006 Edition

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Liabilities

Parties are liable for their breaches of the Agreement (SC 8.1.1) – that is stating the obvious, but isexpressly stated so as to stress the difference with the 2006 WB which introduced a difficulty in this

respect (Consultant only liable if in breach of his duty of care)

Main changes against the 2006 Edition

Dispute resolutionMediation is now replaced by adjudication as second-tier of dispute resolution under Cl. 10.2

/ Arbitration remains the third and final tier of dispute resolution under Cl. 10.4

Rules for Adjudication have been inserted under Appendix 5 – they follow the FIDIC Green Book (1999) approach – ad’hoc adjudication, 56 days from a dispute referral for the adjudicator to issue

his/her decision

Each Party bears its own cost in adjudication, but adjudicator empowered to decide on the payment apportionment of his/her own fees (SC 10.2.2. and Rule 17 for Adjudication)

Reflection of FIDIC’s view on adjudication decisions – they are binding even if challenged by either Party, unless and until revised in arbitration / Failure to comply with a decision can be

referred to arbitration (SC 10.5.1)

FIDIC TRAINING COURSE

The FIDIC Sub-Consultancy Agreement2017 Edition

STRUCTURE & MAIN FEATURES

22 FIDIC Sub-Consultancy Agreement - Structure

23 Main features of the 2017 Sub-Consultancy Ag. Back-to-back philosophy for obligations of the Consultant (towards the Client

under the White Book) which are subcontracted to the Sub-Consultant

Similar structure as the FIDIC White Book, and, to a very large extent, similar(sometimes identical) wording

2 drafting options were available1. Using a « mutatis mutandis » approach with the FIDIC White Book 2017,

whereby obligations are stated to be the same as in WB, with WB Client beingreplaced by SCA Consultant, and WB Consultant by SCA Sub-Consultant

Pro: General Conditions are then short and limited to the specificities of the Sub-Consultancy Agreement

Con: The Sub-Consultancy Agreement can only be used if the Client / Consultant Agreement is drafted based on the FIDIC White Book 2017

24 Main features of the 2017 Sub-Consultancy Ag.

2 drafting options were available2. Or using a « repeat » approach whereby the FIDIC WB 2017

obligations would be replicated to a large extent in the SCA (with WBClient being replaced by SCA Consultant, and WB Consultant by SCASub-Consultant), with specific Sub-Consultancy provisions to be added Pro: The Sub-Consultancy Agreement becomes autonomous from

the White Book, and can be used even if the White Book is not used as in between the Client and the Consultant

Con: General Conditions become more extensive in text

The repeat approach was finally selected, for the sake of a wideruse of the SCA even in context where the WB is not used

FIDIC TRAINING COURSE

The FIDIC Model Joint-Venture (Consortium) Agreement

STRUCTURE & MAIN FEATURES

JV Agreement 2nd Edition – 2017Designed for unincorporated JV, where a

JV of firms acts as Consultant under a Services Agreement such as the White Book

Structure:• Agreement General Conditions (24)• Appendices 1 to 9

1. Particular Conditions – Part A (References/Agreement Data) + Part B (Additional or Amended Clauses) – prevailing on GC

2. Financial Administration Services3. Allocation of the obligations4. Financial Policy and Remuneration5. Steering Committee6. Project Director7. Project Manager8. Cross Guarantee and Indemnity Agreement9. Code of Conduct

27 Main features of the 2017 JV Agreement

Suitable for unincorporated JV (Consortium) i.e. where the JV Members areforming an association for the implementation of a Services Agreement with a Client,but are not willing to establish a legal entity for doing so.

All JV Members are meant to be jointly and severally liable towards the Client(see SC 14.1, and FIDIC White Book SC 1.11.2)

JV Agreement promotes an integrated team approach to achieve satisfactorycompletion of Services to a Client

28 Main features of the 2017 JV Agreement

JV Agreement is meant to be established as early as before the preparation of aProposal to Client – contractual exit route is provided in case the Proposal is notsuccessful (see SC 13.1)

JV Agreement sets out: the allocation of responsibilities in between the JV Parties, their respective financial Shares The management framework in between the Members, through a Steering

Committee Detailed contractual machinery for handling a defaulting Member Dispute resolution provisions

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Thank you for your attention

Q&A