Disputes through Arbitration in FIDIC Construction Contracts - Dissertation Example

Download file to see previous pages Claims may happen under any of the contracts for a specific project, contractor-subcontractor, employer-contractor, or employer–consultant either on BOT (Build, Operate, and Transfer) or a turnkey project. The turnkey construction contract is also called “Design & Build” (“D & B”) or an EPC (Engineering, Procurement, and Construction) contract, which is a contractual arrangement thereby imposing the entire accountability for the construction and design of the work on a contractor. The phrase “turnkey “refers that after finishing up the work, the contractor is only handed over the key to the owner or the employer to start the operations of the constructed project.

Delays in construction contracts can be classified as excusable or non-excusable. An excusable delay means a delay that may justify a prolongation of performance of the contract’s time and some examples of excusable delays are unpredictable weather, changes initiated by the employer, issues with the project designs, acts of god, delays in receiving equipment, which is supplied by the owner, varying or differing work-site conditions, delay due to awarding of contract and labor disputes. If the main contractor is eligible to claim time extension due to unpredictable weather conditions, the subcontractor may be also eligible to claim time extension if the subcontract contains a “flow down” clause thereby obligating the conditions in the main contract which is automatically applied to the subcontract also and as it includes analogs excusable delay provisions.

Under the non-excusable delay, the contractor bears the risk of outcome and cost, not only for himself but also for the resulting effect on others like subcontractors also. Due to mismanagement, a main contractor may encounter delays, which will also the delay the work done by the subcontractor. In such cases, the main contractor may be accountable to the subcontractors but not to the employer. The notion of non-excusable delay is employed chiefly as a shield to turn down the request for claims for delay or for a time extension.

The international body of consulting engineer association is known as FIDIC. The claims’ procedures detailed under all the 1999 FIDIC contracts are more or less analogues . In any construction contract, the process of finding a solution to claims is regarded to be the most significant part of any stipulations or conditions of the contract. Since 1957, the FIDIC contract form has been employed for international construction projects. ...Download file to see next pages Read More