Webinar gives the lowdown on new FIDIC Green Book

27 Sep 2022

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The latest event in FIDIC’s contracts webinar series took place on 27 September 2022 and focused on the updated FIDIC short form of Contract, the FIDIC Green Book 2021, which meets industry demands for a contract for projects where the perceived level of risk is low or where construction parties need a contract form that is simple and easy to use, writes FIDIC communications advisor Andy Walker.

The webinar, All you need to know about the new updated FIDIC Green Book 2021, was organised by the FIDIC contracts committee and speakers at the webinar discussed some of the new features of the updated green Book and its potential application in the market.

Introducing the event, which was attended by around 250 industry professionals, FIDIC’s general counsel for legal and contracts Daduna Kokhreidze said that this was the latest webinar in FIDIC’s contracts series of events which offered insights and information to contract users and other industry professionals with an interest in FIDIC contracts.

Speakers at the event included Vincent Leloup, chair of the FIDIC contracts committee, Mahmoud Abu Hussein, senior manager, procurement and contracts for UAE at Dolphin Energy Limited, James Perry, partner at PS Consulting and Robert Aloys Werth, adjudicator and dispute resolution expert at Werth-consult.

First speaker, Vincent Leloup, chair of the FIDIC contracts committee and the principal drafter of the 2021 Green Book, highlighted some of the market feedback that the previous 1999 Green Book had received and that had informed the development of the new updated version. This showed that FIDIC listened to users and used the feedback to help inform the development of new documents, Leloup said. He also outlined some of the new features of the updated contract, which included IP, confidentiality, limitation of liability provisions, and new definitions. The contract also included more use of liquidated damages provisions for delay (including PGC) and termination and various new insurance requirements.

Mahmoud Abu Hussein, senior manager, procurement and contracts for UAE at Dolphin Energy Limited, highlighted some of the variations included in the new contract and how to value them. Hussein outlined the detailed procedure for requesting variations under the contract and the key role of the engineer in that. While necessarily detailed, this explanation of the variation process and how it works in practice was clearly useful to all those attending.

Hussein also explained the approach taken to risk allocation with the updated contract. He said that the drafting objectives included maintaining FIDIC’s balanced risk allocation, simplifying the contractual machinery and ensuring clarity and certainly. He also outlined some of the insurance provisions, which were supported by a detailed insurance table in the contract data. All insurance requirements (e.g. ‘insuring party’, insurance cover, deductible and exclusions) were set out in the contract data table and insurance certificate(s), in the form annexed to the PCs, issued/endorsed by the insurer(s) to evidence effecting and maintaining the required insurance to be submitted by the insuring party, he said.

James Perry, partner at PS Consulting, highlighted some of the other new features of the Green Book including the obligations of the parties and the role of the engineer. The employer’s role had substantially changed in the new 2021 edition due to the introduction of the engineer, Perry said. “The engineer is a new feature in the new updated contract, but their role is very similar to that outlined in other FIDIC contracts,” he said. Perry also talked about the contractor’s obligations and he also outlined some of the stipulations and recommendations on quality and taking over work.

Robert Aloys Werth, adjudicator and dispute resolution expert at Werth-consult and a 2021 Green Book drafter, gave an overview of the suspension and termination process under the new contract and also spoke about the claims process, which was underpinned by a key approach that “all the parties shall use their reasonable endeavours to avoid or minimise the effect of all claim events or circumstances.” Addressing dispute preventions and resolution and the role of the adjudicator, Werth said that the Green Book offered several options available to the parties when requesting an adjudicator’s services. The first option was only for binding decisions, the second, for time-to-time informal assistance and binding decisions; and the third option was for regular informal assistance (including through regular site visits) and binding decisions.

It was clear from the many detailed questions raised by attendees that the session was of great value in explaining the new features of the new Green Book and that there is clearly a lot of appetite in the industry to use the new contract which would help when there was a need for a contract form that is user-friendly, simple, straightforward and easy to use.

Click here to view details of future FIDIC webinars and to book places.

Click on the link below to watch the webinar recording.

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