The changes include:

• The errata issued in December 2018;
• The additional errata issued in June 2019; and further errata and new amendments made in November 2022 (and said to be effective from 1 January 2023) which FIDIC states are ‘improvements & clarifications in response to industry feedback + to support the increased use of 2017 contracts’.

This article written by Victoria Tyson, a Director at Corbett & Co. And a regular speaker at Cornerstone Seminars, draws your attention to 10 of the key areas of change in respect of the FIDIC Red Book 2017 including the definition of Claim, matters to be agreed or determined, the definition of Dispute and Exceptional Events.

It is unlikely that the Parties will amend their existing FIDIC contracts to incorporate these changes retrospectively or prospectively (none are significant enough to justify the effort), but it will be interesting to see how the changes are used in the interpretation of the original
2017 edition.

FIDIC 2022 Reprints: 10 Key Areas Of Change In The FIDIC Red Book 2017

1. Definition of Claim

At Sub-Clause 1.1.6, the definition of Claim has been amended so that it now excludes matters to be agreed or determined under Sub-Clause 3.7 (a). This means that a Claim is clearly distinguished from the matters to be agreed or determined which are listed in Sub-Clause 3.7 (a). This is a welcome clarification.

2. Agreement or Determination

Under Sub-Clause 3.7, matters or ‘Claims’ which require an Engineer’s agreement or determination must comply with a specified procedure. In the 2022 reprints, matters and Claims are separated into sub-paragraphs (a) and (b). Under sub-paragraph (a) matters are now limited to those provided for in 13 specific sub-clauses which each identify the date of commencement of the time limit for agreement. The list of 13 specific sub-clauses is not expressed to be exclusive and therefore the list is, perhaps, unnecessary.

The Guidance states: ‘ It should also be noted that if there is a matter that is specifically required to be agreed or determined, as referred to in [Sub-Clause 3.7 (a)] (which, in turn, refers to specific listed Sub-Clauses that each expressly states that the particular matter is to be agreed/determined), then such a matter is not included in the definition of “Claim”. It follows, therefore, that the express and detailed provisions in Clause 20 do not apply to the matter. Instead, it is stated in each of such listed Sub-Clauses that the Engineer […] is obliged to proceed with the agreement/determination of the matter. Each such listed Sub-Clause expressly states what date shall be “the date of commencement of the time limit for agreement ” under [Sub-Clause 3.7.3] and, thereafter, [Sub-Clause 3.7.5] addresses the situation where a Party may be dissatisfied with the determination of a particular matter.’

3. Definition of Dispute and deemed Disputes

At Sub-Clause 1.1.29 there is a new and simpler definition of Dispute. It now requires:

(a) a Claim, or a matter to be agreed or determined under Sub-Clause 3.7 (a);
(b) an Engineer’s determination rejecting in whole or in part (i) the Claim (or a deemed rejection if the determination is not given within the time specified in Sub-Clause 3.7.3) or (ii) the Party’s assertion(s) in respect of the matter; AND
(c) a NOD from either Party.

This distinguishes a Claim from a matter to be agreed or determined, and both (together with a NOD) are required to fall within the definition of Dispute.

Replacing ‘claim’ with ‘Claim’ means that a Dispute will be confined to disputes between the Parties. It will not include claims against third parties.

In certain circumstances, a Dispute may now be fast-tracked. At Sub-Clause 21.4, wording has been added to identify certain situations in which a Dispute shall be deemed to have arisen, and which may be referred directly to a DAAB for a decision (i) without the need of a Sub-Clause 3.7 agreement or determination and NOD, and (ii) without being subject to the time bars at Sub-Clause 21.4.1 (a). Broadly, these situations are non-payment of a Payment Certificate, non-payment of financing charges, and termination.

It is worth noting that, as in the original 2017 edition, a Dispute is not required for dispute avoidance.

It is very likely that the amendments in the 2022 reprints will cause the Engineer’s workload to increase as more formal determinations are required. It will also curtail the DAAB’s power to award provisional relief (under Procedural Rule 5.1 (j)) promptly, because an Engineer’s determination and NOD would first be required.

To continue reading this analysis please click on the link below for the full version.

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