Construction updates

International

Updated FIDIC contracts 2017 – what has changed?
  • International
  • 14 May 2018

The International Federation of Consulting Engineers (FIDIC) Contracts Committee recently unveiled the much-anticipated new suite of rainbow contracts, with the publication of amended Red, Yellow and Silver Books. The changes reflect only some of the key amendments introduced by the revised 2017 FIDIC contracts. Nevertheless, the changes are significant and it will undoubtedly take time for contracting parties to become familiar with the revised contracts.


Ireland

Managing sectoral employment orders
  • Ireland
  • 07 May 2018

The Supreme Court recently found the well-established regime of registered employment agreements to be unconstitutional. Uncertainty regarding the level of protection for wages and benefits of workers in the construction sector followed this decision, but has now been addressed by the Sectoral Employment Order (Construction Sector) 2017 and the Sectoral Employment Order (Mechanical Engineering Building Services Contracting Sector) 2018.


Malaysia

Federal Court rules that CIPAA is prospective
SKRINE
  • Malaysia
  • 11 November 2019

The Federal Court recently delivered a landmark ruling in which it clarified points of law on the retrospective application of the Construction Industry Payment and Adjudication Act 2012 (CIPAA) and the application of Section 35 of the CIPAA, which governs the validity of pay-when-paid clauses in construction contracts. The court's decision that the CIPAA has no retrospective effect is far reaching.

2018 developments in statutory adjudication
  • Malaysia
  • 09 September 2019

In 2018 Malaysia saw considerable developments in case law on statutory adjudication. Stakeholders' use of this form of dispute resolution mechanism continues to grow exponentially with no sign of abating. This article examines some of the significant decisions that the Malaysian courts handed down in 2018 and their impact on statutory adjudication under the Construction Industry Payment and Adjudication Act.

Developments in statutory adjudication in 2017
  • Malaysia
  • 21 May 2018

Malaysia witnessed considerable developments in statutory adjudication case law in 2017, probably due to the increasing use of this form of dispute resolution mechanism by stakeholders in the construction industry. This update examines some of the significant decisions that were handed down by the Malaysian courts in 2017 and their impact on statutory adjudication under the Construction Industry Payment and Adjudication Act.

Statutory adjudication: pay-when-paid clauses remain valid
  • Malaysia
  • 19 March 2018

The Court of Appeal recently considered whether a pay-when-paid clause in a construction contract is void under the Construction Industry Payment and Adjudication Act. It found that pay-when-paid clauses under a construction contract drawn up before the enactment of the Construction Industry Payment and Adjudication Act will remain valid and not be affected by the introduction of Section 35, which prohibits any conditional payment clauses in construction contracts.

Federal Court decision changes adjudication practice in Malaysia
  • Malaysia
  • 18 December 2017

The Federal Court recently dealt with three broad issues under the Construction Industry Payment and Adjudication Act – namely, jurisdictional challenge, the exclusion of defences and the setting aside and staying of decisions. The decision has broad repercussions for the way that adjudications are conducted in Malaysia.


Switzerland

Contributed by LALIVE
Model for dealing with geotechnical uncertainty: FIDIC Emerald Book for underground works
  • Switzerland
  • 29 July 2019

The 2019 Conditions of Contract for Underground Works (Emerald Book) is a new standard form specifically for underground works that is the result of a lengthy collaboration between the International Federation of Consulting Engineers and the International Tunnelling and Underground Space Association. The Emerald Book contains several features aimed at addressing geotechnical uncertainty, including geotechnical baseline reports and mechanisms to adjust the time for completion and contract price.

Swiss innovations in construction arbitration
  • Switzerland
  • 01 April 2019

New Swiss arbitration rules that are intended specifically for construction disputes contain several notable changes that may foreshadow the evolution of international construction arbitration procedures. Some or all of these innovations, which are aimed at improving efficiency and facilitating settlements, may prove to find widespread adoption among parties negotiating international construction contracts and arbitral institutions revising their rules.

Employer termination of a construction contract
  • Switzerland
  • 05 November 2018

Terminating a construction contract is the last resort for employers frustrated by delays, defects or other problems. Three recent Supreme Court cases illustrate some of the pitfalls of termination for employers. In all three cases, the employers' attempt to terminate for cause was construed as termination for convenience, exposing the employers to significant liability towards the contractors, including for lost profits.

Contractors beware: clauses requiring employer pre-approval of additional work costs
  • Switzerland
  • 10 September 2018

Clauses that require a contractor to obtain the employer's pre-approval of the cost of any additional works are increasingly common in lump-sum construction contracts. According to a recent Federal Supreme Court decision, these pre-approval clauses will be applied strictly, subject to certain exceptions. In its decision, the court enforced such a clause to deny a contractor's claim to recover the cost of additional works performed by a subcontractor.

Contractors' obligation of diligence and duty to inform persist even after termination
  • Switzerland
  • 02 July 2018

A recent decision by the Swiss Federal Supreme Court ruled that a contractor's duty of loyalty continues even after termination by the employer. When the contractor stops its works for any reason, it has the duty to take all necessary measures to prevent any harm to the employer and must provide to the employer all relevant information about the works.


USA

Contributed by Kilpatrick Townsend & Stockton LLP
Blockchain and smart contracts could solve unsolvable construction problem
  • USA
  • 09 September 2019

Every construction project, from contract negotiation through to the payment of the final pay application, involves the issue of the exchange of lien waivers for payment. In particular, the issue is that parties lower in the construction chain must provide unconditional lien waivers as part of their request to be paid. There are a number of imperfect solutions to this problem, including a conditional release. However, blockchain and smart contracts could be the perfect solution.

Timing is everything: how early retention of expert consultants can make or break construction claims
  • USA
  • 15 July 2019

Resolving construction disputes often involves unravelling complex issues and requires the analyses and opinions of expert witnesses in various industries relating to the project. Therefore, retaining an expert consultant as soon as litigation is imminent can be the difference between a party's pursuit or defence of construction litigation claims. To best utilise the leverage and advantages that non-testifying consultants offer, parties should retain legal counsel who are aware of the role that timing plays in expert retention.

Floating on assumption: navigating construction project float ownership
  • USA
  • 07 January 2019

Construction project schedules often generate disputes between project owners and contractors. These disputes commonly become the subject of claims that assign fault for delayed project completion to one party or another. When delays occur and float is available, each party may assume entitlement to the float on the project schedule and subsequent exemption from liability for damages relating to its delay; however, merely assuming float ownership can lead to unfavourable outcomes.

Is my bid binding?
  • USA
  • 13 August 2018

If a trade contractor submits a bid that a general contractor relies on to win a contract, questions may arise as to whether that bid is a contract and whether it is binding. Even if the bid does not meet the elements of a contract, it can still be binding. The courts apply the doctrine of promissory estoppel to hold parties to their bids in the absence of a contract. Differences in jurisdiction and in the facts of each case may affect the outcome, but when a bid is submitted it should be assumed to be binding.

It's just dirt, or is it? What you don't know on an excavation site can hurt you, or at least cost you money
  • USA
  • 16 July 2018

Underground utilities and pipelines pose potential problems for excavators and other contractors performing work below ground. Whether a business involves the construction of buildings primarily above ground or running pipes or cables below, there are issues to consider where a construction involves excavations. Ultimately, excavators must use care to avoid damaging marked lines and take all reasonable steps to protect underground facilities, pipelines and on-site people from harm.