New decade, new development of the remoteness rule
In this, the second of my New Year updates, I would like to discuss two interesting cases which have recently been decided by the UK courts. The first is the UK Court of Appeal upholding of a first instance judgment and the comments that the Court made on the recoverability of damages under English contract law.
The case is Supershield Limited v Siemens Building Technologies FE Ltd. As a reminder, the basic test under English law is that a party will recover losses flowing from the breach that (i) arise naturally, in the usual course of things, or (ii) are losses which the parties may reasonably be taken to have contemplated when entering into the contract (the “Hadley v. Baxen [...]
U.S. Crackdown is Raising the Price of Corruption
The principal weapon of the U.S. government to combat corruption in international business dealings is the Foreign Corrupt Practices Act (FCPA). To say that the U.S. is now aggressively pursuing FCPA cases is an understatement. In the past year, we have seen billions of dollars of fines, sting operations, and the pursuit of individuals around the world. Here are some of the latest FCPA headlines:
Hefty penalties are the order of the day – In the past year, companies have settled with regulators to the tune of billions of dollars in penalties, fines and disgorgement.
• Halliburton/KBR paid $600 million;
• Siemens paid $1.6 billion;
• BAE paid $450 million; and
• [...]
“Clause pénale” v. liquidated damages – any similarities?
- By Joanne Clarke,
for Salans
Delays are of course a common problem in construction projects. French law (like English law) allows for a pre-estimation of damages for delay. However, the common law and the civil law approaches to such pre-estimation appear to differ, as pan-European construction professionals may have encountered.
English lawyers turn towards liquidated damages for delay. These involve the pre-determination, at the time the contract is entered into, of the loss which a delay would cause. However, these ascertained damages must be based on a genuine estimate of the likely loss and not amount to a penalty.
French lawyers rely upon “clauses pénales”, which also involve a pre-determined [...]
New Tort Law Firms up Liability for Tofu Buildings
On 26 December 2009, the PRC Tort Liability Law (the “Tort Law”) was promulgated following a seven-year period of discussions and debate. The law will enter into effect on 1 July 2010.
The Tort Law marks a milestone in PRC legislative history, and will have myriad implications for diverse areas of private and commercial activity.
As a construction lawyer, I am particularly interested in Article 86 of the Tort Law concerning liability for loss and damage caused by collapse of construction works.
Although the Tort Law has been in planning for some time, it seems to have been influenced by some very recent events. Much attention has been focused on the recent milk scandals as a c [...]
The Procurement Process in Canada after the Supreme Court of Canada Tercon Decision*
*Guest Post by Michael E. Mitchell, McCarthy Tétrault LLP
The tendering and procurement process in Canada has traditionally been treated by the courts as a special area of contract law in which fairness and protecting the integrity of the tender process have been guiding principles. Courts have implied terms into contract “A” bid contracts that have obliged owners to act fairly, and wide discretionary clauses have been interpreted narrowly to ensure the integrity of the tendering process.
Owners looking to maximize their control over the selection of contractors have continued to fine-tune instructions to bidders and attempt to limit their own liability. How far will the courts go [...]
When a ‘notice’ need not be ‘noticed’
Opening the mailbox at my Hong Kong apartment block brings the usual array of bills, more bills, flyers and…what appear to be ‘notices’ (usually from my landlord): but as we know from the world of construction law, often it is argued that what is intended to be a ‘notice’ fails to meet up to the strict requirements of the contract.
Yet, how many reported cases are there where the notice provision is strictly enforced? Most commentators struggle to point to a decision where a contractor was deprived of his ability to claim an extension of time solely on the basis of non-compliance with a notice provision. The point sometimes seems more of academic interest than practical applicatio [...]
A new year brings fresh thinking from FIDIC and new developments…
I thought that I would hail in the new year with an update on some interesting construction developments. Put it down to a period of reflection over the Christmas break! As I want to cover a number of areas, I have split this update into 2 postings.
In this first update, I am going to cover the latest FIDIC news and the new Bribery Bill currently going through the UK parliament. In my next posting I will look at two recent construction cases in English law, the first covering recoverability of damages and the English “remoteness” rule, the second covering treatment of contractual notice bars for claims.
Firstly, on FIDIC. I presented at the annual FIDIC conference in London in Dec [...]
Let’s talk about it: is mediation a viable option in Dubai?
Mediation has become established in the West as a useful alternative to more confrontational and adversarial forms of dispute resolution. Here in Dubai it is uncommon, but in our experience the number of disputes is on the increase, so could it, or should it, have a role to play?
Mediation is an alternative dispute resolution procedure that allows parties with a dispute to engage a neutral third party to facilitate communication between the parties, with the aim of resolving the dispute. As it is a voluntary and consensual process, parties must agree to mediate and are free to withdraw at anytime. Mediation is also non-binding and it may well not lead to a resolution of the d [...]
Debt Recovery in the UAE
We are all still feeling the impact the global downturn is having on the construction sector in the UAE. Not only is it a challenge to find work in this market, increasing numbers of contractors and consultants are finding it difficult to recover payment for work they have already undertaken.
In the past many companies working in the region have been wary of pursuing their entitlements through formal dispute resolution processes, due to perceived cultural sensitivities, many now feel that they have no choice but to consider the available debt recovery options.
In many instances, the amounts owed are not disputed. However, in the current market some developers/contractors consid [...]
Is your Arbitrator too busy?
In the autumn of this year I had the dubious pleasure of celebrating the 10th Anniversary of the publication of the Terms of Reference in an administered arbitration, which is still lumbering towards its own uncertain conclusion. At the time of our appointment as lawyers for one of the parties, which was shortly after the issue of the Terms of Reference, I toyed with the idea of proposing to my client a fixed fee for taking the case to conclusion. It seemed to me that this was quite a “cutting edge” concept at the time and I thought to myself that whilst the risk of such a course of action taken at the outset of hostilities could be very high, I mused that following close of pleadings and th [...]
