Kluwer Construction Blog

Those of you involved in cross-border sale of goods will probably know that a new version of Incoterms takes effect on 1 January 2011. Incoterms (or international commerce terms) are a series of international sales terms published by International Chamber of Commerce and widely used in international commercial transactions.

There are some significant differences between Incoterms 2000 and the new Incoterms 2010. Some of the changes will need to be incorporated into new sale of goods contracts entered into before 1 January 2011; other changes simply need to be understood and considered when preparing contracts effective on or after 1 January 2011.

 What needs to be done before 1 January 2010 [...]

In Part 1 of this two part subcontracting series, we detailed some tips and traps with respect to subcontracting, and considered the criticality of successful subcontractor performance to the timely and on budget delivery of projects. In Part 2 below, we examine the risks of pro-forma subcontracts and back-to-back drafting and briefly touch on the benefits of bespoke drafted subcontracts.
Now, we appreciate that a lawyer’s innate desire to dot every ‘i’ and cross every ‘t’ does not always resonate with commercial teams keen to deliver a project, and we are mindful that there are times when it is appropriate to put the weighty law books aside and just get on with it. Subcontract drafting is [...]

Since Adam Smith first set his mind to the efficiency of the pin factory in 1776, specialisation and division of labour has underpinned industrial development. The construction industry has embraced specialisation and division of labour to such a degree that almost every construction project, no matter how large or small, is delivered in practice by a large number of separate parties, each with a narrow field of expertise and each with a commercial and practical imperative to maximise the efficiency within their field of expertise.

We are, of course, speaking of subcontractors. Whether through management contracting or more traditional procurement, subcontractors continue to play a major rol [...]

The United Nations Commission on International Trade Law (UNCITRAL) Arbitration Rules were adopted in 1976, and have been both broadly used and widely praised as simple and straightforward. Remarkably, in 34 years they have not been revised – until now. Revisions were finally approved this summer, and arbitration agreements concluded after August 15, 2010 and referring to the UNCITRAL Rules are presumed to refer to these revised rules, unless the parties otherwise agree. Given the length of time since they were first introduced, significant revisions might have been expected. But in testament to their basic soundness, many of the revisions are little more than tweaks.

The revisions se [...]

“Thus the future American Business will require the highest degree of sensitivity to the political framework in which it functions and to the great coming changes in the World political process.” KISSINGER, Henry A. (1977). Speech before the Future of Business Project of the Center for Strategic and International Studies. Georgetown, Virginia, Washington, D.C.

“First, it is clear that managers consider political instability and/or political risk, typically quite loosely defined, to be an important factor in the foreign investment decision. Second, It is just as clear that rigorous and systematic assessment and evaluation of the political environment is exceptional. Most political a [...]

The UAE construction sector is a continually developing market with complex transactions becoming increasingly prevalent. The evolution of the construction sector has highlighted the need for more robust construction contracts that deal with all the relevant risk issues for a project.

Presently, many companies in the UAE rely heavily on the use of standard form construction contracts (“SFCCs”) as a basis for their contractual obligations, as opposed to using bespoke construction contracts drafted for each project.

There are various types of SFCCs which have been developed by different entities in different regions. Some examples of SFCCs include the Fédération International des Ingé [...]

A large part of the administration of a construction contract comprises a contractor seeking genuine contractual entitlements for additional time and costs and the determination and award or rejection of those claimed entitlements by the engineer/employer. As a result, contractor’s claims for extensions of time and additional costs are also often the subject of arbitral proceedings and litigation.

Under both the contractual process and subsequent formal dispute resolution proceedings, contemporary records form a critical part of the evidence to be utilised in evaluating the contractual entitlement. The importance of good record keeping – by both contractors and employer’s agents or enginee [...]

The World Bank and IFC have recently reported that Russia’s current energy inefficiency is equal to the annual primary energy consumption of France. Indeed, the low local cost of energy, a mainly declarative legislation on environmental efficiency and little public interest have long kept Russia out of the global warming debate, and far away from the exotic issue of green buildings.

This trend is hopefully coming to an end with the recent enactment of a new law with compulsory requirements on energy saving and efficiency. This marks a clear ambition by Russian policymakers and will probably enhance the nascent interest in green buildings of the main players in the real estate industry, who [...]

On Monday, April 19, 2010, a federal judge in the Eastern District of Virginia handed down “the longest-ever prison sentence” for a Foreign Corrupt Practices Act (FCPA) violation. Charles Jumet was sentenced to 87 months in prison for conspiring to violate the FCPA and for making false statements to federal agents. Jumet, a vice president of Ports Engineering Consultants Corp. (PECC), pled guilty to paying over $200,000 in bribes to high-ranking Panamanian government officials between 1997 and 2003 in exchange for maritime contracts to maintain lighthouses and buoys along Panama’s waterways. (PECC’s president, John Warwick, also has pled guilty to the same conduct and is scheduled to [...]

I am a contractor working on a wastewater project in Eastern Europe, using the FIDIC Yellow Book –Design & Build. Vol.3 of our contract contains the following clause:

“Tests on Completion

The first 30 days shall be a monitoring period during which the Contractor sets up the operation of the plant and conducts his own water quality tests to confirm that the final effluent consent has been met. At the end of this period the Contractor shall notify the Engineer that the plant is complete and meeting the Process Guarantee which then shall be met by a further 30 consecutive days before Taking Over can take place.”

We have met the final 30 consec [...]