Kluwer Construction Blog

Whilst interest in the recent UK judgment in the case of City Inn v Shepherd Construction may be confined to these shores, it is sufficiently important in the UK construction arena to warrant a mention on this Blog. The level of interest generated by this case initially may seem disproportionate to the complexity of issues and the amounts of money at stake. But ever since the option to adjudicate became compulsory for all UK based “construction contracts” in 1996 (Under the Housing Grants, Construction & Regeneration Act – see opsi), there has been a distinct lack of relevant construction UK case law on matters such as causation and delay – as parties choose the quicker, cheap [...]

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.

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 [...]

Question:
I am a project manager for the employer on a power plant project based in Europe. We have been on quite good terms with the contractor up until now. Last week the contractor sent us a claim for 12 weeks’ delay to the programme and for compensation costs (we are using the FIDIC Yellow Book (Plant and Design Build) 1999 form and English governing law). They are saying that dealing with contamination in the ground discovered in the last few weeks will cause a delay. We had a couple of site meetings with the contractor and sub-contractor about the programme and the potential delays, prior to the contractor sending the claim. I have two issues with the claim: firstly, we do not believe [...]

The U.S momentum to build “green” is rapidly gaining popularity, with the office market currently leading the way toward more sustainable structures. The construction industry, including the publishers of form construction contracts, is scrambling to keep up. ConsensusDOCS, a relatively new group of industry organizations that is promoting a family of contract forms that have been released in a steady stream since 2007, has now provided a document for contractually assigning the parties’ respective liabilities when entering into contracts for a green building.

The leading set of green building standards and certification process used in the U.S. to date is the LEED certification proc [...]

In the wake of the current downturn, employers will increasingly look for greater budget certainty under EPC or Turnkey contracts. This is where the contractor undertakes all tasks – design, construction, management etc – so that, upon completion, the employer merely needs to ‘turn the key’ and operation of the plant or building can begin immediately. The whole point is that the contractor assumes price risk in return for relative autonomy over how he delivers the project – provided of course he meets the employer’s output requirements. But often employers want not just price certainty but also to retain control over design approval and how the project is actually delivered. This can [...]

Recent examples illustrate clearly that cancelling a project can be very expensive. The City of Ottawa recently paid over C$36 million to settle claims from contractors arising from the cancellation of a light rail transit project. In Montréal, the termination of a contract to build an incinerator has resulted in years of costly litigation and a large court award against the municipal defendants (which they have appealed).

Particularly in the face of current economic conditions, project owners are well-advised to include appropriate provisions in their project contracts giving them the right to terminate without cause. Although “termination for convenience” clauses are not uncommon i [...]

It’s official: the swine flu virus is now a ‘pandemic’ according to the World Health Organisation. The illness is of particular concern to the international construction sector, especially in countries where labourers live in communal accommodation. Rapid spreading of swine flu could potentially bring the sector to a standstill, causing significant delays, costs and lost profits.

So, how can Employers and Contractors prepare for a potential outbreak? To give you a flavour of the potential impact, a recent article in the National described the efforts of ETA Ascon Star (one of UAE’s oldest construction companies with a workforce of over 70,000 in 24 camps) to try to minimise the risk of sprea [...]