Although Australian construction contracts quite commonly provide for design life warranties in respect of plant, equipment, building or structures, the concept of a ‘design life warranty’ has not been the subject of extensive commentary by the Australian legal profession or interpretation by the courts in Australia.
Sydney Partner Sandra Steele was recently named as Construction and Infrastructure Partner of the Year at the inaugural 2016 Lawyers Weekly Partner of the Year Awards. Sandra has more than 20 years’ experience advising on contentious and non-contentious construction law matters. She has extensive experience in contract drafting and negotiation as well as litigation and alternative dispute resolution in the project management, construction, engineering and infrastructure project sectors. Sandra’s civic activities include serving as the National President for the National Association of Women in Construction, a member of the Australian Legislation Reform Committee for the Society of Construction Law, the Law Society of New South Wales, and the Resolution Institute and is on the editorial panel of the Australian Construction Bulletin.
Please join us in congratulating Sandra on this well-deserved accolade!
The Lawyers Weekly Partner of the Year Awards recognize outstanding performance by partners in law firms across 21 practice area-based categories. The finalists represent the leading partners in their field and were selected by Lawyers Weekly from an overwhelming number of nominations. Twenty-two high-profile judges took on the task of choosing the winners.
It seems hard to believe but come 30 January 2016, the Personal Property Securities Act 2009 (Cth) (PPSA) and the register it established will have been operating for 4 years. The PPSA has introduced far reaching conceptual and practical changes to Australian law. If you are part of the construction industry, to protect your rights, you need to ensure that any registerable interests are registered on the Personal Property Securities Register (PPSR).
K&L Gates and Marsh recently co-sponsored a one-day, complimentary seminar titled “EPC Contracting Issues in the Oil & Gas Industry.”
The seminar featured six hour-long sessions, including a luncheon presentation by Robert Peterson, senior partner at Oliver Wyman, and an industry roundtable review panel consisting of industry experts from Exxon Mobil, Phillips 66, Chicago Bridge & Iron Company, Fluor, and Aker Solutions.
More than 100 representatives from leading energy companies attended the seminar at the JW Marriott Houston Downtown.
Houston partners Randel Young and John Sullivan III, Pittsburgh partners Richard Paciaroni and Jason Richey, London partner Matthew Smith, Washington, D.C. partner Steven Sparling, and Dallas partner Beth Petronio, along with Pittsburgh associate Jackie Celender, presented during the seminar.
Seminar materials can be found here.
By Sandra Steele, K&L Gates, Sydney
The AS 4000 and AS 2124 General Conditions of Contract are widely used forms of procurement in the Australian construction industry. A technical committee has recently drafted a new standard form contract (AS 11000) to supersede these previous forms.
The drafters have sought to provide a balanced approach to risk allocation and have updated the standards for certain legislative changes and case law including for GST and security of payment legislation. Despite the extensive amendments, as the AS 11000 is drafted as a national standard form contract, some State and Territory specific legislation and case law has not been included.
A recent Victorian Supreme Court case has clarified the impact of Commonwealth insolvency set-off provisions on State-based security of payments legislation.
The case demonstrates that although a principal is generally precluded from relying on a set-off or counterclaim in certain contexts under the Building and Construction Industry Security of Payment Act 2002 (Vic) (BCISP Act), this does not apply if the claimant is in liquidation, due to the operation of section 553C of the Corporations Act 2001 (Cth) (Corporations Act).
The case also provides useful commentary on what is considered a ‘payment schedule’ for the purposes of the BCISP Act.
If you would like to read more about this case, please click here.
 Façade Treatment Engineering Limited v Brookfield Multiplex Construction Pty Ltd  VSC 41.
London partner Matthew Smith recently attended the International Railway Summit 2015 in Barcelona. The International Railway Summit provides a meeting ground for senior decision makers from the world’s key rail operators, transport ministries and solution providers. Matthew had the opportunity to discuss the importance of risk assessment, project delivery structure, and risk allocation in rail contracts as a presenter at the conference.
To view a copy of the full presentation titled “Procurement Strategies for Major Rail Projects,” please click here.
Welcome to the 28th edition of Arbitration World, a publication from K&L Gates’ International Arbitration Group that highlights significant developments and issues in international and domestic arbitration for executives and in-house counsel with responsibility for dispute resolution.
To view Arbitration World, click here.
To download a printable PDF of the publication, open the link above and click on the fourth icon from the right in the magazine toolbar at the top of the page
In this edition, we summarise the key provisions of the new LCIA Rules, which came into effect on 1 October 2014, including provisions as to emergency relief and consolidation of arbitrations. We explore some of the issues related to “mediation/arbitration” or “med/arb” as an alternative approach to dispute resolution, and we continue our series on the growth of third-party funding in international arbitration. We include an article about a French court decision with important implications for parties in arbitration who face impecunious respondents or counterclaimants. We examine recent caselaw from Singapore on a gap in the dispute resolution procedures within the FIDIC Conditions of Contract. In a continuation of our series on tiered arbitration clauses, we look at recent developments in England. We analyse an ongoing debate in Australia about the use of investor-state dispute resolution clauses in bilateral investment treaties and look at a recent case in Australia regarding the courts’ approach to the question of when third parties can be bound by an arbitration agreement.
We also provide our usual update on developments from around the globe in international arbitration and investment treaty arbitration.
By Ryan D. DeMotte, K&L Gates, Pittsburgh
Mother Nature can often be an unwelcome intruder on a construction project. Heavy rains, snow, ice, wind, extreme cold, extreme heat; there are any number of weather events that can delay a project. While parties to a construction contract cannot control the weather, they can and should anticipate the possibility of adverse weather and address it in their contracts. Prudent contract provisions addressing bad weather events can help owners and contractors minimize the disputes that can develop when rain, snow, ice, and other weather events delay the project.
A common approach is to give contractors additional time but not costs for weather delays. Many commonly-used contract forms provide for weather-based time extensions if the weather event was “abnormal, “unforeseeable,” or “not reasonably anticipated.” Thus, in order to evaluate a request for a time extension based on adverse weather, the parties must first establish the appropriate weather baseline against which to measure the weather event at issue. Was the rainfall unusually heavy during a particular month? Was the temperature colder than previous years? If the contract itself does not define the baseline weather measurement, this can often be a point of dispute between parties. Some parties may try to minimize these disputes by providing detailed provisions for baseline weather measurements in the contract in the form of 10-year averages or other objective measures. Whether or not these types of provisions are useful depends on the project and its sensitivity to weather variations.
The parties must also determine how the weather caused the delay. Did cold temperatures delay paving work? Did heavy winds or sandstorms prevent the delivery and installation of sensitive equipment? In trying to answer these types of questions, the parties may dispute whether the delays were the result of the abnormal weather or the result of other causes.
Finally, owners and contractors need to consider why certain work was being performed during the adverse weather. For example, if, through a contractor’s own early delays it is still working outdoors at a time when it initially planned to be completing the interior of a building, an owner may be able to argue that the contractor is not entitled to an extension for any weather-related delays to its outdoor work. Conversely, if a contractor’s work is delayed by the owner’s delays, it may have a strong argument for any delays it incurs as it tries to complete the work in less-than-optimal weather conditions. A contractor may also be able to claim costs if it is pushed by owner delays into bad weather.
Given the inherent uncertainty of the weather, some parties decide to build into the contract and project schedule a certain number of extra days to absorb any weather delays.
As the above issues demonstrate, owners and contractors should give careful thought to the various types of weather risks their project may face when negotiating a construction contract and creating the project schedule.
The amendments to the Building and Construction Industry Payments Act 2004 (Qld) (BCIPA) came into force yesterday. Last minute further amendments to the BCIPA were passed on 26 November 2014, relating to the transitional provisions of the amending Act. Existing contracts are now subject to the new recovery of progress payments procedures, subject to a few exceptions. Industry participants will need to be aware of these recent amendments, particularly coming into the Christmas and New Year holiday shut down period, as the timing of all payment claims, payment schedules and adjudications will be impacted.
To read the full alert, click here.