Tag:Yellow Book

In Site – Spring 2018 Edition
New FIDIC Yellow Book 2017: Major Changes
FIDIC Update: The Employer’s Claim to Liquidated Damages and Performance Security under the Yellow Book

In Site – Spring 2018 Edition

By Kevin Greene, Inga K. Hall, Nicola J. Ellis, Camilla de Moraes, and Sarah A. Drinkwater

Welcome to the Spring edition of “In Site”. This edition provides an update on the new 2017 FIDIC suite of contracts as well as brief case notes on recent interesting and important cases dealing with:

  • Entitlement to an extension of time in circumstances of concurrent delay (in North Midland Building Ltd v Cyden Homes Ltd);
  • Payment notices and pay less notices (in Grove Developments Ltd v S&T (UK) Ltd);
  • Payment for pre-construction services (in Almacantar (Centre Point) Limited v Sir Robert McAlpine Limited);
  • Limitation of liability (in Royal Devon and Exeter NHS Foundation Trust v ATOS IT Services UK Limited); and
  • Termination provisions (in Interserve Construction Ltd v Hitachi Zosen Inova AG).

To view the full Spring 2018 Edition of In Site on K&L Gates HUB, click here.

New FIDIC Yellow Book 2017: Major Changes

By Matthew E. Smith, Inga K. Hall, and Sarah A. Drinkwater, K&L Gates, London


FIDIC has long been renowned for its flexible suite of standard forms of contract for use on international construction and engineering projects. FIDIC is the “contract of choice” for international infrastructure and process plant projects, particularly in Eastern Europe, Africa, the Middle East, and Asia.

Two of the key strengths, or attractions, of the FIDIC suite of contracts are, firstly, that they are capable of use across a diverse range of legal systems and, secondly, that they have been pro-actively updated and added to over time to respond to the needs of the industry.

By way of background to this last point, FIDIC produced a core ‘Rainbow Suite’ of 4 contracts in 1999: the Red Book (for Building and Engineering Works), the Yellow Book (Plant and Design-Build), the Silver Book (EPC/Turnkey Projects) and the Green Book (short form contract). Additional forms have subsequently been added to the Rainbow Suite, including the White Book consultant’s appointment in 2006 and the Design-Build-Operate Gold Book form in 2008. In early 2016, FIDIC formed a working group to focus on updating its existing suite of contracts and to add entirely new forms of contract (including sector-specific tunnelling and renewables forms); with intentions to release such new and updated contracts over the course of the next two years.

Following the FIDIC International Contract User’s Conference in December 2016, at which K&L Gates partners, Matthew Smith, Kirk Durrant and Rafal Morek, spoke on trends in amending FIDIC contracts, attendees were able to obtain a copy of the much anticipated “special pre-release version” of the 2nd Edition of the Yellow Book (2017) and the 5th Edition of the White Book (2017).

This Alert provides a high-level overview of the changes which will be made to the Yellow Book, its first update in over 15 years. The 2017 Yellow Book 2nd edition changes are likely to have wide-reaching impact as the Yellow Book remains the most commonly used contract in the Rainbow Suite. Some of these provisions reflect innovations introduced in the Gold Book 2008 which are now being integrated into the new versions of the ‘1999 suite’ (Red, Yellow and Silver) but many other changes are completely new.

One thing that is clear is that the changes are very extensive indeed, both in terms of length and effect, and whether you are an Employer or Contractor or an Engineer or another consultant, it is essential that you are fully aware of these changes when the final versions of the new contracts are issued this year.

In due course we will be releasing more detailed commentaries on the ‘new’ Yellow Book and the other forms which are due for release this year as well as conducting workshops on the use of the new forms. If you are not already on our mailing list and wish to be informed of these, please contact Matthew Smith (matthew.smith@klgates.com) or Rich Paciaroni (richard.paciaroni@klgates.com).

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FIDIC Update: The Employer’s Claim to Liquidated Damages and Performance Security under the Yellow Book

By Camilla de Moraes, K&L Gates, London

The English courts have recently considered a number of cases involving the FIDIC suite of contracts (see here, here, and here for our previous blog posts).  The most recent case of J Murphy & Sons Ltd v Beckton Energy Ltd [2016] EWHC 607 (TCC)arises out of a contract based on FIDIC Conditions of Contract for Plant and Design Build for Electrical and Mechanical Plant and for Building and Engineering Works designed by the Contractor First Edition 1999 (FIDIC Yellow Book) with amendments.

The court was required to consider the relationship between two clauses in the Contract, namely Sub-Clause 2.5 (Employer’s Claims) and Sub-Clause 8.7 (Delay Damages and Bonus) with reference also to Sub-Clause 3.5 (Determinations) and 4.2 (Performance Security).  The issue in dispute was whether determination by the Engineer of the contractor’s liability for liquidated damages was a pre-requisite to recovery of liquidated damages by the Employer.  The court held that the clause entitling the Employer to liquidated damages operated outside of the regime in Sub-Clause 2.5 and therefore the Engineer’s determination was not a pre-requisite to the Employer’s entitlement.  This case also confirms the traditionally held view that obtaining injunctive relief preventing a beneficiary from calling on a performance bond will rarely be possible.

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