CLAUSE 2 - Engineer and Engineer's Representative

This clause sets out the powers and obligations of the Engineer and his team. The Engineer will carry out
his duties and exercise the authority given to him by the contract but is to obtain the prior approval of the
Employer before exercising his authority in relation to the list of items in Part II. The Contractor does not
have to check that the necessary approval has been given. The Engineer has no general authority to
relieve the Contractor of any of his obligations.
The Engineer may appoint and delegate duties and/or authority to the Engineer's Representative.
Delegation to the Engineer's Representative must be in writing and must be copied to the Employer and
the Contractor before it takes effect. Instructions, etc given by the Engineer's Representative after powers
have been delegated will have the same effect as if given by the Engineer. However, the Engineer may
reject work despite the failure of the Engineer's Representative to do so. The Contractor may query any
action of the Engineer's Representative with the Engineer who may vary or overrule it.
The Engineer and his representative may appoint assistants and inform the Contractor of their duties and
authorities. The assistants may only give instructions necessarily within the scope of their duties and to
record their acceptance of work, material etc. Such instructions are treated as having been given by the
Engineer's Representative.
Instructions must be in writing unless the Engineer finds it necessary to give an instruction orally. Such an
oral instruction will only be treated as an instruction if either the Engineer confirms it in writing or the
Contractor confirms it in writing within 7 days and the Engineer does not object within a further 7 days.
The Engineer must act impartially in exercising his discretion. His decisions may be reviewed by an
arbitrator.
This clause has been substantially re-cast and reorganised. Sub-clauses 2.4 and 2.6 are wholly new to
the 4th Edition.

2.1 - Engineer's Duties and Authority

It is a novel feature of the 4th Edition that the Employer is unable to replace the Engineer should he die or
for any other reason cease to carry out his duties. For a discussion of this, see the commentary to clause
1.1(a)(iv).
(a) As the Engineer is not a party to the contract, this clause must impose upon the Employer an
obligation to ensure that the Engineer duly performs. Under English law, this duty is taken to be to ensure
that the Engineer certifies where the contract requires a certificate or makes decisions where the contract
gives the Engineer a choice whether to act or not. The Employer is not held responsible for the contents
of the decision i.e. he has no obligation to ensure that the Engineer acts correctly. He must, however,
ensure that the Engineer is free to act fairly and correctly. Thus there will not be a breach of contract on
the part of the Employer on every occasion where an arbitrator reverses a decision of the Engineer. For a
discussion of one practical consequence of this, see the commentary under clause 63.1 concerning the
consequences if an Employer terminates on the strength of a certificate of default by the Contractor given
by the Engineer where that certificate is found to be incorrect by an arbitrator.
The express requirement in sub-clause 2.6 that the Engineer act impartially adds to the Employer's duty
in relation to procuring proper certification. As the Engineer is not a party to the contract, the clause must
impose an obligation upon the Engineer's employer. It is therefore submitted that the Employer is given
the additional responsibility of ensuring that the Engineer is not only free to act impartially but that he
does so. A distinction has to be drawn between fairness or correctness and impartiality. Because so many
of the Engineer's decisions are discretionary, there is often no objectively correct decision. A decision will
ultimately be correct if it goes unchallenged or if an arbitrator does not feel it necessary to overturn that
decision. Impartiality is more concerned with the means by which the Engineer arrives at his decision. He
is obliged to approach the matter in an even-handed way, an obligation reinforced by the requirement for
due consultation. He must weigh in his mind the interests both of the Contractor and the Employer without
regard to the fact of engagement by the Employer and leaving out of account any pressure brought to
bear either by the Employer directly or by the potential consequences of a particular decision under his
terms of engagement. It is submitted that the Employer will be in breach of his obligation not only if he
endeavours to cause the Engineer to favour his interests over those of the Contractor but also if the

Engineer is obviously doing so and the Employer fails to take steps to remedy the position. Technically,
the Employer would also be in breach if he failed to take steps if the Engineer was favouring the
Contractor. Such a state of affairs would be very unlikely to last long and is equally unlikely to be the
subject of complaint by the Contractor.
The liability of a certifier such as the Engineer directly to the Contractor has been the subject of
consideration by the Courts over the years. The House of Lords in Sutcliffe v Thackrah (1974) AC 727
held that a certifying Architect did not have the sort of immunity against a disgruntled contractor that a
judge or arbitrator would enjoy. More recently, the Court of Appeal in Pacific Associates Inc v Baxter
(1989) 3 WLR 1150 held that the Engineer under a much-amended form of FIDIC did not owe a duty of
care to the contractor. Although that decision may have been influenced by the particular wording of the
contract under consideration, a Hong Kong court in Leon Engineering and Construction v Ka Duk
Investment Co. Ltd (1989) 47 BLR 139 came to the same conclusion on a standard form with no unusual
wording. In both cases, the court was influenced by the existence of an arbitration procedure, the purpose
of which was to enable the contractor to obtain redress in the event that the certifier made a mistake.
Leading cases relevant to the Employer's duty in relation to the Engineer include Perini Corporation v
Commonwealth of Australia (1969) 12 BLR 82 when the Supreme Court of New South Wales found
implied terms that the Employer must not interfere with the proper performance by the certifier of the
duties imposed upon him by the contract and that the Employer is bound to ensure that the certifier
performs those duties. The English Court of Appeal came to similar decisions in Croudace v Lambeth
(1986) 33 BLR 20 and Lubenham Fidelities v South Pembrokeshire District Council (1986) 33 BLR 39. In
the latter case, the Court of Appeal expressed the opinion that a certifier acting in bad faith would
probably make himself directly liable to the contractor. The Perini and Lubenham cases are also authority
for the view that the Employer does not warrant the correctness of the certifier's decisions.
(b) It is right for the Employer to make known to the Contractor from the outset any terms in the
Engineer's terms of engagement which could impact upon the Contractor. Thus, this clause provides for
disclosure in Part II of any prior approvals that the Engineer needs in order to act. This clause should not
however be treated as an encouragement for such obstacles to be placed in the Engineer's way. These
conditions do not encourage the requirement of prior approval as clause 69.1 (Default of Employer)
makes a refusal of such an approval in relation to a certificate, a ground for termination by the Contractor.
It is also sensible that the Contractor is not obliged to check that necessary approvals have been obtained
for any given action by the Engineer. If the Engineer acts without such prior approval, that will be a matter
between the Engineer and the Employer and may well amount to a breach of the Engineer's terms of
engagement.
It is an innovation of these conditions that the Engineer is obliged to consult with the Employer and the
Contractor under some 21 clauses: such consultation does not in any way relieve the Engineer of his
obligation to act impartially under clause 2.6 (Engineer to act impartially). Part II provides an optional
clause to deal with emergency situations allowing the Engineer to instruct without obtaining the prior
approval of the Employer. This clause is not, it is submitted, necessary and indeed runs counter to the
important principle that the Contractor need not concern himself with whether the Engineer has in fact
obtained approval. In this context, see clause 64.1 (Urgent remedial work).
A question raised by this approvals procedure is whether the absence of a requirement for approval may
be taken as evidence that the Engineer is authorised to act as agent for the Employer in all other
respects. The answer, it is submitted, is in the negative. The purpose of the inclusion in Part II of any
restraints upon the Engineer is by way of warning to the Contractor and is confined to limits upon "the
authority specified in or necessarily to be implied from the Contract". The lack of any general agency is
emphasised by item (c) of this sub-clause. So, for example, the Engineer would not have authority to
order acceleration by the Contractor other than in accordance with clause 46.1 (Rate of Progress).
Accordingly, the Contractor must be careful to ensure that any action by the Engineer is either within the
authority specified in or necessarily to be implied from the contract or expressly authorised by the
Employer.

This clause has been adapted by ICE 6th which has made the list of matters requiring approval
determinative of the matters in respect of which the Engineer must act impartially. Clause 2(8) of ICE 6th
requires the Engineer to act impartially in respect of all matters which are not so listed.
(c) As the Engineer is normally considered to have a dual function under the contract, to act as the
Employer's agent in certain respects as well as certifier, potential problems may always arise as to the
extent of the Engineer's authority as agent. For example, if the Engineer were to ask or order the
Contractor to accelerate other than in accordance with clause 46.1 (Rate of progress), the Contractor
would be unwise to comply with such order or request without checking with the Employer that the
Engineer was duly authorised to make such request on the Employer's behalf. Thus, in this clause, it is
made clear that the Engineer has no authority to waive any obligation of the Contractor. See also clause
7.3 (Responsibility unaffected by approval), clause 14.4 (Contractor not relieved of duties or
responsibilities), clause 17.1 (Setting-out) and clause 54.8 (Approval of materials not implied) for other
examples. See also clause 61.1 (Approval only by Defects Liability Certificate).
"Except as expressly stated in the Contract...". If the Engineer purports to waive strict compliance with the
letter of the specification, for example under clause 17.1 (Setting-out) or clause 49.2 (Completion of
outstanding work and remedying defects), the Contractor has to decide whether, by gratefully accepting
the offered short-cut, he remains exposed to a claim for breach of contract by the Employer, due to a lack
of authority in the Engineer. The question is, therefore, whether any express right to waive is granted.
Under clause 7.1 (Supplementary Drawings and Instructions) , the Engineer is given authority to issue
instructions as necessary for the "proper and adequate execution and completion of the Works". Whilst
the use of the word "adequate" may lend some support to an argument that an Engineer is intended to
have a discretion to approve works which do not comply strictly with the specification, it is doubtful that a
Contractor could demonstrate that any proposed short-cut was "necessary". The Contractor would, it is
submitted, require a variation to be certain that the acceptance of sub-standard work could not be
challenged later. The power to omit work is a clear example of an express exception: the Engineer is
empowered to vary the work to set a lower standard than that set out in the specification and it is
submitted that the Contractor may generally rely on such an instruction. See under clause 51.1
(Variations), however, for comment on the ability of the Employer to challenge variations. For further
discussion on this subject, see under clause 13.1 (Work to be in accordance with Contract). See also the
clauses dealing with the rectification of defects and damage such as clause 17.1 (Setting-out), clause
20.3 (Loss or damage due to Employer's risks) and clause 49.2 (Completion of outstanding work and
remedying defects).
Under English law, there is a distinction to be drawn between obligations and liabilities. There comes a
point in the degree of performance by the Contractor when he has sufficiently fulfilled the requirements of
the contract that the "obligation" is replaced, in the event that 100% compliance does not occur, with a
secondary "liability" to pay damages for the shortfall. It may therefore be argued by a Contractor accused
of breach of contract in respect of work approved by the Engineer that, in allowing a short-cut, the
Engineer was not relieving the Contractor of any obligation. It must be recognised that this is a lawyer's
point and one that would not necessarily find favour with arbitrators, even in England.
Under all the standard forms of construction contract, it is difficult to determine at what point the Engineer
or equivalent becomes "functus officio" or redundant. The answers may well be different for each of the
Engineer's roles. As the Employer's agent, his power to issue instructions ceases at the latest when the
Defects Liability Certificate is issued pursuant to clause 62.1 (Defect's liability certificate). It is argued in
the commentary under clause 13.1 (Work to be in accordance with the contract) that the Engineer's power
to order variations should come to an end at substantial completion.
As certifier, the Engineer's obligations continue through to the Final Certificate under clause 60.8 (Final
certificate) which may not be issued for three months after the Defects Liability Certificate.
As adjudicator, giving decisions under clause 67.1 (Engineer's decision), it seems that the Engineer has a
role for as long as disputes may arise under the contract. This could mean for as long as any applicable
law permits disputes to arise to the full extent of the relevant limitation periods. Thus, for example, a

defect arising in the works 5 years after completion could cause the Employer to seek to recover
damages for breach of contract from the Contractor. The Contractor could defend himself on the grounds
that the defect arose from an error in design and the dispute should, according to clause 67.1, be referred
to the Engineer for his decision. If the Engineer refuses to become involved, the mechanism of clause 67
allows the dispute to go forward to arbitration by default.
It is therefore submitted that there is no one moment in time at which the Engineer becomes functus but
three or more. Each function of the Engineer must be considered individually.

2.2 - Engineer's Representative

On many projects, particularly where the Employer is a government department, it is the Engineer's
Representative who is the real decision-maker and the effective Engineer under the project although he
will report to and obtain signatures from the Engineer named in the contract, who may be a Government
official or employee. The delegation must be in writing. Apart from clause 1.1 (Definitions), the Engineer's
Representative is referred to in only two other clauses: clause 13 (Work to be in accordance with
contract) whereby the Contractor is obliged to take instructions from the Engineer's Representative and
clause 15 (Contractor's superintendance) on the same subject. These references appear to be
superfluous as the Engineer's Representative has no power without delegated authority under clause 2.3
and power thus delegated is not dependent upon an express mention in the relevant clause.
It is implicit that the duty of impartiality under sub-clause 2.6 applies to the Engineer's Representative and
that the powers to open up decisions contained in clause 67 (Disputes) apply to his decisions. These
conclusions, it is submitted, follow from the nature of delegation: the actions of the Engineer's
Representative are treated as being the actions of the Engineer. See also the right to query the
Engineer's Representative's decisions under sub-clause 2.3.

2.3 - Engineer's Authority to Delegate

Normally, the Engineer retains powers to grant extensions of time, order acceleration, value variations
over a particular figure and issue certificates of default. He will also retain the power to make decisions
normally under clause 67.1 (Engineer's decision). Other items not usually delegated include the notice to
commence, substantial completion, the Defects Liability Certificate, clause 60 (Payment) and clause 65
(Special Risks). A Contractor may be well advised to require a list of non-delegable powers to be included
in Part II if he wishes to know that the crucial decisions will remain with the Engineer named in the tender.
FIDIC's Guide suggests that any restriction on delegation in the Engineer's terms of engagement should
be disclosed. It is submitted that the Contractor is not entitled to assume that authority has been
delegated as notice to the Contractor is essential before a delegation takes effect. Contractors are
therefore obliged to satisfy themselves on this point before acting on instructions from the Engineer's
Representative.
If the Engineer disagrees with a decision delegated to the Engineer's Representative, there is no power
under the contract for the Engineer to countermand the decision unless the decision is questioned by the
Contractor under item (b) of this sub-clause or either the Employer or Contractor requests a decision
under clause 67.1 in which case the matter may be reviewed. The Engineer may, however, disapprove
work etc which his representative did not disapprove. The draftsman is at pains not to use the term
"approve" in clause 2.3(a) and thereby raises the question of whether an approval or expression of
satisfaction by the Employer's Representative would disentitle the Engineer from instructing the
Contractor to rectify work.
In item (b), it is not clear to whom the word "he" refers i.e. whether it is the Contractor or the Engineer's
Representative who has the power to refer a decision of the Engineer's Representative to the Engineer
for reconsideration. This is unfortunate as it is only this sub-clause and clause 67 (Settlement of disputes)
which allow decisions to be altered, other perhaps than by variations or with the agreement of the
Contractor. The Engineer is obliged to respond but no time limit is given nor is such confirmation etc
within the terms of clause 1.5 (Notices, Consents etc) which prohibit unreasonable delay. As discussed in

clause 2.4 below, this could cause delay to the project for which there is no obvious category of extension
of time under clause 44.1 (Extension of time for completion). Reference to the Engineer under this subclause will not amount to a request for a decision under clause 67.1 (Engineer's Decision) because a
party requiring such a decision must make express reference to clause 67.1.
Clause 61.1 (Approval only by Defects Liability Certificate) indicates that any approval by the Employer's
Representative is not in any event effective. Clause 13.1 (Work to be in accordance with contract)
requires the Contractor to execute the works in strict accordance with the contract to the satisfaction of
the Engineer. If clause 13.1 has not been delegated to the Engineer's Representative, again his
expression of satisfaction will not be effective. If it has been delegated, then the position is unclear. It is
submitted that if the work was demonstrably not in accordance with the contract, then the Engineer's
Representative would have no power to express such satisfaction as it would be relieving the Contractor
of one of his obligations under the contract contrary to clause 2.1(c) above.

2.4 - Appointment of Assistants

There is a perhaps inevitable uncertainty about the scope of the power of assistants to issue instructions.
The Contractor has to decide whether instructions given by an assistant are "necessary to enable them to
carry out their duties", or "necessary ... to secure their acceptance of materials ...". The meaning of the
second circumstance is particularly obscure. Thus, a Contractor will be well advised if in any doubt to
seek the Engineer's confirmation pursuant to clause 2.3(b). The Engineer is obliged to respond but no
time limit is specified. This could put the Contractor in the awkward position of having to decide between
the risk of delay whilst an instruction is queried against the risk that the cost of complying with the
instruction could be irrecoverable if the instruction is held to be unauthorised.
An independent inspector nominated under clause 37.5 (Independent inspection) is to be considered as
an assistant under this sub-clause.

2.5 - Instructions in Writing

This clause supplements clause 1.5 (Notices, consents etc) by adding instructions to the list of items
which must be in writing. There is scope for confusion however with regard to oral instructions. The
Contractor has an obligation to comply with such oral instructions but they are not deemed by the subclause to be instructions until confirmed. Whilst it is obviously necessary to have a regime which prevents
unscrupulous Contractors claiming payment for oral instructions not given, this sub-clause requires the
Contractor obeying the instructions to run the risk that confirmation will not be forthcoming or that his own
confirmation will be contradicted by the Engineer. There is also an anomaly whereby confirmation given
by the Engineer results in the written confirmation amounting to the instruction whereas an uncontradicted
confirmation by the Contractor results in the original oral instruction being "deemed to be an instruction of
the Engineer". This could be significant, for example, in relation to the time limits in clause 52.2 (Power of
Engineer to fix rates) or clause 53 (Procedure for claims). In the former case, the failure to give notice of a
claim within 14 days of an instruction varying the work could be fatal to the Contractor's claim. Under this
clause, if an oral instruction is given varying the work and the Contractor writes seeking confirmation of
the instruction, but awaits that confirmation before giving notice of his claim, the Engineer could put the
Contractor into difficulties by failing to contradict the Contractor's confirmation of oral instruction with the
result that the instruction will date back to the original oral instruction, possibly putting the Contractor out
of time.
For the other provisions dealing with instructions, see clause 7.1 (Supplementary drawings and
instructions), clause 13.1 (Work to be in accordance with the contract) and clause 51.1 (Variations).

2.6 - Engineer to Act Impartially

This clause, which is entirely new to the 4th Edition, makes express what is otherwise generally accepted
as an implied term of the contract, namely that the Engineer must act impartially when performing his role
as independent certifier. The difficulty confronting the draftsman was defining that role and distinguishing
it from the Engineer's role as the Employer's agent. The table set out under clause 1.5 will demonstrate
that all of the Engineer's functions are not specifically included in this list. In particular, notices,
certificates, determinations (other than of value) and instructions are not mentioned although they are
undoubtedly covered by (d) "taking action which may affect the rights and obligations of the Employer or
the Contractor". The key word which the draftsman has used to distinguish between the Engineer's roles
is "discretion". The draftsman appears to have assumed that the Engineer has no discretion whilst acting
as the Employer's agent. This assumption may be incorrect.
"(a) giving his decision, opinion or consent". The term "decision" is reserved exclusively for the Engineer's
role in the disputes procedure under clause 67.1 (Engineer's decision). The Engineer's opinion is used
throughout the contract to decide whether a state of affairs exists, such as whether the Contractor has
defaulted under, for example, clause 39.1 (Removal of improper work, materials or plant) or whether rates
and prices are no longer applicable under clause 52.2 (Power of Engineer to fix rates). The most
important consents required from the Engineer are required under clause 4.1 (Sub-contracting), clause
14.1 (Programme to be submitted) and clause 46.1 (Rate of progress).
"(b) expressing his satisfaction or approval". In relation to the term "satisfaction", see the commentary
under clause 13.1 (Work to be in accordance with Contract). See clause 61.1 (Approval only by Defects
Liability Certificate) in relation to the term "approval".
"(c) determining value". The Engineer is required to determine value under clause 52 (Valuation of
variations), clause 56.1 (Works to be measured), clause 60 (Payment) and clause 63.2 (Valuation at date
of termination). In addition a number of clauses such as clause 65.3 (Damage to Works by special risks)
require the Engineer to value in accordance with clause 52.
"Any such decision...may be opened up, reviewed or revised as provided in clause 67." As will be seen
from the table under clause 1.5 (Notices, consents etc) there is a mismatch between this list and the lists
given under clause 67. The terms "open up, review and revise" are to be found in clause 67.3 (Arbitration)
but, it is submitted, the Engineer also has power to review his decisions when asked for a decision under
clause 67.1 (Engineer's decision). As decisions of assistants under clause 2.4 (Appointment of assistants)
are deemed to have been given by the Engineer's Representative and communications by the Engineer's
Representative are stated in clause 2.3 (Engineer's authority to delegate) to have the same effect as
though given by the Engineer, this sub-clause applies equally to the exercise of discretion by the
Engineer's Representative and assistants.
The existence in the contract of an obligation that the Engineer be impartial may give rise to an argument
that the Employer is thereby obliged to nominate as Engineer someone who is capable of such
impartiality. Accordingly, the nomination of an employee of the Employer who was obliged to report
proposed decisions to the Employer and take instructions would not be in accordance with the contract.
The argument may be largely academic given that the Engineer will invariably be named in the tender
documentation and in view of the absence of any power permitting the Employer to renominate in the
event of an Engineer ceasing to act: see under clause 1.1 (a)(iv). If an Employer did fail to propose a
replacement candidate capable of impartiality, the Contractor might have grounds for complaint under
clause 69.1 (Default of Employer) item (b) "interfering with or obstructing... the issue of any such
certificate". For further comment on the effect of this clause on the duties of the Employer in relation to the
Engineer, see under sub-clause 2.1 above.

FIDIC's concept of an express obligation to be impartial has been adopted by ICE 6th at clause 2(8).
However, instead of attempting a general definition of the Engineer's functions undertaken as an
independent person, ICE 6th obliges him to be impartial in respect of all matters which are not listed as
matters requiring the prior approval of the Employer under the clause equivalent to sub-clause 2.1 (b)
above. There is, however, no equivalent in ICE 6th to clause 69.1 item (b) permitting the Contractor to
terminate in the event of the Employer "interfering with or obstructing... any such certificate".
On the wording of this sub-clause, it is not difficult to mount an argument that every function of the
Engineer under the contract involves a discretion and affects the rights and obligations of the parties.
Accordingly, every function of the Engineer could be subject to the impartiality obligation with the result
that the Engineer would not be able to function as agent for the Employer serving only the Employer's
interest. The Employer would therefore be obliged to specify in the contract that the Engineer is not
"required to exercise his discretion" in certain instances. This might be achieved by listing certain
functions required to be agency functions in Part II. This then becomes similar to the ICE 6th.
For further commentary on this subject, see the section on the role of the Engineer.