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3/18/2020 FIDIC Red Book 2017: Top 7 Changes - Lexology
Claims (Cl. 20): The provisions relating to Claims and Disputes have been separated and redrafted substantially.
Clause 20 (Claims) sets out a procedure for (a) Employer Claims (“additional payment from the Contractor (or
reduction in the Contract Price) and/or to an extension of the DNP”); (b) Contractor claims for “additional payment
from the Employer and/or to EOT”; and (c) either Party for “another entitlement or relief against the other...of any
kind whatsoever…except (a) and (b).” Notably, the existing 28-day time requirement for notifying claims now
applies to the Employer as well, and the old 42-day timeframe for the “fully detailed claim” has been increased to 84
Days.
DAAB (Cl. 21): The newly introduced “DAAB,” which stands for “Dispute Avoidance / Adjudication Board” (in
contrast to the previous “DAB”), brings with it a number of important procedures. First, unless the Parties agree
otherwise, the DAAB members are to be appointed within 28 days after the Contractor receives the Letter of
Acceptance; there are also detailed procedures for resignation, termination and new appointments. Second, the
DAAB may provide “Informal Assistance” if jointly requested by the Parties, who are not bound to act on the
DAAB’s advice. Third, in terms of time-bars (a) the DAAB must give its decision within 84 days after receiving the
reference; (b) a Party must refer a Dispute to the DAAB within 42 days after giving or receiving a Notice of
Dissatisfaction with the Engineer’s determination; and (c) a Party that is dissatisfied with the DAAB’s decision must
give an NOD to the other within 28 days or else the decision becomes final and binding on both Parties. Fourth,
arbitral tribunals are empowered to order the enforcement of a DAAB decision, by way of summary or other
expedited procedure, whether by an interim or provisional measure or award.
It is clear that the drafters of the new edition have gone to great lengths to address previous criticisms from users,
including greater emphasis on dispute avoidance. While the new edition is more rigid and prescriptive than its
predecessor (not to mention, nearly double the length), which is likely to put more pressure on employers and
contractors to ensure they comply, the overall risk allocation remains generally the same. Given its early days, it
remains to be seen whether regional owners and contractors adopt the 2017 Red Book or stick with its 18-year-old
predecessor.
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