International Construction Law Review
INTRODUCTION
CHANTAL-AIMÉE DOERRIES QC
DOUGLAS S JONES AO
Managing risk, and the allocation of responsibility for risk, are central to construction and engineering projects, wherever the projects are located around the world and irrespective of the sector. Risk is what governments, contractors, professionals and insurers focus on at the outset, when tenders are submitted and contracts entered into. It dominates, implicitly if not expressly, much of the administration of the contract during the construction period and it is right at the heart of dispute avoidance and dispute management. The consequences of misjudgements or errors in relation to risk can be grave. Much of this final ICLR of 2018 is concerned with risk: where it arises, and how to reduce it, or at least manage it.
We start with Bond Call Insurance: Is It Worth the Candle? in which Nicholas Brown and Ang Wee Jian consider the various ways in which contractors can manage the risks associated with on-demand performance bonds, particularly in relation to calls on the bond. The authors discuss the challenges faced by contractors who want to injunct a call on a bond through the courts. The discussion concentrates on the respective approaches in England and Wales, New York State, and Singapore and reviews the various, often ultimately largely unsuccessful, approaches contractors generally adopt in an attempt to strengthen their application for an injunction. This forms the backdrop for an interesting analysis of the pros and cons of bond call insurance, often overlooked by contractors as an option. The review focuses on two policies, issued by the United Kingdom Export Finance and the Swiss Export Risk Insurance. There are clearly challenges flowing from the onerous conditions frequently attached to entitlement and lengthy indemnification processes. However, for some contractors, such policies enable a competitive tender. While the utility of such insurance will undoubtedly vary from project to project, and from contractor to contractor, contractors, and those advising them, should be aware of the availability of this type of insurance, and this article provides a valuable reminder of the central issues.
Some 60 years after the first FIDIC form, the Red Book, was introduced, a second edition of the FIDIC suite of contracts has been launched. Frédéric Gillion, Rob Morson, Sarah Jackson and Chloé De Jager take the opportunity presented by the first anniversary of this release, to consider the new forms, The New FIDIC Suite 2017: Significant Developments and Key Changes. The review focuses on three important aspects, risk allocation, contract management and new claims and disputes procedures. Risk allocation, commercially at the heart of any contract, is largely unaltered. As for processes, both in terms of the management during the course of the project, and in terms of the management of disputes, we will need a few more years to be able to assess the impact on the industry of these changes, in particular the last two. It is hoped that the extensive changes to
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