International Construction Law Review
THE ORGALIME TURNKEY CONTRACT FOR INDUSTRIAL WORKS—AN ALTERNATIVE TO FIDIC’S SILVER BOOK?
NICK HENCHIE1
Partner, Construction and Engineering Group at Mayer, Brown, Rowe & Maw LLP
Introduction
In March 2003, Orgalime published a Turnkey Contract for Industrial Works (the “Orgalime Contract”). This is the latest in a long line of contracts which the Orgalime Legal Affairs Working Group has produced over the course of many years. The first Orgalime legal publication was issued in the 1950s.
Orgalime is the European Federation of National Industrial Associations and represents the European mechanical, electronic and metal articles industries. It is not an organisation that is as well known as, for example, FIDIC, but for those companies who participate actively in Orgalime, it is every bit as important and, in certain parts of Europe (for example Switzerland, Austria and Germany), perhaps more so.
The organisation has three main objectives, namely, to collect information about the activities of the European Union and international bodies of direct relevance to Orgalime, to establish coordinated opinions of the engineering industries and, using these opinions, to influence policy-making in the European Union institutions and certain international bodies, and to promote relations between member federations/associations.2
Orgalime’s Legal Committee has long been tasked with producing practical, balanced model forms of contract for use in different situations. The most popular of these are S2000 for the supply of mechanical, electrical and electronic products, and SE01 for the supply and erection of such products.
Following the publication of the new suite of FIDIC contracts in 1999, in particular FIDIC’s Silver Book, the Legal Committee of Orgalime decided to draft a new turnkey contract for industrial works, which could be used as an
1 Nick Henchie is a partner in the Construction and Engineering Group at Mayer, Brown, Rowe & Maw LLP. He was consulted on the drafting of the Orgalime Contract. The author is also a member of the ICC’s Taskforce on Turnkey Transactions (Industrial Plant) currently drafting a new form of turnkey contract. The author is also chairman of the IBA’s FIDIC Committee. He can be contacted at nhenchie@mayerbrownrowe.com
2 Further information about Orgalime and its activities can be found on its website www.orgalime.org
[2004
The International Construction Law Review
68