Case Study: International Construction Contract Arbitration and FIDIC

This assignment analyzes a case study concerning a dredging contract governed by FIDIC conditions. The contractor encountered an unforeseen historic wreck, leading to extra costs and delays. The engineer, however, denied the contractor's claims, citing foreseeability, non-compliance with notice requirements, and lack of critical path impact. The solution explores the arbitration process, emphasizing the importance of understanding the governing clauses (specifically FIDIC Clause 20 and ICC regulations), issuing timely notices, and maintaining detailed records. The contractor's actions during the project, such as not securing proper acknowledgment of the wreck and failing to halt construction, are highlighted as potential shortcomings. The assignment offers advice to the contractor on how to present a strong case, including providing comprehensive claim details, utilizing contemporary records, and understanding the dispute review board's role. The analysis underlines the significance of proactive risk management, insurance, and adherence to contractual procedures to protect the contractor's interests during arbitration proceedings.

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INTERNATIONAL CONSTRUCTION CONTRACTS AND ARBITRATION
Name of Student
Institution Affiliation

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The likely issues in the case before the jurists
 Whether it was the responsibility of the contractor to identify the wreck in prior as a
component of foreseeable circumstances
 Whether the contractor complied with the contract in terms of issuing notices and claims
on time
 Whether the contractor was short of time and was not to be given an extension of time
 Whether the extension fell on the critical path of the contract
 Whether the contractor or the engineer had breached the contract
Advice to the contractor on how to go about the case to prove itself
In the first instance, the contractor will have to understand the various modalities which
are entailed in the arbitration process. This is because it is different from a court of law where
some lawyers and jurists will be able to listen to the case and determine the outcome. In this
case, going about the whole arbitration process will depend on how the contractor will present
his case to his side of the case.
First of all, he will have to understand the clause which guides the case. In this case,
clause 20 of the FIDIC conditions will be the one guiding the case. This clause enables the
contractors a basic right to claim additional compensation either in terms of time or money, if
they strongly feel they are guaranteed some kind of compensation under the legally binding
document. However, under this clause, there is a contract claim, which he will have to submit
before the dispute review board. This dispute review board is an independent body which is
mandated to be in charge of the arbitration process, as opposed to the earlier 1987 red book
clause which made the engineer be in charge of the arbitration process (Allen, 2011).

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However, the case has to also abide by the ICC regulations. Implying that, The ICC provisions of
Articles 6(3)–6(7) and nine shall guide the case where each party can make a claim against the
other. Nonetheless, the ICC regulations under arbitration speculate that an arbitration tribunal
can be formed, which, upon agreement by the parties, can act solely or appoint another
independent review body. In this instance, the assumption is that an independent tribunal has
been selected by the ICC tribunal on arbitration of contracts. So, below are some of the things
that the engineer needs to do for him to prove his case
 Issue a notice within the first twenty-eight days of being aware of the circumstance that
the wreckage has been identified. This notices of great significance since every person
will be knowledgeable of the fact that there is a circumstance or an event where
additional payment or time is due to the contractor. In this case, both time and money will
be required (Dewar, 2011)
 This document will be essential for future records and future reference purposes.
 There might arise other alternate or possible solutions to the matter which will help to
lessen the effects that the event may be associated with
 It might offer a chance of solving the matter within an earlier timeline
In addition to issuing a notice within the first four weeks, the contractor needs to be aware of the
various sub-clauses, which gives strength to his claim. An instance is the sub-clause 20.1, which
states that "'If the Contractor suffers delay and/or incurs Cost ... the Contractor shall give
notice ... and shall be entitled subject to (a) an extension of time ... (b) payment of any such
Cost...'" Some of the information which the contractor has to detail in his claim/notice includes:
 Full detail of the circumstance as well as the events which proceed

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 The notice does not need to indicate the time nor the money which the contractor needs
 The notice shall be in a formal manner, for instance, in writing and then copies produced
and availed o the right manner.
 The various progress reports shall also be accompanied as well with the notice. They
have to be in accordance with section C1 4.21(f).
 After delivering the notice, the engineer needs to get an acknowledgment, a simple one
from the engineer or the employer.
 Once the claim has started to take the suit, below are some of the things that the
contractor needs to do/know (GHAFFAR, 2012)
 Keep all the contemporary records which will be inspected by the review board.
 Submit a full and comprehensive claim within the first forty days of the circumstance, or
at an agreed time (time agreed in writing)
 He needs not to overemphasize on the already kept records
 He needs to provide all the claims which are in process as well as their details
After submitting the full details of the claims, the review board/engineer shall give an
acknowledgment notice accompanied with detailed comments, which might be optional.
However, the board/engineer does not need to respond to the principles of the claim. Each of the
submitted payment receipts shall be inclusive of amounts which have been reasonably sustained
in the process. At this point, section clause 3.5 will guide the process. This clause shall determine
whether the review board has acted accordingly and has considered keenly scrutinized the claims
of the contractor in coming out with a recommendation.
Some significant elements of this section include: the review boards after checking all the
tables claims and correspondence, shall come up with a fair recommendation while considering

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all the relevant circumstances. This implies that their decision made has to be binding and fair
enough for all the parties. However, a time limit has to be used beyond which the response needs
not to go beyond. If in case the decision reached shall not have favored the contractor, in such a
situation, he shall consider requesting for the review boards decision (Red Book Cl 67.1)
(Rubino-Sammartano, 2014).
What more it might or should have done during the course of the works
In the course of the works, there various actions/steps which the contractor might have
done in order to avoid all these circumstances. For instance, in dredging contracts, it encounters
circumstances which might be foreseen, also known as risks during construction. These risks
need to be insured, and the contractor would have requested for formal insurance regarding the
risks that might be encountered during the construction
Additionally, it is evidenced that the contractor notifies the engineer of the wreck in time.
However, the engineer did not come to assess the claim by the contractor immediately and thus,
later on, made a decision that the contractor did not comply with terms of the contract in issues
notices and claims. This might also mean that despite issuing a notice to the engineer, the
contractor did not get an acknowledgment notice from the engineer over the same, and thus
might not actually prove that he actually notified him. The contractor would have waited and had
a duly signed and official acknowledgment from the engineer regarding the situation of the
wreck so that his burden of proof can fully be substantiated.
Further, despite the engineer notifying the engineer of a wreck, the engineer was
supposed to take action and asses the said claim. However, it seems that this did not happen and
as such, the best options that the contractor would have taken is to halt the construction

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according to the terms of the contract until the issue is addressed. In this way, the whole issue
would have been absolutely left on the part of the engineer and not the contractor.

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References
Allen, M., 2011. Construction disputes on the rise. Construction Law Journal, 27(6), pp.525-
528.
Dewar, J. ed., 2011. International project finance: law and practice. Oxford University Press.
GHAFFAR, A., 2012. The 2012 ICC Arbitration Rules.
Rubino-Sammartano, M., 2014. International arbitration law and practice. Juris Publishing, Inc.