F R O M T H E I B A I N T E R N A T I O N A L C O N S T R U C T I O N P R O J E C T S C O M M I T T E E OF THE

ENERGY, ENVIRONMENT, NATURAL RESOURCES AND INFRASTRUCTURE LAW SECTION (SEERIL)

Vol 19 ISSUE 3         ISSN 1819-1371 NOVEMBER 2024

Regulatory
The Standing
changes in Expert evidence,
International
Argentina damages and costs:
Forum of
that promote a DIFC case law
Commercial
infrastructure update
Courts (SIFoCC)
investment
 International Bar Association
Events 2024
Conferences
AUGUST DECEMBER
The role of the courts in 9th Annual Corporate Governance
arbitration: Conference
an Asia Pacific perspective 4 – 5 December, Frankfurt, Germany
28 August, Singapore 2nd Annual IBA Asset Recovery
Conference
4 – 6 December, Riu Plaza España,
SEPTEMBER Madrid, Spain
11th Biennial IBA Global
28th Annual Competition
Immigration Conference
Conference
4 – 6 December, Leonardo Royal Hotel
6 – 7 September, St Regis Florence,
London
Florence, Italy
St Paul’s, London, England
IBA Arb40 Symposium
15 September, Centro Citibanamex,
Mexico City, Mexico
Rule of Law Symposium 2024
20 September, Centro Citibanamex,
Mexico City, Mexico NOVEMBER Webinars
The New Era of Taxation
The key legal considerations:
7 – 8 November, Tivoli Avenida acquiring start-ups and early stage
OCTOBER Liberdade, Lisbon, Portugal companies in India
IBA Private Equity Transactions The AI battlefields – How to 2 August, 1200 - 1300 BST
Symposium 2024
navigate and overcome the legal
17 October, The Savoy, London, Tax trends in Asia: regional tax and
challenges
England case law updates and perspectives
7 – 8 November, Excelsior Hotel Gallia, on global developments
Young Lawyers Private Equity Milan, Italy
20 August, 1500 - 1630 SGT
Forum 2024
IBA Anti-Corruption Committee
17 October, The Savoy, London,
Asia Conference
England
11 – 12 November, Singapore
10th World Women Lawyers’
Conference: Driving Change 7th Annual IBA European Start-up
Conference Full and further information
23 – 25 October, The Ritz-Carlton, on upcoming IBA events can
Toronto, Canada 13 November, Stockholm, Sweden
be found at:
Building the Law Firm of the Future
Asia Pacific Mergers & Acquisitions
Conference 21 November, The Law Society,
bit.ly/IBAevents
24 – 25 October, Tokyo, Japan London, England
14th IBA French-Italian Day
28 November, Automobile Club de
@IBAevents
France, Paris, France
CONTENTS A Committee publication from the IBA Energy, Environment, Natural
Vol 19 ISSUE 3 November 2024 Resources and Infrastructure Law Section

REGULARS
2 From the Co-Chairs
3 From the Editors
4 FIDIC around the world
4 Egypt
6 Country Updates
6 The Netherlands
8 Brazil
31 Book Review

FEATURES

Regulatory changes in Argentina that promote infrastructure International Bar Association

9 investment Chancery House, 53–64 Chancery Lane,
Jorge Ignacio Muratorio and Ana Belén Micciarelli London WC2A 1QS, United Kingdom
Tel: +44 (0)20 7842 0090
Fax: +44 (0)20 7842 0091
Expert evidence, damages and costs: a DIFC case law update www.ibanet.org
13 Wala Al-Daraji
Editorial:
editor@int-bar.org
Advertising:
The Standing International Forum of Commercial Courts (SIFoCC) andrew.webster-dunn@int-bar.org
17 Virginie Antonella Colaiuta and Basil Thévignot

© International Bar Association 2024

All rights reserved. No part of this publication may be
reproduced or transmitted in any form or any means,
or stored in any retrieval system of any nature without
A growing need for international enforcement of construction the prior written permission of the copyright holder.
20 adjudication decisions Application for permission should be made to the
Director of Content at the IBA address.
M Saleh Jaberi and Liam Hendry

Risk management and contractual risk allocation in subsea site

26 investigations and installation activities for offshore wind farms
Cover image: Aerial view of large highway
Emilio Linde-Arias and Risteard de Paor in the city of Mendoza, Argentina.
Credit: SobrevolandPatagonia
/Adobe Stock

CONSTRUCTION LAW INTERNATIONAL Volume 19 Issue 3 November 2024 1

FROM THE CO-CHAIRS

D ear ICP Committee Members,

As Co-Chairs of the IBA International Construction Projects (ICP) Committee, we are pleased to share that
2024 has been an exciting year for the ICP. We held several compelling sessions on construction and infrastructure
topics at our Working Weekend in Oxford in April, as well as at the IBA Annual Conference in Mexico City in
September. We extend our sincere gratitude to all ICP members for their participation in these events, with a
special thank you to the officers who have been committed and dedicated throughout this journey. Your insights,
experiences, and contributions are what make our Committee such a dynamic and resourceful body.
At the IBA Annual Conference in Mexico City, we hosted seven panels: ‘Design, bid, build: contracts on trial’;
‘Mediation for construction disputes: is it successful? What does it take?’ (in collaboration with the IBA Mediation
Committee); ‘How to financially secure a project’; ‘Local customs and practices in the construction industry’;
‘Seeing is believing: evidence-gathering through site visits in energy, mining, and construction arbitrations’;
‘Dispute resolution clauses fit for a queen’; and ‘Use of innovative technology in the construction industry’. We
also had a highly successful ICP Committee dinner at Hacienda de los Morales in the beautiful Polanco area.
At our Open Business Meeting at the conclusion of the IBA Annual Conference in Mexico City, we celebrated
the launch of the 2025 ICP Working Weekend, to be held in Rio de Janeiro, Brazil, in April 2025. The Working
Weekend is limited to a select group of participants, traditionally capped at 60 members. The list is determined
on a ‘first come, first served’ basis following the ICP Business Meeting at each year’s IBA Annual Conference. For
more information, please contact our dedicated information desk at icpwwrio@gmail.com.
Additionally, our Committee is organising the traditional ICP Conference in Milan from 27–29 March 2025,
and we invite all members to actively participate in this special event. We look forward to seeing you there. For
more details, visit this link: www.ibanet.org/conference-details/CONF2531.
The next IBA Annual Conference will take place in Toronto, Canada, from 2–7 November 2025. The ICP
Committee will host five panels at the conference. If you plan to attend, please be sure to follow up on the
expression of interest call, which will be sent to all ICP members in June 2025. When registering for the event,
be sure to also sign up for the ICP dinner and the traditional ICP excursion.
As for our publication, Construction Law International (CLInt), it’s fantastic to see so many of you contributing.
We encourage you to continue submitting drafts to the CLInt editors – your contributions enrich our community
and advance the field.
Thank you for your continued support and engagement.

Best wishes,

Júlio César Bueno

Pinheiro Neto Advogados, São Paulo
jbueno@pn.com.br

Virginie Colaiuta
LMS Legal, London
virginie.colaiuta@lmslex.com

2 CONSTRUCTION LAW INTERNATIONAL Volume 19 Issue 3 November 2024

 FROM THE EDITORS

D ear readers,
We are delighted to introduce the November issue of Construction Law International (CLInt), after the
highly successful International Bar Association Annual Conference in Mexico City.
This issue continues our FIDIC around the world series with a contribution from Egypt. We also have country
updates from Brazil and the Netherlands.
We have a feature article on regulatory changes in Argentina to promote infrastructure investment as well as an
article on expert evidence, damages and costs in the Dubai International Financial Centre.
We also have an interesting submission on the contributions made by the Standing International Forum of
Commercial Courts since its founding eight years ago in 2016.
Further, we have feature articles on two topical issues: the international enforcement of adjudication decisions
and risk allocation and management in subsea site investigations and installations of offshore wind farms.
Finally, we were delighted to review a collection of essays on hospitality and construction disputes post-
Covid-19, which have been edited and compiled in a book.
We thank our contributors for sharing their experience and insights. As always, we encourage all International
Construction Projects Committee members to contribute to CLInt by submitting articles to Thayananthan
Baskaran at thaya@baskaranlaw.com.

Thayananthan Baskaran
Committee Editor, IBA International Construction Projects Committee
Baskaran, Kuala Lumpur
thaya@baskaranlaw.com

Eric Franco
Deputy Committee Editor, IBA International Construction Projects Committee
Legal Delta, Lima
eric.franco@legaldelta.com

CONSTRUCTION LAW INTERNATIONAL Volume 19 Issue 3 November 2024 3

 FIDIC AROUND THE WORLD
COUNTRY UPDATES

FIDIC contracts have been used clauses that grant the contractor
in the execution of the Cairo Metro the right to adjust prices, whether
project, the Damietta Port upward or downward, to reflect
Development project, and the Kafr changes in the cost of labour,
El-Sheikh Wastewater Treatment materials or other costs.
Plants, among others. It should be noted that Egyptian
law grants additional rights not
3. Does FIDIC produce forms of contemplated under the FIDIC
contract in the language of your Conditions of Contract. For
jurisdiction? If not, what language instance, Article (662) of the Civil
do you use? Code permits subcontractors to
While FIDIC produces its suite directly request the employer to
FIDIC AROUND THE of contract forms in Arabic, the pay outstanding amounts, to the
WORLD English language is used more in extent that such amounts are
Egypt given the international nature payable by the main contractor at
of the construction sector, which the time of the claim. The Civil
Egypt
mostly involves foreign parties. Code also imposes strict liability
Hazim Rizkana Nonetheless, where a dispute is on the contractor and the
Rizkana & Partners, Egypt examined by a local court, all engineer in respect of defects
hazim.rizkana@rizkanapartners.com documentation shall be submitted arising in a building or structure
Salma El-Nashar
in the Arabic language. for a period of ten years. This is
It is worth noting that the 2017 called decennial liability and is a
Rizkana & Partners, Egypt
FIDIC contract forms are translated matter of public order.
salma.elnashar@rizkanapartners.com
into five major languages, among
which is the Arabic language. 6. Does your jurisdiction treat
References to FIDIC clauses are references Sub-Clause 20.2.1 of the 2017
to the 1999 Red and Yellow Books, unless 4. Are any amendments required suite of FIDIC contracts as a
otherwise indicated. in order for the FIDIC Conditions condition precedent to employer
of Contract to be operative in and contractor claims?
1. What is your jurisdiction? your jurisdiction? If yes, what The 2017 suite of FIDIC contracts
The Arab Republic of Egypt. amendments are required? are not yet commonly used in Egypt
There are no specific amendments but, generally speaking, there are
2. Are the FIDIC forms of contract that are required for the FIDIC no clear court precedents and
used for projects constructed in Conditions of Contract to be interpretations in this context,
your jurisdiction? If yes, which of operative in Egypt. However, FIDIC except in scholars’ studies.
the FIDIC forms are used, and for conditions that conflict with rules
what types of projects? enshrined in Egyptian legislation 7. Are dispute boards used as
Yes, the FIDIC forms of contract are automatically overridden by an interim dispute resolution
are used in construction projects domestic provisions that include mechanism in your jurisdiction?
in Egypt, particularly for mega, mandatory rules which parties If yes, how are dispute board
industrial and infrastructure cannot derogate by agreement. decisions enforced in your
projects. The most common forms jurisdiction?
used are the 1987 and 1999 editions 5. Are any amendments common Yes, dispute boards are used by
of the Red and Yellow Books, and in your jurisdiction, albeit not parties in Egypt as an interim
previously the 1977 Red Book. The required, in order for the FIDIC dispute resolution mechanism,
Silver Book is used for engineering, Conditions of Contract to be following the Engineer’s
procurement and construction operative in your jurisdiction? Determination. Although
(EPC) and turnkey projects. If yes, what amendments are resorting to the dispute board
However, some limitations exist in common in your jurisdiction? is often a mandatory step prior
cases where the New Procurement FIDIC Conditions of Contract to commencing arbitration
Law No 182 of 2018 (governing are frequently altered in favour proceedings, its decisions are not
contracts concluded by public of the employer. For example, enforced in many instances. The
authorities) applies, and where the contract conditions are often dispute board model typically
the FIDIC clause incorporates amended to lump-sum (fixed used in Egypt is the ad hoc Dispute
common law concepts that are price) so the employer avoids the Adjudication Board (DAB), rather
incompatible with the civil law risk of variation in the quantities, than the standing DAB.
system in Egypt. along with keeping fluctuation

4 CONSTRUCTION LAW INTERNATIONAL Volume 19 Issue 3 November 2024

8. Is arbitration used as the final 10. Is there anything else specific
stage for dispute resolution for to your jurisdiction and relevant to
construction projects in your the use of FIDIC on projects being
jurisdiction? If yes, what types constructed in your jurisdiction
of arbitration (ICC, LCIA, AAA, that you would like to share?
UNCITRAL, bespoke, etc) are Private contracts and public
used for construction projects? works contracts are subject to a
And what seats? different set of rules in Egypt;
Yes, arbitration is widely used consequently the application of
in construction disputes. the FIDIC Conditions on each
Commonly, contracts provide for type differs in terms of limitations
arbitration under the auspices and amendments.
of the International Chamber of
Commerce (ICC) or the Cairo
Regional Centre for International
Commercial Arbitration (CRCICA).
The seat of arbitration is Cairo in
most cases.

9. Are there any notable local court

decisions interpreting FIDIC
contracts? If so, please provide a
short summary.
G e n e r a l l y, E g y p t i a n c o u r t s
interpret provisions and articles
set out in the Civil Code, or
other legislations, applicable on
construction matters but do not
particularly tackle FIDIC clauses
in terms of interpretation. Yet,
a decision issued by the Cairo
Court of Appeal in 2012 ruled
that the non-compliance with
the requirement to submit a
claim to the engineer, prior to
initiating arbitration proceedings,
renders the claim inadmissible,
being a procedural precondition
agreed upon between the parties
in the standard terms of the
contract (Cairo Court of Appeal,
C i rcu i t ( 6 3 ) – C o m m e rci a l ,
Appeal No 9 of 127 JY). This
might be considered as an indirect
reference and interpretation of
the FIDIC conditions.
It is worth considering that the
Egyptian Civil Code does not regulate
in detail the role of the engineer,
employer or the contractor, nor
regulate issues related to claims
procedures, extension of time,
foreseeable and unforeseeable
risks, etc. The provisions are rather
generic in the Civil Code and,
accordingly, courts have no specific
approach in this respect.

CONSTRUCTION LAW INTERNATIONAL Volume 19 Issue 3 November 2024 5

COUNTRY UPDATES
In their second argument, the whether those unbuilt areas must
plaintiffs relied upon the (broader) be considered separately and
duty of care to argue that the treated differently when
contractor shall still be liable. The transferring of ownership of
Supreme Court recognised that if that plot.
the damage materialises, even if the
construction work was carefully
planned and correctly executed, it Court of first instance, Zeeland-
cannot be accepted that this is a West-Brabant 21 February 2024,
liability the plaintiff must carry. The ECLI:NL:RBZWB:2024:1623
conclusion of the case was that the
contractor was held liable, In this case, a contractor entered into
COUNTRY UPDATES: regardless of whether he had acted a contract with his client to build a
diligently, and had to pay a house. The contractor terminated
THE NETHERLANDS compensation to the affected the contract alleging that the client
neighbour. The Supreme Court wanted to wait too long before
Recent court decisions stated that it was of importance in starting the building process. The
of relevance to this case that (1) the construction contractor did not want to wait that
construction projects was in the interest of the client of long. Dutch law does not recognise
the contractor and that the plaintiffs the possibility of termination of
Marc Houweling
had no interest in it; (2) the damage service contracts; nevertheless,
Van der Feltz, The Netherlands
was beyond what a third party, this is possible if it is a building
houweling@feltz.nl
according to generally accepted contract. The court of first instance
standards, should tolerate in the determined that it was a service
case of construction work carried contract, applying Article 6:217 in
Dutch Supreme Court,
out by a neighbour; and (3) that it combination with Article 7:750 of
12 January 2024,
was the contractor’s responsibility the Dutch Civil Code. Those articles
ECLI:NL:HR:2024:17
to insure itself against liability for say that, for a service contract when
(Afzinkkelder-arrest)
causing damage to third parties. there has been an offer to create and
This ruling is relevant because it deliver a work of a material nature
In the case, decided by the Supreme takes into consideration the against an agreed price to be paid by
Court at the beginning of 2024, diligence of the contractor when the client, if such an offer has been
there was damage to an adjacent carrying out the works. accepted by the client, it has to be
property due to the construction of executed by the building contractor.
an immersion cellar. The adjacent Thus, the building contractor was
property owner took the matter Dutch Supreme Court, in breach of contract. The court of
to court to request a declaratory 9 February 2024, first instance determined that the
decision (Article 3:302 BW). The ECLI:NL:HR:2024:216 client had a right to retain the down-
plaintiff argued that their right to payment in compensation and that
the full and unaffected enjoyment The frequent question of whether the building contractor had no right
of their property was breached due a property is a construction site to any counterclaim.
to an unlawful act of the contractor, for VAT purposes has significant
considering that the damage to their financial relevance when a building
adjacent property was a foreseeable is being sold. The Supreme Court Dutch Supreme Court,
consequence. However, with decided that in the sale of an 15 December 2023,
reference to the legislative history immovable property that considers ECLI:NL:HR:2023:1755
of Article 6:162 of the Dutch Civil one plot that contains not only a
Code, the Supreme Court stated that building but also unbuilt land, the The court of first instance had
damage to adjacent property does not fiscal qualification for VAT purposes requested the Supreme Court to rule
create an infringement of the rights shall be determined by a step-by- on the question of whether a plot of
of the adjacent property owners just step analysis: land with the purpose in the zoning
because the damage was foreseeable. 1. Is it considered a building with plan being ‘living’ (see the Spatial
An act, such as construction, can unbuilt land? Planning Act) is immovable property,
only be found to be unlawful if it is 2. If this is not the case, is it all or a component thereof, with the
contrary to a standard of written or unbuilt land? intention for residential use in the
unwritten law that intends to prevent 3. If the answers to questions 1 and 2 sense of Article 7:2, paragraph 1
such property damage. are negative, it must be considered of the Dutch Civil Code.

6 CONSTRUCTION LAW INTERNATIONAL Volume 19 Issue 3 November 2024

 The Supreme Court stated that the permits necessary for warn the client of inaccuracies in
to answer whether one speaks of a construction of new buildings the instructions, as far as they knew
sale of ‘an immovable property, or (especially building permits and or shall reasonably be expected to
component thereof, with the permits under the Environment know.
intention for residential use’, it is and Planning Act). Permits that Thirdly, Article 7:757a of the
decisive whether the seller has have been requested before 1 Dutch Civil Code was included to
obliged itself to the buyer to deliver January 2024 will still be considered oblige the contractor to provide a
a home respectively whether the under the former law. For permits handover file with its request for
buyer has a right against the seller that have been requested before 1 preliminary inspection before
for delivery of a home. It follows January 2024, the old system handing over the structure. In this
that if a seller has obliged itself remains applicable. The same is handover file, the contractor must
against the buyer in the contractual true for proceedings where an show that it has met all
agreement of delivery of a house, objection or appeal is pending.3 requirements of the contract.
the requirement that the The Quality Assurance Act only Fourthly, Article 7:765a of the
agreement should be set out in applies to structures within Class 1, Dutch Civil Code now ensures that
writing as noted in Article 7:2, first according to the classification the contractor informs the client
paragraph, and the buyer’s contained in Article 2.17 of the of financial securities that will
remorse period stated in Article Structures (Living Environment) cover the risks. This is only
7:2, second paragraph, Dutch Civil Decree. In general, Class 1 applicable to the construction of
Code, are applicable. A contract of structures include residences and residencies for consumers.6
sale in which the seller obligates small commercial buildings.4 The Lastly, Article 7:768 of the Dutch
itself against the buyer to deliver a main requirement for applying the Civil Code now states that the client
plot of land with the purpose in Quality Assurance Act is whether has the right to retain as security 5
the zoning plan being ‘living’ the relevant structure is considered per cent of the contract price on the
cannot be ascertained as a contract Class 1. It is still unclear what is last instalment(s) and to deposit it
of sale in the sense of Article 7:2, meant by the concept of ‘structure’, with the notary. After three months
paragraph 1, Dutch Civil Code. as no definition has been included the retained amount shall be paid
in the Quality Assurance Act even out, unless the client informs the
though it is regarded as an essential notary that the conditions for
Change in the local law of concept in determining the reach suspension have been met. A
relevance to construction of the Act.5 It is assumed, however, suspension may be justified if a
projects that the definition is likely to be shortcoming is included in the
included in the attachment of the delivery/completion report of the
Quality Assurance (Building Sector) Environmental and Planning Act building. This retention can be up to
Act, in effect 1 January 2024 at a later stage. When exactly this three months.
will be the case is still uncertain.
A new Environmental and Planning The private law part of the
Act entered into force on 1 January Quality Assurance Act applies to
2024. This new law is a significant service contracts that have been Notes
change in the Dutch legal system that concluded after 1 January 2024. 1 ‘ We t Kwa l i te i t s b o rg i ng vo o r h e t
regulates the physical environment. Whether a contract is considered a bouwen (Wkb)’ (IPLO, 2024) https://
With the Environmental and service contract is not decisive for i p l o . n l / reg e l g ev i ng / reg e l s - vo o r -
Planning Act being implemented, the application of the private law activiteiten/technische-bouwactiviteit/
the gradual entry into force of part of this Act. What is decisive, kwaliteitsborging/wet-kwaliteitsborging-
the Quality Assurance (Building however, is that it related to a Class bouwen-wkb/, accessed 11 July 2024.
Sector) Act (the ‘Quality Assurance 1 structure. The private law part of 2 A ter Mors, H Plas et al, ‘Wkb en BW:
Act’) has also been initiated.1 The the Quality Assurance Act has thus wat, kwaliteitsborging en beter werken?’
Quality Assurance Act is one of far led to five changes in Book 7 of (2023), 51, Bouwrecht.
the four supplementing acts that the Dutch Civil Code that considers 3 Article 4.3, Act implementing the
substantiates the Environmental sale and barter. Environment and Planning Act (in
and Planning Act and makes it Firstly, a contractor is initially Dutch: Invoeringswet Omgevingswet).
executable. The Quality Assurance liable for the defects after handing 4 A Duijverman, et al, ‘Het begrip
Act aims to increase construction over the structure (Article 7:758, ‘ b o u w w e r k ’ v o l g e n s d e We t
quality and strengthen the rights paragraph 4, Dutch Civil Code). kwaliteitsborging’ (2022), 10, Bouwrecht.
available to clients.2 Secondly, Article 7:754, paragraph 5 A ter Mors, ‘Wkb: nu dan toch echt’
The public law part of the 2 of the Dutch Civil Code now (2024), 13, Bouwrecht.
Quality Assurance Act relates to all formalises the contractor’s duty to 6 See n2 above.

CONSTRUCTION LAW INTERNATIONAL Volume 19 Issue 3 November 2024 7

COUNTRY UPDATES

transferring to judges the decision of a different forum, including a

whether a determinate court is foreign one, could be deemed
appropriate to solve a particular ineffective. Recently, the São Paulo
dispute. In practice, Law No 14.879 Court of Appeals invoked Law No
brings Brazil closer the doctrine of 14.879 to disregard parties’
forum non conveniens, which intention to solve their disputes in
surrounds the idea of the existence England because the ‘forum
of an ‘inadequate’ or ‘inconvenient’ chosen by the parties is totally
court.2 disconnected from the place where
the legal acts and facts took place’.4
BRAZIL The impact of Law No 14.879
on construction contracts Moving forward
Amendment to Brazil’s In the short term, the restrictions The legislative innovation at hand
Civil Procedure Code limits imposed by Law No 14.879 may create evidently requires meticulous
forum-selection clause an unwanted and unpredictable attention when drafting contracts
outcome for contracting parties. or amendments. From now on,
Matheus Barcelos
As it consists of a procedural rule, legal advisors shall ensure a clear
BMA Advogados, Rio de Janeiro
one could consider that the new law connection between the selected
matheus.barcelos@bmalaw.com.br
impacts choice of forum clauses in forum, the domicile or residence of
Liz Martins pre-existing contracts. one of the contracting parties and
BMA Advogados, Rio de Janeiro This raises specific concerns the place of the obligation. This will
liz@bmalaw.com.br regarding commercial contracts, prevent clauses from being deemed
including those involving abusive and consequently annulled,
construction, in which sophisticated preserving party autonomy and
Background
and well-advised parties often choose legal certainty.
On 4 June 2024, the Brazilian a place that may not relate to their Furthermore, as a result of Law No
Government issued Law No 14.879 domicile or to the fulfilment of the 14.879, contracting parties could
amending the forum selection rules obligation at stake. In Brazil, parties avoid submitting their disputes to
provided in the Brazilian Code of frequently select specialised courts courts, opting instead for private
Civil Procedure.1 There are several focused on commercial law matters methods such as mediation, dispute
undetermined legal concepts in (seated in São Paulo and Rio de boards and (especially) arbitration.
the new law, which opens space Janeiro) to solve controversies related In this context, parties might even be
for interpretation and may create to major projects. These courts are encouraged to opt for an emergency
– at least at this early stage – legal also commonly chosen to grant arbitrator to grant reliefs prior to the
uncertainty for those who negotiate interim and conservatory measures commencement of the proceedings,
contracts governed by Brazilian law. prior to the commencement of avoiding conflicts of jurisdiction in
Until this legislative innovation arbitral proceedings. courts when time is of the essence.
came into force, parties were free to In 2023, the Brazilian Association
choose the seat for resolving of Infrastructure and Basic Notes
contractual disputes, regardless of Industries (ABDIB) reported that 1 Law No 14.879, see www.planalto.gov.
where the parties or their obligations only 17 per cent of the ongoing br/ccivil_03/_ato2023-2026/2024/lei/
were located. Since 4 June, the infrastructure projects (led solely by L14879.htm, accessed 1 October 2024.
chosen forum must ‘be relevant’ to state governments or in association 2 In a recent judgment, Judge Sang Duk
the domicile or residence of one of with private entities) were developed Kim referred to the principle of forum
the contracting parties or to the in the states of São Paulo and Rio de non conveniens when applying Law No
place of the obligation. The new law Janeiro,3 while the majority of 14.879 (São Paulo Court of Appeals,
also establishes that filing a lawsuit in projects were underway in Brazil’s Judge Sang Duk Kim, Appeal no 1038331-
a ‘random’ court – meaning one northeast region. The new law could 25.2023.8.26.0100, 20 August 2024)
without ties to the domicile or potentially limit the parties’ freedom 3 Livro Azul da Infraestrutura (ABDIB,
residence of the parties or the legal to solve a dispute regarding a 2023), see www.abdib.org.br/wp-
transaction in question – can be construction project before a court content/uploads/2024/05/Livro-Azul-
considered an abusive practice, seated in a different state. da-Infraestrutura-Edicao-2023-2.pdf,
allowing the court to decline its Another problematic scenario accessed 1 October 2024.
jurisdiction on an ex officio basis. would be one involving foreign 4 São Paulo Court of Appeals, Judge
The purpose of these new provisions parties to a construction contract César Zalaf, Appeal no 1003898-
is to prevent forum shopping, in Brazil. In this case, the choice of 64.2023.8.26.0562, 31 July 2024.

8 CONSTRUCTION LAW INTERNATIONAL Volume 19 Issue 3 November 2024

 Aerial view of large highway in the city of Mendoza, Argentina. Credit: SobrevolandPatagoni/Adobe Stock

Regulatory changes in
Argentina that promote
infrastructure investment
Jorge Ignacio Jorge Ignacio Muratorio and Ana Belén Micciarelli, partners at O’Farrell,
Muratorio
review the main amendments recently approved to the public works
O’Farrell, Buenos
Aires
concession law in Argentina, which are intended to encourage domestic
muratorioj@
and foreign investment in public works and infrastructure.
eof.com.ar
Ana Belén Introduction Law’), significant modifications have been
Micciarelli introduced in the public works concession
O’Farrell, As from the enactment of the Law ‘Bases co n t ra c t to g e n e ra t e t h e n e c e s s a r y
Buenos Aires of and Starting Points for the Freedom conditions to encourage both domestic
of Argentineans’ (Law No 27,742, Official and foreign investments in public works
micciarellia@
Gazette 8 July 2024, hereinafter ‘Bases and infrastructure.
eof.com.ar

CONSTRUCTION LAW INTERNATIONAL Volume 19 Issue 3 November 2024 9

FEATURE ARTICLE

Legislative amendments that Individuals may access the concession of

promote investment in public works public works or infrastructure through the
and infrastructure national or international public bidding
procedure. In the latter case, it is accepted
Until now, the referred ‘public works that those who have their main business
concession’ (Law 17,520) was used for the headquarters abroad and do not have a
construction, maintenance or operation of branch office in the country may apply as
public works (roads, airports, ports, bus or bidders; at the same time, the call for bids
railroad stations, among others), which are must be made on international websites.
paid for by charging fees or tolls to their users The regime provides that, during the term
– or other remunerations – during the time of of the public works or infrastructure
their operation, which is necessary to amortise concession contract, the maintenance of the
the investment made and obtain a profit. ‘balance of the economic-financial equation’
By means of this figure – then with the taken into account at the time of its execution
reforms incorporated on the occasion of the must be guaranteed. The maintenance of
State Reform Law, No 23,696 of 1989 – bridges the contractual balance is essential for the
and interprovincial tunnels were built, as well contract to be fulfilled and integrates the
as Buenos Aires’ main long distance bus contractor’s property rights (Article 17 of
station; the city’s highway network was the National Constitution and Article 965 of
privatised; the national airport system was the National Civil and Commercial Code).
given in concession; the beaconing and
signalling of the fluvial corridor of the It is not a question of profitability, but rather the
Hydrovia was privatised, and so on.
Currently, the Bases Law has broadened
relationship between costs and benefits assumed, which
the scope of the figure so that the concession allows a reasonable profit to be obtained
becomes a concession of public works,
public infrastructure and public services in The ‘balance of the economic-financial
favour of private companies, which allow its equation’ can be defined as the situation of
construction, conservation or operation. It proportionality between the reciprocal
is admitted that a ‘specific purpose company’ benefits established by the parties at the time
is constituted, which must be constituted as of entering into the contractual relationship. It
a corporation. is not a question of ensuring a specific
The distinction between ‘public work’ and profitability, but rather the relationship
‘public infrastructure’ is that ‘public work’ between costs and benefits assumed, which
refers to any movable or immovable thing of allows a reasonable profit to be obtained.1 In
artificial construction (man-made), owned practice, the economic-financial equation of
by the state and used for general utility the contract may be altered as a consequence
purposes (hospitals, schools, etc) while of abnormal risks external to the parties or
‘public infrastructure’ refers to an asset that originated by the direct or indirect intervention
serves as ‘support’ for an activity or service of the state in the execution of the contract.
(public service or service of general interest): For example, indirect intervention is
the distribution of drinking water, gas configured through the enactment of new
distribution (gas pipeline), electricity regulations (tax, import requirements, etc)
distribution and oil pipelines, among others. that have an impact on the economic equation
Public works are state-owned; public of the contract. In Argentina, a key distorting
infrastructure can be publicly or privately factor has been inflation.2
owned (eg, telecommunications networks). We describe below the main provisions
It is possible to grant concessions for the established in the rules for the concession
operation, administration, repair, expansion, of public works or infrastructure that will
conservation or maintenance of existing make it possible to show the protection of
works, with the purpose of obtaining funds the investment.
for the construction or conservation of other As regards the term of the concession,
works that are physically, technically or works or infrastructure concessions may be
otherwise related to the former. Thus, funds granted as follows:
may be obtained from the operation of a • Fixed term: for which the estimated time
concessioned route to remodel another route required for the amortisation of the
connected to it. capital invested by the concessionaire,

10 CONSTRUCTION LAW INTERNATIONAL Volume 19 Issue 3 November 2024

 the payment of financial services, the Among the benefits to individuals, it is
recovery of maintenance, conservation, foreseen that deductions may be established
administration and operation expenses in the income tax balance to be paid by the
of the works or infrastructure and the investments of the concessionary companies.
concessionaire’s profit will be taken into The well-known ‘prerogatives of the Public
consideration. Administration’, such as the right to modify
• Variable term: sometimes it is not possible the contract and terminate it for reasons of
to establish with a sufficient degree of timeliness and illegitimacy, typical of public
approximation the volume of traffic or contracts, are attenuated. Thus, for example, it
users of the works or infrastructure under is provided that the bidding documents and
concession. In these cases, the term will the contract must foresee the grounds for
depend on the demand for the works termination of the contractual relationship,
or infrastructure effectively configured, and must contemplate the compensation in
regardless of the estimate and market cases of early termination, its scope and
studies carried out for the bidding process. method of determination and payment. It is
The retribution in favour of the private specified that in cases of termination of the
parties will be through the collection of contract for reasons of public interest, no rule
tariffs, tolls or remuneration, which may establishing a limitation of liability in favour of
be charged to the users, third parties or the the Public Administration shall be applicable.
state, and which may be revised, according to In other words, full indemnity is established.
the procedure established in the contract, to Loss of profit is recognised in the event of
preserve the economic-financial equation of unilateral early termination through no fault
the contract. Minimum revenue guarantees of the concessionaire.
may even be established (this method was The total or partial assignment of the
used in the public works concession of the contract to a third party is allowed, provided
highways of Buenos Aires). that the third party meets similar requirements
as the assignor and at least 20 per cent of the
It is specified that in cases of termination of the contract original term of the contract or of the
for reasons of public interest, no rule establishing committed investment has elapsed, whichever
occurs earlier. Likewise, the acceptance of the
a limitation of liability in favour of the Public financiers, guarantors, sureties and guarantors,
Administration shall be applicable and the authorisation of the administration
must be obtained.
It is foreseen that the contracts will include It is foreseen that in the event that the
clauses to guarantee the concessionaire’s economic-financial equation of the
income with speed and certainty of payment3 contract is broken, it must be renegotiated
to preserve the balance of the economic- in order to achieve its recomposition,
financial equation. which may include:
In turn, the regime also establishes that • modification of the term;
the national state will be released only if the • modification of the tariff;
concessionaire receives the amounts • deferral, suspension or suppression of
committed in the agreed currency. investments;
In each case, the conditions under which • authorisation to carry out new
the concessionaire may raise the exception complementary or collateral operations to
of breach of contract – exceptio non adimpleti obtain additional income;
contractus – must be established. For such • direct economic compensation through
purposes, it is foreseen that, in each case, it funds from the National Treasury; and
will be established which are the breaches of • combination of the alternatives denounced
the grantor that affect the timely payment of or others that may be compatible according
the price or remuneration of the to the characteristics of the contract.
concessionaire. Until now, this exception The regulation of the renegotiation of
was considered to be of very restrictive the contractual equation is a significant
application in contracts with the state. contribution to the legal security of the
In some cases the concession will be ‘free’ contract, since renegotiation is usual in
to the concessionaire, while in other cases long-term contracts exposed to multiple
the concessionaire may be required to make contingencies: if it is not foreseen, it may lead
a specified contribution to the state. to administrative inactivity or arbitrariness.

CONSTRUCTION LAW INTERNATIONAL Volume 19 Issue 3 November 2024 11

FEATURE ARTICLE

The renegotiation must be carried out appear in Argentina in contracting financed

within 12 months of the occurrence of the by multilateral credit agencies.
cause of the imbalance in the economic- In the event of opting for arbitration with
financial equation. In Argentina, there have extension of jurisdiction, the respective
been cases of contractual renegotiations arbitration clause must be included, which
that, due to regulatory changes and various shall be expressly approved by the President
deferrals, exceeded half of the originally or the agency of the public administration to
foreseen contractual term. which the President delegates such authority,
In cases of force majeure or actions of the and immediately reported to the Honourable
administration that result in a substantial Congress of Argentina.
breach of the economy of the concession An interesting aspect is that private
contract, the possibility of extension for the individuals may propose private initiatives
same term of the initial concession is provided for the execution of public works and
for, and that, in those cases in which the force infrastructure, provided that the financing is
majeure does not absolutely prevent the private. This allows individuals to bring
execution of the work or the continuity of its feasible and innovative proposals to the state
exploitation, the administration will ensure and to fight for their realisation.
the minimum income agreed in the contract.
This provision is important to avoid the
questioning of the granting of an extension Epilogue
that allows repairing the affectation of a
contract, as opposed to the requirement of a The reforms introduced by the Bases Law
new bidding process. The administration is tend to encourage the intervention of the
now also allowed, in order to repair the private sector in the proposal, financing and
damaged equation, to ensure the minimum execution of public works and infrastructure.
income agreed in the contract. In this sense, it is positive that greater legal
With regard to conflict resolution security and investment protection has been
mechanisms, it is established that all provided, safeguarding the maintenance of
contracts may provide for dispute prevention the economic-financial equation of the
and resolution mechanisms, conciliation contract and private initiative, while
and/or arbitration: an essential aspect that introducing alternative dispute resolution
provides an alternative that may be more mechanisms (technical panels and arbitration).
effective than the systems of exhaustion of It is expected that a large number of works
administrative procedures and subsequent and infrastructure in the areas of energy,
judicial proceedings.4 mining, telecommunications, transportation,
Thus, discrepancies of a technical or etc, will be carried out for the benefit of the
economic nature that arise between the country and for the development and
parties during the execution of the progress of its inhabitants.
concession contract may be submitted to a
technical panel or arbitration tribunal at the Notes
request of either party, and a suitable 1 Jorge I Muratorio, ‘The Public Interest in
response may be obtained with the speed Guaranteeing the Public Contractual Equation’
required for the execution of the contract. (2023) 148 Administrative Law Review, 20.
The technical panels are made up of 2 Jorge I Muratorio, ‘Impact of Inflation on Public
independent and impartial professionals of Procurement’ (2022) E La Ley, 264.
proven competence and experience in the 3 Jorge I Muratorio, ‘Payment Terms in Public
field. These bodies will be competent to Procurement’ (2021) Administrative Law Review, digital
intervene, compose and resolve disputes of a citation: ED-MMLXXX-183.
technical, contract interpretation and 4 Jorge I Muratorio, ‘Public Contract Dispute Resolution
economic or patrimonial nature that may Systems. Necessary Changes’ (2023) La Ley, digital
arise during its execution or termination, citation: TR LALEY AR/DOC/2785/2023.
applying for such purpose criteria of speed
and efficiency in the processing of conflicts This article was written by Jorge Ignacio Muratorio and Ana Belén Micciarelli,
that are compatible with the execution times partners in the Public Law and Economic Regulation Department of O’Farrell,
of the contracts. Such panels were already a law firm in Argentina, located at French 3155, First Floor, in the
provided for in the Public-Private Participation Autonomous City of Buenos Aires. The authors may be contacted at
Contracts Law No 27,328 (2016) and also muratorioj@eof.com.ar and micciarellia@eof.com.ar.

12 CONSTRUCTION LAW INTERNATIONAL Volume 19 Issue 3 November 2024

 Dubai Financial center district DIFC, United Arab Emirates. Credit: Evaldas/Adobe Stock

Expert evidence, damages and

costs: a DIFC case law update
Wala Al-Daraji Background
In Bond v Tr88,1 the Technology and Construction
University of A recent Dubai International Financial Division of DIFC decided on a dispute involving
Reading, Reading Centre Courts (DIFC) decision deals with the performance of two contracts:2 MEP and
w.al-daraji@pgr. three interesting areas of construction law: Fitout Works contracts at premises occupied
reading.ac.uk • party-appointed expert evidence; by the defendant in Blue Water, Marsa Dubai.
• general damages and loss of profit under The law of the contract is the law of Dubai and
the UAE Civil Code; and the laws of the UAE. The parties nominated
• cost recovery under DIFC Rules. DIFC as the appropriate jurisdiction.

CONSTRUCTION LAW INTERNATIONAL Volume 19 Issue 3 November 2024 13

FEATURE ARTICLE

The parties dispute the final account, • project planning software should not be used
including prolongation costs, variations, as a ‘black box’7 into which data is put and
liquidated damages and general damages. conclusions extracted that the expert cannot
Within days of the commencement of each verify or explain. This highlights the risk of
contract, the Contractor gave notice of overreliance on software to achieve a certain
delays as matters for which it asserted the result without taking into account the actual
Client is responsible. For example, it stated events of the project and its critical path;
in the notice lack of design or design • defending counter-allegations of delay is
changes. The Client reciprocated the expected from experts on both sides;
allegations of delay by the Contractor in • each party ought to produce its own
performing the contract. This pattern of analysis, and it is insufficient to argue
cross-allegations continued throughout the that the opposing party’s version has not
project. Ultimately, the Contractor claimed been established; and
for prolongation costs and variations, while • the importance of keeping and using as-
the Client counterclaimed for liquidated built records to support expert’s evidence.
damages (LDs) and loss of profit.
This article aims to analyse the three
aspects of the decision. Liquidated damages, general
damages and loss of profit

Party-appointed expert evidence The decision dealt with liquidated damages

(LDs) under the contract, and general damages
The Contractor relied on expert evidence and loss of profit under the UAE Civil Code. The
from one of its employees, whereas the contract provided for LDs of AE$10,000 per day
Client relied on an independent consultant. in the MEP contract and AE$5,500 per day in
The quality of both parties’ expert evidence the Fitout Works contract, up to a maximum of
was criticised for five reasons. First, ‘neither 10 per cent of the stated sum in the agreement.
party adduced any direct evidence of the However, the contract provided that LDs are
detailed facts upon which their respective ‘subject to the failure is exclusively attributed
cases depended’. 3 Further, the factual to the Contractor’.8 Despite the problems
evidence was given at a great level of highlighted in the Client’s appointed expert
generality, and some of it was irrelevant to evidence, his evidence accepted that there
the issues in dispute. Second, the expert’s was a concurrent delay for which both parties
conclusions made no reference ‘to any were responsible. This resulted in losing the
knowledge or experience of the sequence or counterclaim for LDs, as the contract required
manner in which the Works were performed’4 that the Contractor be the sole party responsible
and were deemed unacceptable. Third, the for the delay.
Contractor’s appointed expert failed to
address counter-allegations. Further, he project planning software should not be used as a 'black
assumed all variations not refused by the
Client to be valid. 5 Fourth, the Client’s
box' into which data is put and conclusions extracted
appointed expert took the position that the that the expert cannot verify or explain
Contractor’s delay analysis had not been
established but did not produce his own General damages may be claimed under
version.6 Fifth, the lack of as-built records UAE Civil Code Art 390 (2), which provides
became apparent in the Client’s appointed that ‘the judge may, in all cases, at the request
expert’s inability to answer when the of one of the parties, amend such an
rectification work was performed or what agreement, in order to make the amount
work was performed. assessed equal to the prejudice. Any
In summary, the decision gives guidance agreement to the contrary is void’.9 However,
to experts and appointing parties on areas as the Client failed to discharge the burden
that may affect the admissibility, relevance, of proving that the Contractor was the sole
materiality and weight of their evidence: party responsible for the delay, the court
• facts need to support the expert’s case. decided general damages could not be
If the facts are disconnected from the awarded. If there had been no concurrent
analysis, no case is being made, rather an delay, the Client may have been able to claim
illogical construct; general damages under UAE law.

14 CONSTRUCTION LAW INTERNATIONAL Volume 19 Issue 3 November 2024

 Even though there was no contractual Court’s permissionʼ. Presumably, the
provision for loss of profit claims having to Contractor was given permission, but that
be solely the responsibility of the Contractor, does not necessarily mean an employee will
the Court took a similar position to LDs: meet the test of independence, and his fees
‘obviously TR88 could not claim for lost may not be recovered.
profits if delays for which it was responsible Second, the expert’s report was not
operated concurrently with delays for which without difficulties, as highlighted above.
Bond was responsible’.10 The Client’s Third, the prolongation costs claim was
appointed expert evidence assumed a profit abandoned, to which the expert report
margin of 20 per cent ‘out of the air’,11 which related. While the decision did not refer to
he was unable to substantiate. Thus, even if DIFC rules, Rule 31.18 empowers the Court
the court entertained a loss of profit claim, to limit expert fees and expenses recovery.
the percentage needed to have come from
factual evidence such as previous profit and
loss accounts, and not a made-up figure. Conclusion

First, expert evidence must be linked to the

Cost recovery facts presented. The use of planning software
in expert reports needs to be referenced to
Third, the English cost rule applies in DIFC knowledge or experience of the sequence in
Courts pursuant to DIFC Rule 38.7, which which the works were performed. Otherwise,
provides that: the output may be of no use to the court.
‘If the Court decides to make an order Second, uncontested concurrent delays
about costs: (1) the general rule is that the can save a contractor not only from LDs but
unsuccessful party will be ordered to pay also general damages and loss of profit. This
the costs of the successful party; but (2) the was specifically provided for in the contract
Court may make a different order.ʼ12 in relation to LDs, which was extended to
The court excluded the Contractor’s general damages and loss of profit, and the
appointed expert’s report from the cost Client failed to discharge the burden of
award. It provided three reasons for this. First, proving otherwise.
the expert is not an independent consultant Third, the expert’s independence and the
but rather an employee of the Contractor. Court’s permission of an employee to
Under DIFC Rule 31.4,13 like the English Civil provide expert evidence are not the same
Procedure Rules thing. An employee’s expert evidence may
(CPR) Part 35,14 an expert’s duty to help not be a recoverable cost as he is not
the court overrides any obligation to the considered independent.
person from whom he has received
instructions or by whom he is paid. This is
impossible to achieve if the expert is an Notes
employee of the party. 1 Bond Interior Design LLC v Tr88house Restaurant and
Entertainment Center LLC [2023] DIFC TCD 001
uncontested concurrent delays can save a contractor (28 February 2024).
2 Each contract is described as one page, referring
not only from LDs but also general damages and to other documents. It is unclear whether it was a
loss of profit standard form or bespoke.
3 See n1 above, 74.
Similarly, the independence of a party- 4 Ibid, 75.
appointed expert is expected in arbitration 5 Ibid, 76.
proceedings as provided under IBA15 and 6 Ibid, 78.
International Chamber of Commerce (ICC) 7 Ibid, 75.
rules.16 How can an employee be unbiased 8 Ibid, 9.
when his income comes from the same 9 Federal Law No 5 On the Civil Transactions Law
party? It is unclear why the court permitted of the United Arab Emirates State, see https://
an employee’s evidence as that of an expert elaws.moj.gov.ae/UAE-MOJ_LC-En/00_CIVIL%20
in the first place. DIFC Rule 31.13 provides TRANSACTIONS%20AND%20PROCEDURES/
that ‘no party may call an expert or put in UAE-LC-En_1985-12-15_00005_Kait.html?val=EL1,
evidence an expert’s report without the accessed 30 July 2024.

CONSTRUCTION LAW INTERNATIONAL Volume 19 Issue 3 November 2024 15

 FEATURE ARTICLE

10 See n1 above, 95.

11 Ibid, 82.
12 Part 38, The Rules of the Dubai International Financial
Centre Courts 2014 (DIFC Courts, 2014), see www.
difccourts.ae/index.php/tools/pdf/court_rule,
accessed 31 July 2024.
13 Ibid, Part 31.
14 In England, CPR 35 provides that:
‘2.1 Expert evidence should be the independent
product of the expert uninfluenced by the
pressures of litigation.
2.2 Experts should assist the court by providing
objective, unbiased opinions on matters within
their expertise and should not assume the role
of an advocate.’
15 Article 5.2(c), IBA Rules on the Taking of Evidence in
International Arbitration (IBA, 2020) www.ibanet.
org/MediaHandler?id=def0807b-9fec-43ef-b624-
f2cb2af7cf7b, accessed 14 August 2024.
16 A r ti c l e 3 . 3 , E x p e r t Ru l es ( I C C , 2 0 1 5 ) , s e e
https://iccwbo.org/wp-content/uploads/
sites/3/2015/01/2015-ICC-Expert-Rules-ENGLISH-
version-1.pdf, accessed 14 August 2024.

The eyeWitness mobile app; seeking justice

for the worst international crimes
eyeWitness to Atrocities begins with a simple vision: a world where the perpetrators of the worst
international crimes are held accountable for their actions. As an initiative of the International Bar
Association (IBA), with the support from LexisNexis Legal & Professional, the eyeWitness to Atrocities app
provides a means of documenting human rights atrocities in a secure and verifiable way so that the
material can be used as evidence in a court of law.

Every day, around the world, human rights defenders, investigators, journalists and ordinary citizens capture photos
and video of atrocities committed by violent and oppressive states and groups. eyeWitness provides these individuals with a
tool to increase the impact of the footage they collect by ensuring the images can be authenticated and, therefore, used in
investigations or trials.

With the eyeWitness mobile app, users capture photos or videos with embedded metadata that shows where and when the
image was taken and confirms that it has not been altered. The images and accompanying verification data are encrypted
and stored in a secure gallery within the app. Users then submit this information directly to a storage database maintained by
the eyeWitness organisation, creating a trusted chain of custody. Users retain the ability to share and upload copies of their now
verifiable footage to social media or other outlets.

The eyeWitness to Atrocities app is available to download for free on Android smartphones. For more information, visit
www.eyewitnessproject.org, follow @eyewitnessorg on X, formerly Twitter, or Facebook, or watch the eyeWitness YouTube channel.

www.eyewitnessproject.org @eyewitnessorg /eyewitnesstoatrocities /eyewitnessproject

 Credit: Harsha/Adobe Stock

The Standing International

Forum of Commercial Courts
(SIFoCC)
Virginie Uniting global commercial courts to enhance best practices and uphold
Antonella
the rule of law.
Colaiuta
LMS Legal, London
virginie.colaiuta@
lmslex.com History Purpose and key objectives

Basil Thévignot Founded in 2016 by Lord Thomas, former SIFoCC addresses global challenges by
LMS Legal, London Lord Chief Justice of England and Wales, the promoting alternative dispute resolution
Standing International Forum of Commercial and facilitating knowledge-sharing among
basil.thevignot@
Courts (SIFoCC) was established to unite commercial courts. Its key objectives are:
lmslex.com
commercial courts globally. • Serving users: sharing best practices to keep
The inaugural meeting took place in pace with rapid commercial changes,
London on 4–5 May 2017, including senior benefiting businesses and markets;
judges from 25 jurisdictions. This initiative • Strengthening the rule of law: promoting
supports global efforts to strengthen the collaborative efforts of courts worldwide,
rule of law and promote international legal contributing to legal stability; and
services. Since then, SIFoCC has grown to • Supporting developing jurisdictions: enhancing
include 58 member jurisdictions and has attractiveness to investors by providing
hosted regular meetings every 18 months: effective commercial dispute resolution.
New York in 2019, Singapore in 2021, This collaboration enhances standards,
Sydney in 2022, and most recently Doha in ensures access to justice and upholds the
April 2024. rule of law: offering predictability, reducing
uncertainty and inspiring investor confidence.

CONSTRUCTION LAW INTERNATIONAL Volume 19 Issue 3 November 2024 17

FEATURE ARTICLE

Importance of commercial law an interconnected system rather than a set of

and courts fragmented rules.

Commercial law governs business activities,

both domestic and international. Commercial Addressing multi-jurisdictional issues
courts ensure the enforcement of contracts
and protection of interests. However, the SIFoCC regularly releases comparative law
rise of international commerce presents memoranda that address multi-jurisdictional
challenges that no single jurisdiction can issues. In March 2024, SIFoCC published
address alone. International collaboration is its Multilateral Memorandum on Enforcement
essential to manage costs, maintain standards, of Commercial Judgments for Money, 3 a
adapt to business and technological changes, comprehensive analysis of enforcement
and provide access to justice. practices across more than 30 jurisdictions,
including Australia, Brazil, Canada, China,
Germany, Japan, Singapore, South Korea,
Judicial Observation Programme Uganda and the United Kingdom. This
memorandum highlights how these
The Judicial Observation Programme, jurisdictions can enforce each other’s
a unique initiative, offers an intensive commercial judgments, reinforcing the rule
one-week mentorship in a SIFoCC host of law and promoting global legal cooperation.
jurisdiction. Typically involving five to
six participants nominated by their Chief
Justice, this peer-to-peer engagement shares Focus on construction disputes
best practices and supports developing
countries. Participants contribute to SIFoCC places significant emphasis on
judicial relationships, fostering continuous construction disputes, with members
knowledge exchange and application. frequently speaking and publishing on
related topics. For instance, the Honourable
Chief Justice Sundaresh Menon of the
Promoting global legal standards: Singapore Supreme Court, a prominent
the work of SIFoCC SIFoCC member, recently highlighted the
role of international commercial courts
SIFoCC is dedicated to enhancing global
legal standards through best practices,
comprehensive reports, publications and the rise of international commerce presents challenges
speeches, all of which are accessible on its that no single jurisdiction can address alone
website.1

(ICCs) in the context of complex construction

Contributions to legal development disputes, ensuring robust case management
and addressing due process concerns. 4
In October 2022, SIFoCC released a significant ICCs offer unique advantages for resolving
report following its fourth full meeting, complex international construction disputes,
hosted by the Federal Court of Australia and including procedural flexibility, rights
the Supreme Court of New South Wales.2 This of audience for foreign counsel and the
meeting focused on crucial themes such as: ability to join third parties. The quality of
• integrated systems of dispute resolution; decision-makers in ICCs is assured, featuring
• management of increasingly complex internationally renowned judges.
disputes;
• f u t u re i s s u e s fo r co r p o ra t e l eg a l
responsibility; and SIFoCC and alternative dispute resolution
• international jurisdictional conflicts.
T h e r e p o r t u n d e r s c o r e s S I Fo C C ’ s Alternative dispute resolution (ADR) methods
commitment to supporting a globalised require support from judicial courts before,
commercial justice system, promoting the during and after the parties have their dispute
convergence of commercial laws worldwide, resolved through such methods. SIFoCC
and viewing international commercial law as actively promotes the development and

18 CONSTRUCTION LAW INTERNATIONAL Volume 19 Issue 3 November 2024

 integration of ADR mechanisms in different enforceability of ADR decisions. These efforts
jurisdictions with the support provided by are particularly beneficial in complex cross-
national courts. This strategic collaboration border sectors like construction, where
enhances the efficiency and enforceability of reliable dispute resolution is critical for
ADR processes, making them more reliable maintaining efficient operations and
and accessible for resolving disputes. ensuring a stable investment environment.
To ensure consistency and fairness in the
application of ADR across different
jurisdictions, SIFoCC advocates for the Conclusion
creation of uniform rules. Standardising
these rules helps to eliminate discrepancies SIFoCC’s initiatives encourage collaboration
and ensures a predictable and stable among commercial courts, promote the sharing
environment for ADR, which is crucial for of best practices, and support the development
businesses operating in multiple countries. of a cohesive and effective global commercial
As part of its ongoing efforts, SIFoCC justice system. By addressing the challenges
released International Best Practice in Case of an interconnected world, SIFoCC plays
Management during its fifth full meeting in a pivotal role in enhancing legal standards,
Doha on 20 April 2024.5 This document ensuring access to justice, and supporting
examines how courts in various jurisdictions global economic stability and prosperity.
support ADR mechanisms and promotes For more information on SIFoCC’s work
best practices for managing complex and to access its reports, publications and
disputes. The analysis provided in this speeches, visit its official website.
publication serves as a valuable resource for
courts worldwide, helping them to enhance
their ADR capabilities and deliver more
efficient justice. Notes
Construction projects in particular are 1 ‘Resources’ (SIFoCC), see https://sifocc.org/
known for being highly litigious due to their resources, accessed 1 October 2024.
complexity and the frequent involvement of 2 Report on the 4th full SIFoCC Meeting (SIFoCC, 28
parties from different jurisdictions. These October 2022), see https://sifocc.org/sifocc_
projects often face numerous disputes documents/report-on-the-4th-full-sifocc-meeting,
arising from contractual disagreements, accessed 1 October 2024.
delays and other issues. By promoting 3 SIFoCC Memorandum on Enforcement 2nd – With
collaboration among courts and encouraging International Working Group Commentary (SIFoCC,
standardised ADR practices, SIFoCC ensures 13 March 2024), see https://sifocc.org/sifocc_
legal certainty and provides strong support documents/sifocc-memorandum-on-enforcement-
for resolving construction disputes through 2nd-with-international-working-group-commentary,
ADR. This approach not only improves the accessed 1 October 2024.
resolution process for such disputes but also 4 The role of Commercial Courts in the management
boosts investor confidence by demonstrating of complex disputes (SIFoCC, 9 April 2021), see
a commitment to effective and reliable https://sifocc.org/sifocc_documents/the-role-of-
dispute resolution mechanisms. commercial-courts-in-the-management-of-complex-
In summary, SIFoCC’s initiatives to support disputes/ accessed 1 October 2024.
ADR through judicial collaboration and the 5 ‘SIFoCC’s 5th full meeting’ (SIFoCC, 20–21 April
establishment of uniform rules significantly 2024), see https://sifocc-events.org/sifoccs-5th-full-
enhance the predictability, efficiency and meeting#programme accessed 1 October 2024.

CONSTRUCTION LAW INTERNATIONAL Volume 19 Issue 3 November 2024 19

FEATURE ARTICLE

Credit: gearstd

A growing need for international M Saleh Jaberi

ESK, Tehran
Jaberi@
enforcement of construction esklawfirm.com
Liam Hendry

adjudication decisions Archor, Colchester

liam.hendry@
archor.co.uk

‘[Adjudication] is not an alternative to growth rate by over one percentage point.2

anything; for most construction disputes, it is At the same time, the construction industry
the only game in town.’ 1 has become increasingly globalised in the
modern era. Throughout history, there has
never been a time when so many construction
Introduction companies from diverse backgrounds and
regions have ventured outside of their
According to the Global Construction 2030 domestic markets to undertake work in
forecast, construction output is predicted foreign countries.3 Clear examples of such
to increase by 85 per cent to reach $15.5tn projects are the Panama Canal and the Suez
by the year 2030. The report also forecasts Canal, which were both constructed by
an average global construction growth rate foreign contractors.
of 3.9 per cent per year until 2030, which Despite the best efforts and intentions,
is projected to exceed the global GDP construction projects frequently encounter

20 CONSTRUCTION LAW INTERNATIONAL Volume 19 Issue 3 November 2024

 disputes. These disputes have the potential followed by similar laws in countries such
to disrupt the projects’ progress, impact as Australia, Ireland, Malaysia, New
stakeholder relationships, affect the client’s Zealand and Singapore. These legislations
budgets, and erode the contractors’ profit.4 created ‘statutory adjudication’ that
The potential for lengthy trials and vast legal significantly reformed the freedom of
expenses in construction and engineering contracting parties to mutually agree upon
disputes is notorious,5 which makes disputing their respective rights and obligations in
parties look for alternative methods – the relation to a construction project, with the
most popular of which is arbitration. aim of operating as a fast-track form of
International construction disputes dispute resolution that gives parties to a
account for a growing proportion of the construction contract a quick and
cases arbitrated in international commercial provisionally binding decision as to their
arbitration. These disputes represent rights and obligations.7
between 14 to 20 per cent of all the cases While there are similarities between
referred to the International Chamber of statutory adjudication and arbitration,
Commerce (ICC) annually.6 As the yearly there are also several key differences. The
volume of international construction primary distinction is that the decision
projects continues to rise, arbitration will made by an adjudicator has a provisional or
remain a significant method for resolving temporary nature, whereas the decision of
construction-related disputes. However, an arbitrator is final, subject only to a
institutional arbitration is becoming less limited scope of appeal rights. However, it
viable as the primary dispute resolution is well established that the grounds for
method in international construction due to resisting enforcement of an adjudication
the industry’s unique characteristics. decision are also limited. A party must
Construction disputes involve extensive either persuade the court that: (1) the
documentation and technical issues adjudicator had no jurisdiction to
requiring specialised expertise, as well as the determine the dispute; or (2) the
need for a quick resolution to avoid adjudicator has materially breached the
additional time-related costs. While rules of natural justice.8 A party may also
arbitration remains the ultimate dispute issue proceedings under Part 8 of the Civil
Procedure Rules (CPR) to effectively
The New York Convention requires courts [to] overturn an adjudicator’s decision.9
recognise and enforce arbitration awards [...] Another key difference is enforceability
in the international realm. The Convention
However, an adjudication decision lacks this on the Recognition and Enforcement of
international enforceability feature Foreign Arbitral Awards, commonly known
as the New York Convention 1958, requires
resolution method in international courts of contracting states to give effect to
construction contracts, it can no longer private agreements to arbitrate, recognise
serve as the primary approach. Institutional and enforce arbitration awards made in
arbitration has become overly formalised, other contracting states. A large number of
time consuming and lacking in the technical jurisdictions have adhered to the New York
skills required to effectively resolve Convention, paving the way for enforcing
construction disputes. Additionally, the an arbitration award in almost any country.10
expenses associated with institutional However, an adjudication decision lacks
arbitration are often higher compared to this international enforceability feature
litigation. Thus, the international and, for example, it is not clear how an
construction industry has developed an adjudication decision issued in the UK or
innovative primary dispute resolution Australia may be enforced in the United
mechanism called the Dispute Adjudication States or other countries.
Board (DAB). The DAB is a panel of technical With the expansion of adjudication in the
experts who are intricately familiar with the construction industry, a need for
specific construction project and its contract, international recognition and enforcement
and they adjudicate quasi-binding disputes of adjudication decisions is growing. This
arising from the contract. article discusses the available frameworks for
In the 1990s, the United Kingdom the international enforcement of statutory
enacted legislation that was subsequently adjudication decisions.

CONSTRUCTION LAW INTERNATIONAL Volume 19 Issue 3 November 2024 21

FEATURE ARTICLE

Converting an adjudication decision Converting an adjudication decision

to an arbitration award to a court judgment

Adjudication is described as a ‘pay now, argue Following the issuance of an adjudication

later’11 mechanism that seeks to maintain decision and if the losing party does not
cash flow during construction projects by comply with it voluntarily, the next step is to
providing a cost-effective and speedy means pursue enforcement of the decision in the
of determining disputes on a binding, but fast-track procedure in the UK Technology
not final basis. Article 108 of the UK Housing and Construction Court (TCC). After the claim
Grants, Construction and Regeneration Act documents are filed, a TCC judge will typically
1996 states: address the application within three business
‘The contract shall provide that the days. The judge will then provide instructions
decision of the adjudicator is binding regarding the filing of the acknowledgment of
until the dispute is finally determined by service, any additional evidence that may be
legal proceedings, by arbitration (if the required, and the date for the enforcement
contract provides for arbitration or the hearing. This hearing is usually scheduled for
parties otherwise agree to arbitration) or the first available court date after 28 days from
by agreement.’ the date of the order.14 The court will generally
In Joint Contracts Tribunal (JCT) and New not interfere with the adjudicator’s decision
Engineering Contract (NEC) standard unless specific circumstances can be proven, ie,
forms, and in many bespoke construction that the adjudicator did not have jurisdiction
contracts, a provision that requires parties to or there has been a material breach of the rules
submit their dispute to arbitration following of natural justice.15 Enforcing an adjudicator’s
an adjudication determination is very decision means that it will be converted into
common.12 This provides an opportunity for a court order.
the winning party to convert the adjudication
decision into an arbitration award to enjoy seeking conversion of an adjudication decision into
its international enforceability through
the New York Convention. However, an arbitration award allows the unsuccessful party the
this solution faces two main issues. First, opportunity to raise arguments on the underlying merits
arbitration is a dispute resolution method
and the arbitrators have to follow a specific
of the dispute
procedure to issue an award. Article
5 of the New York Convention states Once the court judgment has been issued,
that recognition and enforcement of the some international conventions and treaties
award may be refused if ‘the party against help the enforcement of the judgment in
whom the award is invoked was not given other countries. Prior to the UK’s departure
proper notice of the appointment of the from the European Union, such enforcement
arbitrator or of the arbitration proceedings in relation to other EU countries could be
or was otherwise unable to present his done by the Brussels Recast Regulation.16
case’. These time-consuming procedural These regulations no longer apply as of 1
requirements undermine the fast-track January 2021 and have been replaced by
nature of adjudication and adversely impact legislation giving effect to the Hague
the cash flow of contractors. Convention on Choice of Court Agreements
Second, seeking conversion of an 2005 (the ‘Hague Convention’). The UK has
adjudication decision into an arbitration also requested to accede to the Lugano
award allows the unsuccessful party the Convention, which is very similar to the
opportunity to raise arguments on the Brussels Recast Regulation, but its accession
underlying merits of the dispute that oblige has yet to be agreed by the EU. In the
arbitrators to review all claims and meantime, the Hague Convention rules will
documents to issue an award.13 This also apply to cross-border disputes involving EU
prolongs the enforcement process, which is countries and certain other jurisdictions
inconsistent with the purpose of adjudication including the US. On 12 January 2024, the UK
in providing a cost-effective and efficient way signed the 2019 Hague Judgments Convention
to resolve construction disputes. on the Recognition and Enforcement of
Foreign Judgments in Civil and Commercial
Matters (‘The Judgments Convention’). The

22 CONSTRUCTION LAW INTERNATIONAL Volume 19 Issue 3 November 2024

 Judgments Convention will differ from but inaugural meeting of 2024 also allocated
complement the 2005 Hague Convention on time for adjudication. WGII is currently
Choice of Court Agreements. There are also working on a proposal made during its 68th
bilateral treaties for the enforcement of session, where delegates recommended
judgments such as the ‘1994 Reciprocal concentrating on ‘facilitating the use of
Recognition and Enforcement of Judgments adjudication in the context of long-term
in Civil and Commercial Matters Treaty’ projects, in particular construction
between the UK and Australia which provides projects’.20 WGII thus focused on
for the mutual recognition of civil and adjudication as a mechanism to accelerate
commercial judgments involving the payment proceedings and to provide provisional
of money, except judgments concerning taxes enforcement of decisions, which would be
or other charges, or orders requiring the subject to review by the same tribunal or
payment of maintenance. another arbitral tribunal.21
At the 76th session, the Secretariat came
Working Group II’s decision to use model clauses up with a model clause in the form of an
Expedited Arbitration. It explained that:
instead of model legislation appears to have missed the ‘Recognizing the importance of dispute
chance to establish a comprehensive and harmonised resolution mechanisms that are particularly
suitable for long-term contracts, the
legal framework for statutory adjudication Model Clause on Adjudication enables
parties involved in long-term contracts to
The UK courts maintain the speedy nature incorporate a dispute resolution process that
of adjudication by issuing a summary ensures prompt decisions on disputes arising
judgment; when an adjudication decision is from infrastructure or similarly complex
converted to a judgment, it can be enforced projects. While the idea derives from
in several other countries based on adjudication as used in construction cases,
international conventions and treaties. the aim of the Model Clause is to provide
However, the contracting parties of these for adjudication for all types of long-term
conventions are far fewer than the New York and complex contracts. The clause foresees
Convention,17 and the enforcement a mechanism to enforce the decision by the
procedure seems to be more complicated adjudicator through a highly expedited
than enforcing an arbitration award.18 arbitration using the Model Clause on
Highly Expedited Arbitration.’22
Article 1(5) of the UNCITRAL Arbitration
UNCITRAL’s work on adjudication Rules incorporates the Expedited Rules,
which are presented as an appendix to the
In February 2022, the United Nations UNCITRAL Arbitration Rules. The phrase
Commission on International Trade Law ‘where the parties so agree’ in that paragraph
(UNCITRAL) Secretariat held that: emphasises the need for the parties’ express
‘In jurisdictions without statutory consent for the Expedited Rules to apply to
adjudication, adjudication remains the arbitration. Expedited arbitration is a
available on a contractual basis. In these streamlined and simplified procedure with a
jurisdictions, the main issue is the lack of a shortened timeframe, which makes it possible
framework regarding the enforceability of for the parties to reach a final resolution of the
decisions by adjudicators.’19 dispute in a cost- and time-effective manner.
The Secretariat then formulated a set of However, WGII’s approach has not been
questions to be addressed through its work. immune from criticism.
First, it explored whether a harmonised Working Group II’s decision to use model
legal framework to enable the international clauses instead of model legislation appears
application of adjudication would be desirable to have missed the chance to establish a
and viable. Secondly, it inquired about how comprehensive and harmonised legal
adjudication decisions could be enforced framework for statutory adjudication. The
while still allowing for potential challenges. common law experience demonstrates that
From 12–16 February 2024, WGII the success of statutory adjudication largely
(Working Group II) convened at the United stems from its integration with the court
Nations headquarters for its 79th session. In system, which guarantees the enforceability
keeping with the previous sessions, the of the adjudicator’s rulings. Drafting a

CONSTRUCTION LAW INTERNATIONAL Volume 19 Issue 3 November 2024 23

FEATURE ARTICLE

model law of adjudication could have been arbitration, rather than paving the way for
an ideal opportunity to set an international enforcing statutory adjudication decisions.
standard, thereby promoting uniformity
across different legal jurisdictions.
Furthermore, even if expedited arbitration Notes
appears to be one of the best solutions to 1 John Doyle Construction Ltd v Erith Contractors Ltd [2021]
reproduce adjudication in a cross-border EWCA Civ 1452, at [29], per Lord Justice Coulson.
context, this option entails a risk as the legal 2 Graham Robinson, ‘Global construction market to
nature and enforceability of an award grow $8 trillion by 2030: driven by China, US and
rendered under expedited arbitration is still India’ (Global Construction Perspectives and Oxford
subject to debate.23 Economics), available at: https://myice.ice.org.uk/
ICEDevelopmentWebPortal/media/documents/
news/ice%20news/global-construction-press-
Conclusion release.pdf, accessed 1 October 2024.
3 Roberto Hernandez-Garcia, ‘Globalization of
A fast and relatively inexpensive means of Construction’, in Wendy Kennedy Venoit (ed),
dispute resolution, adjudication can help International construction law: a guide for cross-border
resolve interim payment disputes and keep transactions and legal disputes (2009, American Bar
projects moving. In the UK, 25 years after Association), 5. See also AB Ngowi et al, ‘The
its incorporation in the 1996 Construction globalisation of the construction industry – a review’,
Act, the UK Supreme Court has endorsed 40 (2005), Building and Environment, 135–141.
adjudication of construction disputes as ‘a 4 Janine Stewart, et al, ‘Adjudicator jurisdiction
conspicuously successful addition to the across jurisdictions’ 16(3) 2021, Construction Law
range of dispute resolution mechanisms International, 17–18.
available for use in what used to be an overly 5 See, eg, Baulderstone Hornibrook Engineering Pty Ltd v
adversarial, litigious environment’.24 As more Gordian Runoff Ltd [2005] NSWSC 1167. In McSpedden
contractors get involved in international v Hartnett (1942) 42 SR (NSW) 116, which concerned
construction projects, the enforceability of an interlocutory application for particulars of a
adjudication decisions in other countries defence in a final account dispute, Jordan CJ held
remains an issue. Two major solutions can be (at 117): ‘It is deplorable that the parties should
proposed, namely converting an adjudication have been unable to arrive at a compromise. Anyone
decision to an arbitration award or converting familiar with this type of action can foresee that it
it to a court judgment. will almost certainly involve considerable loss to the
While applying for an arbitration award ultimately successful party, and perhaps ruinous loss
after receiving an adjudication decision can to the loser.’ See also at 124, per Halse Rogers J.
help the winning party to benefit from the 6 Bryan M Seifert, ‘International Construction Dispute
New York Convention and enforce the award Adjudication under International Federation of
in a foreign country, the time-consuming Consulting Engineers Conditions of Contract and the
arbitration procedure and the obligation of Dispute Adjudication Board’, 131(2) 2005, Journal of
the arbitration tribunal to hear all the claims Professional Issues in Engineering Education and Practice, 149.
regarding the merit of the case would 7 Julian Bailey, Construction Law: Volume II (2nd edn,
undermine the fast-track nature of Routledge, 2016) 1715.
adjudication. On the other hand, turning an 8 Discain Project Services Ltd v Opecprime Development Ltd
adjudication decision into a court judgment [2001] EWHC Technology 435. Rsl (South West) Ltd v
seems to be a better solution because the UK Stansell Ltd [2003] EWHC 1390 (TCC). Ellis Building
courts maintain the speedy nature of the Contractors Ltd v Goldstein [2011] EWHC 269 (TCC).
award and the judgment can be enforced by Fastrack Contractors Ltd v Morrison Construction Ltd &
means of related international conventions; Anor [2000] EWHC Technology 177.
though the coverage of these conventions is 9 Paragraph 9.2.1 of the Revised TCC Guide, 2022. See
not as wide as New York Convention on also Sleaford Building Services Limited (‘SBS’) v Isoplus Piping
enforcement of arbitral awards. Systems Limited (‘Isoplus’) [2023] EWHC 969 (TCC).
UNCITRAL’s WGII has also recognised the 10 There are 172 contracting states. See www.
necessity of enforcing adjudication decisions newyorkconvention.org/contracting-states, accessed
and attempted to design a framework for a 1 October 2024.
fast-track process to deal with this issue. 11 ‘Pay now argue later’ is a phrase which has appeared
However, the WGII’s focus has been on the in a number of authorities, and refers to the fact that
creation of a new expedited model of an adjudicator’s decision has a curious status at law,

24 CONSTRUCTION LAW INTERNATIONAL Volume 19 Issue 3 November 2024

 being one of so-called ‘temporary finality’. See eg, J 18 See eg, Bernardo Ruiz Lima & Antonio de la Campa
Tomlinson Ltd v Balfour Beatty Group Ltd [2020] EWHC Cervera, ‘Enforcement of Judgments from the
1483 (TCC) at 10; RHP Merchants and Construction Ltd v United Kingdom in Civil and Commercial Matters
Treforest Property Company Ltd [2021] EWHC B40 (TCC). in Spain’ (Penningtons Law, 1 February 2024), www.
12 It should be noted that, under the FIDIC conditions penningtonslaw.com/news-publications/latest-
(Clause 21), the Dispute Avoidance/Adjudication news/2024/enforcement-of-judgments-from-the-
Board’s decision becomes final and binding unless united-kingdom-in-civil-and-commercial-matters-in-
one or both parties issue a ‘Notice of Dissatisfaction’ spain, accessed 1 October 2024.
with the DAAB’s decision; the dispute can only 19 United Nations Commission on International Trade
be submitted to arbitration if such a Notice of Law, 75th session (New York, 14–18 February 2022), 9.
Dissatisfaction has been filed within the time limit. 20 UN Report of Working Group II (Dispute Settlement)
13 Sir Vivian Ramsey, ‘A View from the Bench’, 13(1) on the work of its 68th session (New York, 5–9
2018, Construction Law International, 74. Also see FIDIC February 2018), 152.
conditions, Sub-Clause 21.6: ‘The arbitrator(s) shall have 21 Ibid, 161.
full power to open up, review and revise any certificate, 22 United Nations Commission on International Trade
determination (other than a final and binding Law Working Group II (Dispute Settlement) 79th
determination), instruction, opinion or valuation of the session (New York, 12–16 February 2024), 19 (6).
Engineer, and any decision of the DAAB (other than a 23 In the case of Nobles Resources Pte Ltd v Good Credit
final and binding decision) relevant to the dispute.’ International Trade Co Ltd (2016) Hu 01 Xie Wai Ren
14 T h e cu r re n t p ra c ti ca l t u rn a ro u n d ti m e i s No 1, a Shanghai court refused to enforce a SIAC
approximately eight to ten weeks, owing to the high award passed under the expedited procedure (Rules
workload of the TCC. of 2013). The court ruled that it is not in consonance
15 In the first enforcement case Macob Civil Engineering Ltd with the intention of the parties and it does not
v Morrison Construction Ltd [1999] EWHC Technology uphold party autonomy.
254, the court considered a claim of alleged procedural 24 Bresco Electrical Services Ltd (In Liquidation) v Michael J
error by the adjudicator, and dismissed the claim Lonsdale (Electrical) Ltd [2020] UKSC 25, 10.
suggesting that the rapid nature of the adjudication
process would undoubtedly result in some procedural
errors. The case of Carillion Construction Ltd v Devonport
Royal Dockyard [2005] EWHC 778 (TCC) further
confirmed that the adjudicator’s decision must be
enforced even if the adjudicator has made an error of Dr M Saleh Jaberi is an attorney at law and a
procedure, facts, or law. partner at ESK Law Firm in Tehran. He is also the
16 Regulation (EU) No 1215/2012 of the European author of the book Construction Law and is actively
Parliament and of the Council of 12 December 2012, involved in construction contracts. He can be
on jurisdiction and the recognition and enforcement contacted at Jaberi@esklawfirm.com.
of judgments in civil and commercial matters. Liam Hendry is an Associate Construction Solicitor
17 The contracting parties of Hague Convention are at Archor LLP in Colchester, UK, who helps
currently 34 countries and the members of the construction clients in adjudication and dispute
Judgments Convention is 29; while the contracting resolution. He can be contacted at liam.hendry@
archor.co.uk.
parties of NY Convention is 172.

CONSTRUCTION LAW INTERNATIONAL Volume 19 Issue 3 November 2024 25

FEATURE ARTICLE

Credit: Natascha/Adobe Stock

Risk management and Emilio Linde-

Arias
Exponent, London

contractual risk allocation elindearias@

exponent.com

in subsea site investigations Risteard de

Paor
Herbert Smith
and installation activities for Freehills Spain,
Madrid

offshore wind farms

Risteard.dePaor@
hsf.com

S ince the establishment of the inaugural

offshore wind farm at Vindeby, Denmark
in 1991, there have been tremendous
Importantly, offshore wind turbines can be much
larger than their onshore counterparts and the
largest have rotor diameters of nearly 300m,
advancements in the field. Modern wind covering a maximum swept area equivalent to
turbines have increased considerably in size nine soccer pitches.1 This requires cable laying,
and are now positioned further offshore. the utilisation of innovative foundation types,

26 CONSTRUCTION LAW INTERNATIONAL Volume 19 Issue 3 November 2024

 and poses several subsea engineering challenges can lead to vessels moving to another project,
with potential cost and time consequences for thus compounding project delay.
project developers.
This article focuses on subsea
engineering-related risks and their Anchoring point to the seabed and
investigation in the design stage, leaving adverse ground conditions
to one side other risks such as regulatory
and supply chain risks, and contracted Foundations typically account for 35 per cent
offtake arrangements which, in sum, leave of the total cost of an offshore wind farm.
little margin for error on these projects. The turbines may be supported by any of a
During the design phase, it is essential to variety of foundations (gravity base, suction
understand the ground conditions. Site caisson, monopile, tripod or jacket/lattice
investigations thus require ground foundations – collectively categorised as
sampling and in situ tests. However, these grounded structures) or may use floating
explorations come with their own risks platforms through anchors that moor the
and challenges, potentially resulting in turbines. Generally, grounded structures are
incomplete or inaccurate information used for shallow waters, up to 60m depth,
about the ground conditions and causing while floating systems are used for deeper
delay and additional costs. waters.3 Monopiles, due to their simplicity in
shape and straightforward manufacture, have
been the industry-preferred foundation type.4
The importance of collecting Geological conditions are a critical factor in
geotechnical data at an early stage choosing the appropriate foundation type.
Differing or adverse ground conditions have
Planning and implementing a geotechnical proven to be a significant risk that can impact
investigation for offshore wind farms the installation of the turbines. For example,
introduces a unique set of complexities. soils with unexpectedly low strength can
Nevertheless, some developers fail to necessitate deeper pile penetration for the
understand the importance of collecting foundation, whereas unforeseen excessively
geotechnical data from the outset. During hard layers may hinder pile drivability. Even
the planning stage of a wind project, a more simple gravity-based structures demand
primary aim of subsea surveys is to secure a relatively level seabed and can require
environmental consents by identifying extensive seabed preparation, potentially
protected marine species and habitats. This escalating project costs.5 The anchoring of
also feeds into determining the project site floating structures can also be affected by
location. However, these surveys typically do ground risks such as early refusal due to
not prioritise the collection of geotechnical obstructions or presence of rock.6
data, and the consideration of project-
specific hazards, to undertake investigations
and guide the design.2 Cable laying

these explorations come with their own risks and Cable laying is another activity prone to
challenges, potentially resulting in incomplete or disruption due to ground conditions. It
involves laying and burying high-voltage
inaccurate information about the ground conditions cables on the seabed to connect the wind
and causing delay and additional costs turbines to each other and to the offshore
substation. Depending on seabed conditions,
Offshore site investigation demands the level of protection or relevant type of
specialised equipment capable of operating hazard, the burial depth of several wind farm
under significant pressures and depths. cables is typically in the range of 0.5–2 m. This
Additionally, these operations are costly and process requires knowledge of the seabed
time-intensive, requiring efficient strategies composition to adopt the best installation
to minimise vessel usage and personnel method. Indeed, it is reported that around 80
deployment. These operations are planned per cent of insurance claims in these projects
during good weather seasons which means result from issues during cable installations,
that specialised vessels are in high demand which brings cable-laying contracts into focus
at the relevant times; any unexpected delays as an area of risk mitigation.7

CONSTRUCTION LAW INTERNATIONAL Volume 19 Issue 3 November 2024 27

FEATURE ARTICLE

To mitigate these ground risks, the In situ tests allow direct measurements of
fundamental challenge, similar to onshore specific soil properties. The cone penetration
projects, lies in accurately predicting test (CPT) involves pushing an instrumented
ground conditions despite inherent cone into the seabed using a rod. This method
uncertainty in the behaviour of the soil in allows for direct measurement of specific soil
terms of spatial variability. properties, and it can be conducted from a
platform or a vessel. However, the presence of
boulders can cause early refusal, impacting
Non-intrusive and intrusive the test’s effectiveness.8
techniques each pose challenges Offshore ground investigations frequently
encounter delays when unsuitable equipment
The offshore environment itself adds layers of is used. For instance, deploying the wrong
complexity to geotechnical site investigations, type of vessel can lead to operational
especially for seabed sampling. Non-intrusive inefficiencies. Employing incorrect sampling
techniques such as remote sensing and techniques can result in poor-quality samples,
geophysical surveys, typically conducted which may necessitate repeating the sampling
during the planning and feasibility stages, process. These issues can significantly hinder
offer a broader view of the underwater the progress of the investigation and extend
geology: the data should be sufficient to the overall timeline.
demonstrate the suitability of preferred
design concepts. However, soil properties and
profiles obtained with non-intrusive methods Use of new technologies
are an interpretation from the data collected
and cannot be directly observed. Ground In response to various challenges, the
truthing with intrusive investigation of the offshore wind industry has proactively
seabed is still required for the validation of adopted new technologies to improve
the geotechnical model. efficiency and the quality of investigations.
Intrusive investigations require a This includes employing remotely operated
deployment method. For depths under vehicles (ROVs) that can be controlled from
20m, a standard rig from jack-up platforms onshore, minimising the need for specialised
or anchored barges can be used. In deeper personnel at sea. Additionally, the industry
or severe conditions, vessels with dynamic has adapted onshore technologies like sonic
positioning are required. These deployment drilling that can allow a continuous sampling
systems are exposed to harsh sea conditions of soft soils and coring of rocks if encountered.
such as strong currents and high waves, This method is potentially suitable for all
which can degrade data quality, delay the types of geological conditions. There has also
operations and endanger operational safety. been a push to integrate multiple operational
In addition, maintaining the stability of techniques into a single seabed rig, thereby
survey vessels in such conditions is reducing the time and resources spent on
challenging, resulting in errors in offshore vessels.
positioning. Vessel selection is critical, since
they are required to operate in the foreseen Innovating in offshore construction carries inherent risks
adverse weather. Use of an unsuitable ship
can result in the termination of operations that can lead to increased costs and potential budget
due to poor sea conditions. overruns and delays if the technologies fail to deliver
Geotechnical site surveys for offshore
wind projects typically require penetration Innovating in offshore construction carries
to depths greater than 10m, achievable inherent risks that can lead to increased
with drilling of boreholes. Depending on costs and potential budget overruns and
the ground conditions, some sampling delays if the technologies fail to deliver. The
methods are more suitable than others. risks include technological reliability issues,
For example, piston samplers are where new tools may not perform as
impractical for sand. In cases such as expected, due, for example, to inadequate
boulder clays and cemented soils, rock testing or testing under unrepresentative
coring techniques may be necessary. Using conditions, or to particularly harsh
the wrong technique can lead to poor conditions that were not factored into the
sample quality or low recovery. technology’s design. Implementing new

28 CONSTRUCTION LAW INTERNATIONAL Volume 19 Issue 3 November 2024

 methods adds complexity, requiring contractor should less than the allowance
specialised skills needed for new end up being required). Should the adverse
technologies. Finally, unforeseen safety risks weather exceed the schedule allowance, the
and environmental impacts in sensitive developer agrees to issue a variation to the
marine ecosystems can also arise. schedule, and to increase the contract price
by a certain amount for each additional day
of adverse weather. Where weather windows
Addressing risk in the contract are used to delimit responsibility, it is
important to clearly define the windows and
To help prevent disputes, it is crucial to the criteria for time extension relief as well
thoroughly assess the risks and incorporate as how knock-on delays are dealt with.
appropriate treatment into the contractual Clauses that seek to impose liability (such as
framework, ensuring that expectations delay liquidated damages) on one contractor
regarding quality, timing and costs are met. due to non-concurrent delay of an interface
Importantly, there is still no standard form contractor may be unenforceable as a penalty
contract available which specifically deals depending on the jurisdiction.
with offshore wind projects, although FIDIC As regards subsea condition risk, marine
has announced that it will be publishing survey contracts typically contain a clause
such a contract near the end of 2025. deeming the contractor to have informed
Therefore, most contracts in this space are itself of those conditions, at least to the extent
(often heavily) modified FIDIC or Leading the information has been provided by the
Offshore Energy Industry Competitiveness developer. In the case of cable-laying contracts
(LOGIC) forms. (ie, where separate to the route survey
contract), they typically contain clauses which
Importantly, there is still no standard form provide for an allowance should subsea
contract available which specifically deals with conditions necessitate cable rerouting,
though this will of course be limited. The
offshore wind projects contractor also typically provides an
indemnity in respect of any damage the
These modifications are unsurprising, contractor causes to the subsea environment.
given that offshore projects are typically In offshore site investigation contracts, it is
procured in a disaggregated manner, where vital to ensure that the explorations adhere to
multiple contracts are awarded across a specified quality standards. Performance
range of specialist contractors and criteria should be clearly defined for both the
equipment suppliers, with the project quality of the outcomes (such as sample
owner or developer managing the work recovery rates) and the capabilities of the
distribution rather than an engineering, subsea rigs and vessels (including force and
procurement and construction (EPC) torque specifications, as well as the vessel’s
contract serving this function. resilience to adverse weather conditions). In a
Concerning bad weather risk for subsea highly innovative environment, developers
activities, the FIDIC forms entitle the should consider whether they want to be
contractor to an extension of time for ‘adverse prescriptive about the type of drilling methods
climatic conditions’ which are unforeseeable and vessels used, or if they would rather
relative to the climatic data provided by the transfer that risk to the market and concentrate
employer or published for the relevant on being restrictive with the expected results.
location. However, typically more detailed
provisions are set out, in the marine subsea
survey contract, dealing with waiting on
weather days and weather windows. Notes
For example, marine survey service 1 Adnan Memija, ‘Mingyang Rolls Out “World’s
contracts can include a weather downtime Largest” Offshore Wind Turbine in Capacity and Rotor
risk share mechanism whereby the developer Diameter’ (Offshorewind.biz, 13 December 2023), see
agrees to grant the contractor a certain www.offshorewind.biz/2023/12/13/mingyang-rolls-
number of days schedule allowance and a out-worlds-largest-offshore-wind-turbine-in-capacity-
lump sum payment in the event of adverse and-rotor-diameter, accessed 1 October 2024.
weather which impedes operations (with 2 A Muir Wood and P Knight, ‘Site investigation
proportionate reimbursement by the and geotechnical design strategy for offshore

CONSTRUCTION LAW INTERNATIONAL Volume 19 Issue 3 November 2024 29

FEATURE ARTICLE

wind development’, in Proceedings of the 18th

International Conference on Soil Mechanics and
Geotechnical Engineering (International Society for Soil
Mechanics and Geotechnical Engineering, 2013).
3 S Bhattacharya, Design of Foundations for Offshore Wind
Turbines (1st edn, John Wiley & Sons, 2019). See
https://doi.org/10.1002/9781119128137 , accessed
1 October 2024.
4 Offshore Wind in Europe: key trends and statistics
2020 (WindEurope, 2020), see https://proceedings.
windeurope.org/biplatform/rails/active_storage/
blobs/redirect/eyJfcmFpbHMiOnsibWVzc2FnZSI6
IkJBaHBBcDhDIiwiZXhwIjpudWxsLCJwdXIiOiJib
G9iX2lkIn19--652a2d205034a95011d035451622eca
84378db37/WindEurope-Offshore-wind-in-Europe-
statistics-2020.pdf, accessed 1 October 2024.
5 Guidance Notes for the Planning and Execution of
Geophysical and Geotechnical Ground Investigations
for Offshore Renewable Energy Development (Society of
Underwater Technology, May 2014), see https://sut.
org/wp-content/uploads/2014/07/OSIG-Guidance-
Notes-2014_web.pdf, accessed 1 October 2024.
6 Cerfontaine et al, ‘Anchor geotechnics for floating
offshore wind: Current technologies and future
innovations’ (2023), 279, Ocean Engineering.
7 Claire Smith ‘Renewables demand results in
new guidance for offshore ground investigation’
(New Civil Engineer, 15 July 2024), see www.
newcivilengineer.com/archive/renewables-
demand-results-in-new-guidance-for-offshore-ground-
investigation-15-07-2014/, accessed 1 October 2024.
8 ETR Dean, Offshore Geotechnical Engineering: Principles
and Practice (Thomas Telford, 2010).

30 CONSTRUCTION LAW INTERNATIONAL Volume 19 Issue 3 November 2024

 Hospitality & Construction
Disputes Post-Covid
Edited by Steven G Shapiro,
Shaheeza Lalani and Derek Heath
Published by: Brill Nijhoff
ISBN: 9789004514867
254 pages, €160
Publication date: 20 November 2023

Reviewed by Thayananthan Baskaran

T his book is a collection of 11 essays on

disputes arising in the hospitality and
construction industry in the wake of the
explaining the diverse lockdown measures
implemented in various countries, shedding
light on how construction projects were
Covid-19 pandemic. The book is divided into compelled to navigate stringent social
two parts. The first, comprising six essays, distancing rules and screening protocols to
is focused on the hospitality industry. The resume operations.
second, comprising five essays, looks at the Next, the authors explore legal remedies
construction industry. To review this book, I such as change in law clauses, adaptation
have looked at an essay in each part. mechanisms, hardship clauses, and force
The fourth essay in Part 1 is entitled majeure provisions commonly found in
‘Navigating Hotel Management Agreements construction contracts. The authors
in Times of Crisis’. The authors begin by consider the application and effectiveness
setting out the elements of hotel of these clauses.
management agreements, and explaining The authors also consider the challenges
their purpose and nature. The authors then associated with interpreting and invoking
highlight the clauses that become focal these contractual provisions. The authors
points during times of crisis. look at the nuances of change in law clauses,
The authors then focus on force majeure particularly in distinguishing between
and frustration claims, which are particularly binding legal restrictions and non-binding
significant in light of the Covid-19 pandemic. guidelines imposed by governments during
The authors consider the challenges posed the pandemic.
by general force majeure clauses that may In conclusion, this book provides invaluable
not specifically address events like insights into navigating legal challenges in
pandemics, leading to potential disputes the hospitality and construction industries
over their enforceability. The authors post Covid-19. Each chapter offers a
explore the differences in interpretation of comprehensive analysis of the legal
force majeure provisions across common frameworks, contractual obligations and
and civil law jurisdictions, emphasising the practical challenges faced by stakeholders. By
need for parties to carefully consider the highlighting deficiencies in current practices
governing law of their agreements. and advocating for proactive measures to
The first essay in Part 2 is entitled ‘Abeyance address unforeseen events, this book serves as
to Resuscitation – Construction Arbitration an indispensable resource for industry
in the Post-Covid Era’. The authors begin by professionals, scholars and legal practitioners.

CONSTRUCTION LAW INTERNATIONAL Volume 19 Issue 3 November 2024 31

Construction Law International
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