FIDIC UPDATE
The International Federation of Consulting Engineers has had another busy year since last year’s update in the 2024 Construction Law Review.
In November 2024, the Asian Infrastructure Investment Bank (AIIB) renewed and expanded a major agreement with FIDIC that will now see the international funding organisation adopt the use of 12 FIDIC standard contracts for the next five years.
The 12 FIDIC contract documents covered by the FIDIC/AIIB agreement are as follows:
- Conditions of Contract for Construction for Building and Engineering Works Designed by the Employer (Red Book), first edition 1999.
- Conditions of Contract for Construction for Building and Engineering Works Designed by the Employer (Red Book), second edition 2017, reprinted 2022 with amendments.
- Conditions of Contract for Plant and Design-Build for Electrical and Mechanical Plant and for Building & Engineering Works Designed by the Contractor (Yellow Book), first edition 1999.
- Conditions of Contract for Plant and Design-Build for Electrical and Mechanical Plant and for Building and Engineering Works Designed by the Contractor (Yellow Book), second edition 2017, reprinted 2022 with amendments.
- Conditions of Contract for EPC Turnkey Projects (Silver Book), first edition 1999.
- Conditions of Contract for EPC Turnkey Projects (Silver Book), second Edition, 2017), reprinted 2022 with amendments.
- Client/Consultant Model Services Agreement (White Book), fifth edition 2017.
- Conditions of Contract for Design, Build and Operate Projects (Gold Book) First Edition 2008.
- The Short Form of Contract (Green Book), first edition, 1999.
- The Short Form of Contract (Green Book), second edition, 2021.
- Conditions of Contract for Underground Works (Emerald Book), first edition, 2019, reprinted in 2023 with amendments.
- Form of Contract for Dredging and Reclamation Works, second edition, 2016.
In December 2024 FIDIC renewed and expanded a major agreement with the African Development Bank (AfDB) that will now see the multilateral development bank employ ten FIDIC standard contracts for the next five years.
The official FIDIC International Contract Users’ Conference and Awards took place form the 2-4 December 2024 at the Park Plaza London Riverbank Hotel and saw the launch of the second FIDIC practice note, Practice Note II Appointment of Dispute Boards1, produced by FIDIC’s Dispute Avoidance and Adjudication Forum.
The new practice note highlights many of the key aspects of the appointment of dispute boards including how they sit in FIDIC forms of contract, the key tasks involved in selecting and appointing the right dispute board for projects, how to decide between a standing or ad-hoc dispute board, deciding on the number of dispute board members, following the appointment process, appointing dispute board members within contractual timelines, finding the right members and proposing them to the other party for agreement, how to consider the contractual list of potential members before entering a contract and ensuring that potential dispute board members meet the contractual requirements.
United Kingdom Adjudicators having input into the document included Taner Dedezade, Barry Manie, Brian Barr, Derek Ross, James Dow, John Papworth, Mark Entwistle, Jeremy Glover, Nigel Davies and Sean Gibbs.
In December 2024 FIDIC renewed and expanded a major agreement with the African Development Bank (AfDB) that will now see the multilateral development bank employ ten FIDIC standard contracts for the next five years. The bank is the leading source for development financing in Africa and is committed to supporting inclusive and sustainable growth and good governance across the continent.
The ten FIDIC contract documents covered by the FIDIC/AfDB agreement are as follows:
- Conditions of Contract for Construction for Building and Engineering Works Designed by the Employer (Red Book), second edition 2017, reprinted 2022 with amendments.
- Conditions of Contract for Plant & DesignBuild for Electrical and Mechanical Plant & for Building & Engineering Works Designed by the Contractor (Yellow Book), second edition 2017, reprinted 2022 with amendments.
- Conditions of Contract for EPC Turnkey Projects (Silver Book), second edition, 2017), reprinted 2022 with amendments.
- Client/Consultant Model Services Agreement (White Book), fifth edition 2017.
- Conditions of Contract for Design, Build and Operate Projects (Gold Book) first edition 2008.
- The Short Form of Contract (Green Book), first edition, 1999.
- Conditions of Contract for Construction for Building and Engineering Works Designed by the Employer (Red Book), first edition 1999.
- The Short Form of Contract (Green Book), second edition, 2021.
- Conditions of Contract for Underground Works (Emerald Book), first edition, 2019, reprinted in 2023 with amendments.
- Form of Contract for Dredging and Reclamation Works, second edition, 2016.
Readers will be aware that Dr Nelson Ogunshakin stepped down as FIDIC CEO after six years in the role, whilst it took some time for his replacement to be found, FIDIC announced in March 2025 that Susanna Zammataro, would become CEO on 1 May 2025.
2025 is the fifth year in which FIDIC have been accrediting adjudicators for dispute boards and there are now 125 accredited adjudicators as of April.
The fifth King’s College FIDIC course took place from the 1-5 July 2025 and like previous years, students from across the globe attended the five-day taught course, this ongoing initiative is building significant capacity in the international construction industry. The course is provided by leading practitioners and is designed to equip talented commercial managers, engineers and lawyers with advanced legal, commercial and practical knowledge in relation to FIDIC contracts and the legal background within which they operate. The course has consistently sold out each year upon release so if you are interested in taking it in 2026 do register your interest now.
2025 is the fifth year in which FIDIC have been accrediting adjudicators for dispute boards and there are now 125 accredited adjudicators as of April. Also, there is now a list of people whose accreditation has lapsed which currently stands at fifteen people, though some are deceased and others have been leading dispute board members for many years. In total 140 people have successfully passed the accreditation training2.
The FIDIC contract manager certification commenced in 2022 and as of April 2025 there are now 211 certified contract managers and 12 lapsed managers3. The FIDIC trainer certification commenced in 2023 and as of May 2024 there are now 72 certified trainers and 20 lapsed trainers4.
In February 2025 FIDIC renewed and expanded a major agreement with the Inter-American Development Bank (IDB) that will now see the international funding organisation adopt the use of nine FIDIC standard contracts for the next five years. The IDB is the main source of development financing for Latin America and the Caribbean. The nine FIDIC contract documents covered by the FIDIC/ AIIB agreement are as follows:
- Conditions of Contract for Construction for Building and Engineering Works Designed by the Employer (Red Book), second edition 2017, reprinted 2O22 with amendments.
- Conditions of Contract for Plant and Design-Build for Electrical and Mechanical Plant and for Building and Engineering Works Designed by the Contractor (Yellow Book), second edition 2017, reprinted 2O22 with amendments.
- Conditions of Contract for EPC Turnkey Projects (Silver Book), second edition, 2017, reprinted 2022 with amendments.
- Client/Consultant Model Services Agreement (White Book), fifth edition 2017.
- Conditions of Contract for Design, Build and Operate Projects (Gold Book) first edition 2008.
- The Short Form of Contract. (Green Book), first edition, 1999.
- The Short Form of Contract (Green Book), second edition, 2021.
- Conditions of Contract for Underground Works (Emerald Book), first edition, 2019, reprinted in 2O23 with amendments.
- Form of Contract for Dredging and Reclamation Works, second edition, 2016.
The Contracts Committee has confirmed that it will be releasing the Carbon Management Guidance and Collaborative Contracting Form.
The world’s leading engineers and construction industry professionals are set to gather in South Africa, from 21-23 September 2025 when FIDIC, the International Federation of Consulting Engineers, holds its annual Global Infrastructure Conference in Cape Town.
The conference theme this year is a very topical one ‘Smart Infrastructure: Equality, Resilience and Innovation for a Sustainable World’ and will set the framework for some essential and timely discussions on the future of infrastructure and how it will be delivered in a changing world.
The Contracts Committee has confirmed that it will be releasing the Carbon Management Guidance and Collaborative Contracting Form, work that will be published after 2025 includes the following:
- PPP 2.0 Model Contracts.
- Guide to the 2017 Suite of Services Agreements.
- Bronze Book (ODBO form of contract) Test Edition.
- Golden Principles for Services Agreements.
- Subcontracts to the 2017 RYS Books and 2021 Green Book.
- Offshore Wind Farm Contract.
- Handbook for Practitioners
- JV Agreement for Contractors.
- FIDIC Procurement Guide – update
- EPCM form of contract.
FIDIC contract disputes rarely make the courts in the United Kingdom primarily as the dispute board process and usual ICC arbitration clause lead to a final conclusion of the dispute, but this year a case went to the Privy Council.
Trinidad and Tobago
Water and Sewerage Authority of Trinidad and Tobago v Waterworks Ltd (Trinidad and Tobago) [2025] UKPC 9 – FIDIC Yellow Book 1999 (Conditions of Contract for Plant and Design Build). This case was an appeal from the Court of Appeal of the Republic of Trinidad and Tobago and the case concerns the interpretation of a clause in two design and construction contracts entitling a contractor to obtain reimbursement for reasonable expenses incurred prior to termination. The issue is whether charges incurred by the appellant, due to the cancellation of purchase orders for the supply of equipment made with a third party, were ‘a cost or liability which in the circumstances was reasonably incurred in the expectation of completing works’?
The claimant (and appellant) was the contractor, a company incorporated in Trinidad and Tobago called Waterworks Ltd. The employer was the Water and Sewerage Authority of Trinidad and Tobago, a public authority established by the Water and Sewerage Act, chap 54:40: It is the defendant and respondent to the appeal.
This was appealed to the Court of Appeal of the Republic of Trinidad and Tobago and the decision at first instance was overturned.
The Yellow Book, in its original 1999 version, formed the basis of two contracts to design and build water treatment plants made between the parties in this case.
The dispute between the parties had been heard in the High Court of the Republic of Trinidad and Tobago and the judge at first instance decided that the 30% cancellation charges claimed by the contractor were reasonably incurred and should be awarded as part of the costs and liability sought due to the employer terminating for convenience under clause 19.6.
This was appealed to the Court of Appeal of the Republic of Trinidad and Tobago and the decision at first instance was overturned and the main reasons for overturning the matter were that:
(i) Having found that actually to purchase equipment for the water treatment plants at such a preliminary stage would have been premature, and therefore unreasonable, the judge should have concluded that it was also premature to commit to liabilities to pay charges that were intended to arise upon the cancellation of such purchases.
(ii) The judge’s finding that the purchase orders issued by the contractor were not for the actual supply of the equipment was inconsistent with the clear language of the contractual documents and was not sustainable.
(iii) Even if the judge’s finding about the nature of the purchase orders had been correct, the judge failed to consider whether it was reasonable to agree to a cancellation charge of 30% of the prices quoted for the equipment if the orders were cancelled before MAAK actually purchased the equipment.
(iv) The judge was wrong to find that the preliminary designs on which the quotations were based were sufficiently detailed to allow the equipment to be identified and ordered. It was illogical to infer, as the judge did, that because the preliminary designs were sufficient to ascertain the likely cost of the equipment for the purpose of making a tender, they were also sufficient to identify the equipment with the degree of detail needed for construction of the plants.
Clause 19.6 provided that:
“Upon such termination, the engineer shall determine the value of the work done and issue a payment certificate which shall include: (a) the amounts payable for any work carried out for which a price is stated in the contract. (b) the cost of plant and materials ordered for the works which have been delivered to the contractor, or of which the contractor is liable to accept delivery. (c) any other cost or liability which in the circumstances was reasonably incurred by the contractor in the expectation of completing the works”.
The Privy Council dismissed the appeal and held that the costs sought did not fall within clause 19.6(c) as they had not been reasonably incurred.
The Privy Council dismissed the appeal and held that the costs sought did not fall within clause 19.6(c) as they had not been reasonably incurred.
This case highlights to those claiming or making assessments they must thoroughly demonstrate the costs have been reasonably incurred, not merely incurred. This will entail a detailed examination of the background facts as well as the usual programming and accounting data and records.
India
Capacite Infraprojects Ltd vs T. Bhimjyani Realty Pvt. Ltd, Civil Appeal No.__/ 2024 Special Leave Petition (Civil) No.25352/2023), on 20 November, 2024. In this matter the court stated that the contractor (appellant) should follow the procedure outlined in subclause 20.3 to appoint a dispute adjudication board (DAB) member:
This case highlights to those claiming or making assessments they must thoroughly demonstrate the costs have been reasonably incurred, not merely incurred. This will entail a detailed examination of the background facts as well as the usual programming and accounting data and records.
“Then the appointing entity or official named in the appendix to tender shall, upon the request of either or both of the parties and after due consultation with both parties, appoint this member of the DAB. (The appendix to tender stipulates that the appointing authority is “the president of FIDIC or a person appointed by the president” ). This appointment shall be final and conclusive. Each party shall be responsible for paying one-half of the remuneration of the appointing entity or official”.
The court also clarified that if the DAB mechanism doesn’t resolve the dispute within a reasonable timeframe, the appellant can resort to other dispute resolution methods, including those provided under sub-clause 20.5 and sub-clause 20.6 of the contract.
Whether other courts in different jurisdictions would be willing to allow someone to circumvent the contractual processes for tiered ADR remains to be seen.
Sean is former chair the of CICES Contract and Disputes Resolution Panel.
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2 A full listing of those accredited can be accessed via https://fcl.fidic.org/ourprogrammes/adjudicators/
3 The contract managers are listed at https://fcl.fidic.org/our-programmes/contractmanagers/
4 The trainers are listed at https://fcl.fidic.org/our-programmes/trainers/