• THE INTERNATIONAL COMMERCE & LAW REVIEW
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• v.27
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• pp.3-28
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• 2005

It is common that several kind of claims between the parties are arising in carrying out international construction works. Therefore, it is very important for them to settle the claims effectively in order to get expected profits and purposes in international construction works. In this article, the author have studied on the procedures and contents on the settlement of claims between the parties based on the FIDIC contracts for major works which are newly prepared in 1999 by FIDIC. Especially, the arbitration clause in the FIDIC contracts for major works attempts to deal with a number of complex contractual and legal matters, sometimes in a very harsh way, e.g. by cutting off a party's rights. It has never been an easy clause to understand or to observe. Nevertheless, the author hopes he has been able in this article to clarify for the reader some of the issues raised by it. I'd like to suggest that our overseas construction companies refer to the FIDIC contracts for major works(especially article 20 : claims, disputes and arbitration) directly or indirectly for their contract of international construction works with overseas employers.

• THE INTERNATIONAL COMMERCE & LAW REVIEW
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• v.23
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• pp.129-153
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• 2004

What can easily be concluded is that the Orgalime's General Conditions will be preferred by contractors to the Silver Book. However, it is probable that for some projects the Orgalime's General Conditions will not be acceptable to employers without significant amendment, particularly to such matters as design obligations, limitation of liability, force majeure and possibly the extension of time provisions. It is doubtful, however, whether the Orgalime's General Conditions will prove to be an alternative to the Silver Book. For projects for which the Silver Book was intended, the Orgalime's General Conditions will usually be unacceptable to employers and leaders. Notwithstanding this, the Orgalime's General Conditions is a welcome addition to the ever-growing suite of international contracts. And I strongly suggest that we must prepare our "General Conditions for Turnkey Contracts", etc. reflecting our law and practices as soon as possible.

• Journal of Arbitration Studies
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• v.16 no.2
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• pp.239-264
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• 2006

Globalization of business activities and the market is making intern ational movement of capital much freer. Therefore the introduction of global standard is inevitable. Each and every country has had its own standard which restrain free exchange and cause misunderstanding and conflict between countries. A country or a company which is not capable of meeting the global standard can not be accepted in the global market. Consequently, it will eventually be left behind. It is right to say that countries and companies should accept the global standard and abide by it to survive in the competitive global market. The following preface which was introduced in the international conference co_organised by BAC, FTCTC and Tsinghua University in May, 2004 shows a timely movement for the globalization of construction business. *B A C, Beijing Arbitration Commission *FTCTC, The FIDIC-Tsinghua-CNAEC Training Center *CNAEC, China National Association of Engineering Consultants Introduction, As arbitration becomes more and more popular in the ways of alternative disputes resolution all over the world, the BAC is devoted to promoting international arbitration in China. As FIDIC contracts constitute an accepted point of reference for international construction contract, the BAC, characteristic of construction projects, is willing to facilitate the FIDIC contracts as the referred construction contracts in China. In order to carry out its purposes, the BAC, together with FTCTC is going to convene for discussion of dispute resolution and arbitration of international construction projects. FIDIC, construction contract management guide, explains arbitration as the ultimate dispute resolution method. The detail of FIDIC will be suggested in this essay.

• KSCE Journal of Civil and Environmental Engineering Research
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• v.38 no.3
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• pp.497-503
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• 2018

Most of the conditions of contract applied in international construction contracts, including various conditions of contract published by FIDIC, include the provision for Retention Money which inevitably result in negative impact on cash-flow or financial burden to the contractors. In this study, fundamental reasons behind the application of Retention Money provisions are analysed and contractual mechanisms included in the FIDIC conditions of contract are searched, which include provisions for Performance Security and Defects as well as Termination, so that proper judgement can be derived on the application of Retention Money. In conclusion, considering the various contract provisions, performance security, termination of the contract by the Employer etc. included in the FIDIC conditions of contract, it is not necessary to include the provision for Retention Money.

• KSCE Journal of Civil and Environmental Engineering Research
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• v.36 no.6
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• pp.1153-1160
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• 2016

There have been many studies on the subject of risks in the Construction Industry and many useful results have been produced. However, risk studies on the conditions of contract, which is the most critical contract documents, has not been tried despite of its contractual function in the overseas projects. In this study, various contractual risks are identified for proper and reasonable evaluation of the contractual risks possibly encountered in the Tender and/or Contract stages of the Projects. For development of study, FIDIC Red Book 1999 Edition which is world widely recognised as a standard conditions of contract prepared for the projects designed by the Employer. Contractual risks are divided into three levels and applicable clauses are assigned to each appropriate risk factors. And table of major contractual risk factors are made using the classified levels of each factors with evaluation criteria as a result of this study. As this study is made only for the conditions of contract which is prepared for the construction contracts designed by the Employer, further studies for other types of contracts such as Design-Build (FIDIC Yellow Book), EPC/Turnkey (FIDIC Silver Book) and recently developed Design, Build and Operate type of contract (FIDIC Gold Book) are required to cover various types of projects executed in the world construction markets.

• Journal of the Korea Institute of Building Construction
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• v.10 no.4
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• pp.21-29
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• 2010

International construction contractors are often faced with the situation of working in an unfamiliar construction environment. Under FIDIC rules, the contractor has the right to make a claim requesting the consulting engineer for an adjustment to the contract price or the time for completion when a part or parts of the works have changed, or in the event of unforeseeable conditions. Contractors generally have more access to the costs and time implications of such a change or unforeseeable conditions than the consulting engineer or outside neutrals. Due to such an asymmetry of information, the contractor may be motivated to dispute frivolous claims of less merit, expecting erroneous judgments by the consulting engineer or the neutrals. In this paper, a claiming behavior model is presented by using game theory and experience data to study the manner in which frivolous claims develop into disputes. The model also analyzes the impacts of DAB/DRB upon the frivolous claims.

• Korean Journal of Construction Engineering and Management
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• v.24 no.2
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• pp.59-69
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• 2023

FIDIC White Book is a Model Services Agreement between the Client and the Consultant. This study aimed to derive the Key Risk Sub-Clauses out of 63 Sub-Clauses of General Conditions of the FIDIC White Book by using the Delphi technique. A panel of 40 experts with more than 10 years of experience and expertise in overseas construction services agreements and FIDIC White Book was formed, and the reliability was improved in the direction of increasing the consensus of experts through a total of three Delphi survey processes. In the first Delphi survey, a closed-type survey was conducted on the impact of risk among 63 Sub-Clauses of General Conditions on a Likert 5-point scale, and 26 main risk Sub-Clauses were derived. The Content Validity of the results of the first Delphi survey was verified with the CVR value. In the 2nd and 3rd Delphi surveys, a closed-type survey was conducted on a Likert 10-point scale for 26 main risk Sub-Clauses and the risk possibility and impact of each main risk Sub-Clause were evaluated. The reliability of the 3rd Delphi survey result was verified with the COV value. Total 14 Key Risk Sub-Clauses were derived by applying the average risk possibility and impact of each of the 26 main risk Sub-Clauses to the PI Risk Matrix. The results of deriving Key Risk Sub-Clauses showed that agreement on specific scope of service, delay management, and change management were the most important. As a result of this study, from a practical point of view, consultants of consulting companies provide guidelines that should be reviewed to minimize contractual risks when signing service contracts with clients. From an academic point of view, the direction of research on deriving key risks related to service contracts for consultants participating in overseas construction is presented.

• International conference on construction engineering and project management
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• 2015.10a
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• pp.629-630
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• 2015

'Sabine Pass Liquefaction Project (SPL Project)', a case study in this report, is the first construction project of a U.S. liquefaction facility for shale gas export overseas. This study analyzes the SPL Project to give understanding and a guideline to Korean EPC companies by benchmarking about effective risk-sharing strategies on EPC contracts. This study consists of three parts. The first summarizes the liquefaction process adopted on the SPL Project, named the 'ConocoPhillips Optimized Cascade Process', and compares it with other competitive liquefaction processes. The second introduces the unique features of the SPL EPC contract by comparing it with two other EPC forms of contracts: a FIDIC Silver Book for onshore plant projects and a contract of an offshore oil production (FPSO) project. The third focuses on the complexity of project financing (PF), especially lenders control and impact on the EPC contract such as covenant provisions to constrain variations and changes on the EPC Contract. From these conclusions, it is anticipated that this case study can provide a guideline for successful performance of Korean EPC contractors overseas.

• THE INTERNATIONAL COMMERCE & LAW REVIEW
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• v.25
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• pp.3-40
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• 2005

Many Korean construction companies have been performing a variety of overseas construction projects since the 1970s. It is unfortunate that in many cases they have had to suffer big losses caused by errors and defects in the design and construction of the projects. In the author's opinion, however, there were losses that could have been avoided if they had understood better the feature and content of the particular construction contract. Few lawyers and scholars in Korea have been interested in the research and study of international construction contracts. This is mainly because they do not have access to practical sources outside of Korea for them to research and study since the contracts undertaken have been dealt with by law firms in other jurisdictions to which the disputes apply. This article is aiming primarily at the introduction of the issues which the practitioners are likely to confront in the process of reviewing and performing the international construction contract. In some cases solutions are sought about these issues based upon the FIDIC standard terms and conditions, the actual experience of practice, and UNIDROIT Principles, etc. It is reasonable to say that all the issues related to the international construction contract cannot be covered in a short article like this. The author wishes this article could induce subsequent studies on international construction contracts for further research. It has to be noted that from time to time Korean construction practices have been compared to the international ones for better understanding. This article mostly includes cases where the Korean construction companies go overseas for their projects, while there are some cases where foreign developers and financial investors participated in domestic projects in which international construction contracts forms were adopted. A few precedent domestic writings about international construction contracts seems to lack emphasis on the points that there are several standard construction contract forms and that they are different. The differences are mainly in accordance with who bears the design responsibility, how the owner has to make progress payments to the contractor and who the funding source for the project is. This article tries to make it clear that there are significant differences between the standard contract forms, e.g. a simple construction form, a design-build form and an EPC/turnkey form of contract. Again, the author hopes that this article can arouse the interest in the international construction contracts from both academic and practical fields, so that many subsequent advanced articles can help our construction industry become much more competitive in the world through awareness of the methods of procurement and administration of the contracts.

• Korean Journal of Construction Engineering and Management
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• v.23 no.6
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• pp.101-110
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• 2022

Recently, the global construction market is expected to grow at an annual average of 4.8% by 2025 and the risk of overseas construction is also expected to increase accordingly. In particular, domestic construction companies intensively participated in the EPC(Engineering, Procurement, Construction)/Turnkey project, but as a result of failing to respond to contractual risks, they have suffered losses of trillions of won in overseas business since 2013. Nevertheless, there have been not many studies on the derivation of EPC/Turnkey's contractual key risk sub-clauses. Therefore, in this study, the key risk sub-clauses were studied for the conditions of the 2017 Silver Book contract issued by the International Consulting Engineering Federation(FIDIC). To this end, 30 experts with more than 10 years of experience in international construction contracts were formed as a panel to conduct a Delphi survey on 170 sub-clauses of 21 clauses of FIDIC Silver Book to derive 62 main risk sub-clauses. In addition, the RPN(Risk Priority Number) was finally calculated using the FMEA(Failure Mode and Effect Analysis) technique, and 25 key risk sub-clauses within the Critical Risk range were derived. Through the results of this study, the practical point of view is able to refer to the contract provisions to be carefully reviewed at the bidding and contract signing stage in overseas construction projects. From an academic point of view, it provides direction and basic knowledge of how to study the contract fields used in overseas construction EPC/Turnkey projects.