Construction Industry, Construction Law

Changes Afoot – the Proposed Arbitration Fairness Act

by Andrew Ness

The U.S. has been a staunch supporter of arbitration since 1925, when the U.S. Arbitration Act became law. The Arbitration Act makes arbitration agreements binding and simple to enforce, without significant exception. Rather suddenly, a substantial backlash against mandatory arbitration has appeared on the scene. One of the clearest indicators is the proposed Arbitration Fairness Act (H.R. 1020) that was introduced in the House of Representatives in February of 2009, and is still very much in play. While the anger is not directed at construction dispute arbitration, the concern is that commercial arbitration will end up being limited in important ways, as well as mandatory arbitration schemes where the use of arbitration is seen as one-sided and unfair.

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General Management, PMP Hints, Project Management

Negotiating With a Client’s Representative Requires Different Tactics

By Michael Strogoff, AIA

Effective negotiating requires that parties understand each other’s goals, aspirations and underlying concerns. Some of these can be ascertained indirectly: clients can gain a preliminary understanding of what’s important to design professionals through reading their statements of qualifications and other marketing collateral; design professionals can gain insight into a client’s perspective through reading their request for qualifications, talking to design professionals that previously worked with the client, or through third parties that know the client. No matter how much prior research is done, however, it is only when parties meet in person to negotiate that they can fully understand what drives each other. To design professionals, this means negotiating with a client’s key decision-maker. …

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Construction Industry, Construction Law, Contract Administration

Consultancy agreements and allegations of illegality

by Matthias Scherer

Contractors and suppliers operating abroad often conclude contracts with agents, consultants and other intermediaries who assist them in tender processes as well as in negotiating and performing contracts. Typically, these consultancy agreements provide that disputes are to be submitted to arbitration. Most disputes concern the consultants’ entitlement to a fee. In these disputes, the principal often argues that the contract was illegal under the applicable law. This notably occurred in two cases which led to two recent decisions of the Swiss Federal Supreme Court on applications to set aside or revise arbitral awards.

In the first case, a Swiss and a Taiwanese party had entered into a consultancy agreement in respect of a contract which the Swiss party wished to obtain for managing and maintaining an electricity plant in Taiwan. On the basis of the agreement, the Taiwanese consultant later initiated arbitration under the Swiss Rules of International Arbitration to obtain payment of his fees. The arbitral tribunal found in a partial award that the consultancy agreement was valid.

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General Management

Seven strategies to beat the recession

One may curse, whine, pray or plead but there still seems to be no escape from the after effects of the financial downturn. But before this recession monster starts gulping down our hard-earned savings, let’s attack it using some time-tested strategies and tools. The following habits combined with your indomitable spirit will ensure that you are left with plenty of cash to meet your needs and more: …

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Construction Industry

Majority of new buildings do not follow building code – JEA

AMMAN – The vast majority of new buildings constructed in the Kingdom, excluding the capital, do not comply with the National Building Code (NBC), according to the Jordan Engineers Association (JEA).
Stressing that failure to follow regulations puts the safety of buildings at risk in the event of major earthquakes, Mahmoud Subhi, head of the JEA’s technical affairs and engineering supervision committee, told The Jordan Times in a recent interview that citizens are obligated to comply with the NBC. …

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General Management

Negotiate, not bully

by Conrad Egbert

Last week, following extensive chats with developers, contractors and suppliers, it was clear that most of the industry is renegotiating contracts to better suit the current market conditions. Now, even though this may seem like the best option (and it probably is) to kick-start the construction industry, a couple of things that Besix’s Philippe Dessoy and Arabtec’s Tom Barry pointed out, painted a different picture. …

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Construction Industry

The emergence of Asian construction contractors in the Middle East

by Mark Raymont
In recent years, the Middle East has proved to be one of the most attractive construction and engineering markets in the world for international contractors. Notwithstanding the present global economic climate, parts of the Middle East continue to present significant opportunities and many global construction contractors are active in the region. Among the most prominent are construction contractors who are head-quartered in the Asia Pacific area, as is illustrated by some of the more high-profile projects in the Middle East, where construction contractor consortia have include many of the major Japanese and South Korean construction firms. …

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Construction Industry

Contractors are left guessing in the Gulf

The Gulf’s construction clients are struggling to make up their minds. Governments may be busy issuing tenders for new projects, but few awards are following once bids come in. For contractors, this presents serious problems, as they do not know if or when they will get any new work.

In Abu Dhabi, for instance, the first tenders have been issued for the MGM development at Mina Zayed, and contractors have been told to submit bids in May for a new 60,000-seat stadium in the Capital City area. But at the same time, the tender for Tawam hospital has been cancelled and contractors and consultants have been waiting for months for awards on a sewage tunnel programme and a metro system. …

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Construction Industry, Contract Administration

New decade, new development of the remoteness rule

by Sarah Thomas

In this, the second of my New Year updates, I would like to discuss two interesting cases which have recently been decided by the UK courts. The first is the UK Court of Appeal upholding of a first instance judgment and the comments that the Court made on the recoverability of damages under English contract law.

The case is Supershield Limited v Siemens Building Technologies FE Ltd. As a reminder, the basic test under English law is that a party will recover losses flowing from the breach that (i) arise naturally, in the usual course of things, or (ii) are losses which the parties may reasonably be taken to have contemplated when entering into the contract (the “Hadley v. Baxendale” test, often known as the “remoteness” test). A previous recent development of this area resulted from the House of Lord’s decision in the Achilleas case which suggests that a defendant will not be liable for losses — even those which are not unusual and therefore potentially not too “remote” — which he cannot reasonably be regarded as having assumed responsibility for.

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Construction Industry, Construction Law

U.S. Crackdown is Raising the Price of Corruption

by Andrew Ness

The principal weapon of the U.S. government to combat corruption in international business dealings is the Foreign Corrupt Practices Act (FCPA). To say that the U.S. is now aggressively pursuing FCPA cases is an understatement. In the past year, we have seen billions of dollars of fines, sting operations, and the pursuit of individuals around the world. Here are some of the latest FCPA headlines:

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Construction Industry, Construction Law

“Clause pénale” v. liquidated damages – any similarities?

1 Comment

by Joanne Clarke

Delays are of course a common problem in construction projects. French law (like English law) allows for a pre-estimation of damages for delay. However, the common law and the civil law approaches to such pre-estimation appear to differ, as pan-European construction professionals may have encountered.

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