• 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.

• Proceedings of the Korean Institute Of Construction Engineering and Management
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• autumn
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• pp.335-340
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• 2002

FIDIC $(F\acute{e}d\acute{e}ration Internationale des Ing\acute{e}nieurs-Conseils)$ is the worldwide federation of consulting engineering member associations dedicated to developing relationships between the consulting engineering profession and governments, funding agencies, banks, industry, commerce, contractors, suppliers and other construction industry professions. Today FIDIC membership numbers nearly 70 member associations from all parts of the globe. The members of each national association comply with FIDIC's code of ethics which calls for impartial advice, competence and fair competition. FIDIC acts as a forum for the exchange of views and information and actively encourages the discussion of matters of mutual concern among member associations. FIDIC prepared regulations concerning tenders, it is a method of choice of investment contractor, which serves to optimum of utilization of investment funds. FIDIC procedure is the most often used in international tenders.

• 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.46
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• pp.29-60
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• 2010

The incentive and reasons to publish FIDIC Conditions of Contract for Design, Build and Operate Projects(DBO Form) are manifold. It is partly a response to the increasing need for sophisticated project delivery methods in both the public and private sectors and the already widespread use of the FIDIC Yellow Book with operation and maintenance obligations and partly a response to the challenge to decrease maintenance cost to a minimum by means of a new procurement route. As a result, FIDIC has developed a new model form to meet this market place requirement. On the other hand, FIDIC did not simply adapt the Yellow Book but has developed a new form from it, whilst preserving the style of the already known FIDIC Forms and maintaining the wording where it was not necessary to change it for the purposes of a DBO Form. Moreover DBO Form fills up supposed gaps in other FIDIC Forms and ameliorates the claim management and dispute management framework. FIDIC DBO approach may be shortly summarized as follows. First, DBO Form provides for single project responsibility. Second, DBO Form has the clear objective of ensuring the use of a most reliable and efficient technology at the lowest life-cycle cost. Third, DBO Form is intended to operate as an effective quality increase in the design and construction of projects. Fourth, DBO Form is intended to provide significant benefits with regard to system integration and reduction of risks. Fifth, DBO Form accelerates and enhances completion schedule compliance. Sixth, DBO takes care of all three supporting pillars of sustainability(including economical, environmental and social elements). DBO Form is obviously a good starting point for negotiations and the preparation of calls for tenders, thus saving the parties time and money. However, existing cultural and legal differences, particular local conditions and the particular needs of some branches of the industry may require the form to be adapted according to the particular needs of a project. And Civil law practitioners are strongly recommended to verify carefully the underlying legal concepts and background of each clause of the General Conditions in order to avoid unnecessary and sometimes unnatural changes and amendments being made. Note that when preparing the Particular Conditions ensure that terminology is consistent and that existing inherent concepts should not be ignored.

• 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.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.

• Korean Journal of Construction Engineering and Management
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• v.6 no.5 s.27
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• pp.177-185
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• 2005

Construction uncertainties are frequently exposed to the claims. In most cases, an interpretation of the claims is based on the construction contract. Therefore, the key points of contract negotiation are how to fairly distribute the contract risks to the client and contractor. For these, a FIDIC that is considered as an international standard contract form would be a good reference to decide reasonable contract risk distribution. In order to find out any unreasonable and unfair contract clauses at the general conditions of contract applying generally to public construction project in Korea, this study surveys, analyses and evaluates the general conditions of contract based on a FIDIC, and then proposes a risk mitigation methodology to response those clauses' risk factors reasonably.

• KSCE Journal of Civil and Environmental Engineering Research
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• v.43 no.2
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• pp.239-247
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• 2023

The FIDIC Red Book is an international standard contract condition in which the Employer designs and the Contractor performs the construction. The Engineer of FIDIC Red Book shall agree or determine any matter or Claim in accordance with Sub-Clause 3.7 neutrally, not as an agent of the Employer. This study aimed to derive Key Risk Sub-Clauses out of 49 Sub-Clauses that the Engineer of FIDIC Red Book recently revised in 18 years shall agree or determine according to Sub-Clause 3.7 using the Delphi method. A panel of 35 experts with more than 10 years of experience and expertise in international construction contracts was formed, and through total three Delphi surveys, errors and biases were prevented in the judgment process to improve reliability. As for the research method, 49 Sub-Clauses that engineers shall agree on or determine according to Sub-Clause 3.7 of the FIDIC Red Book were investigated through the analysis of contract conditions. In order to evaluate the probability and impact of contractual risk for each 49 Sub-Clause, the Delphi survey conducted repeatedly a closed-type survey three times on a Likert 10-point scale. The results of the first Delphi survey were delivered during the second survey, and the results of the second survey were delivered to the third survey, which was re-evaluated in the direction of increasing the consensus of experts' opinions. The reliability of the Delphi 3rd survey results was verified with the COV value of the coefficient of variation. The PI Risk Matrix was applied to the average value of risk probability and impact of each of the 49 Sub-Clauses and finally, 9 Key Risk Sub-Clauses that fell within the extreme risk range were derived.

• Proceedings of the Korean Institute of Building Construction Conference
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• 2005.11a
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• pp.127-131
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• 2005

The construction industry has specific characteristics compared with manufacturing industry. This means that each construction project has it's own contract documents due to the difference of environment and time. Now, the construction market is opening according to the Government Procurement Agreement by WTO. Therefore to overcome the associated risks, domestic contract rules and acts should be reformed. FIDIC and domestic construction contract conditions is investigated and analyzed. Based on the research outcomes the direction of reformation is suggested.

• 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.