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Werksmans Construction & Engineering Seminar - John Bishop presentation


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The top ten risks for international contractors

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Werksmans Construction & Engineering Seminar - John Bishop presentation

  1. 1. The “Ten” top risks for International Contractors John Bishop
  2. 2. Law Clauses • What Law will apply? – Do we understand the consequences? • For the effectiveness of a contract • For the performance • Change of Law – Who takes the risk of a change of law? 2
  3. 3. Codes and Standards • What technical standards or codes will apply? – Are those stated in the contract going to be applicable • legally • in practice 3
  4. 4. The Disputes Process • What procedures will keep us out of arbitration? – DRBs/DABs/other ADR processes • Does the local law impose a process? – E.g. compulsory adjudication • Are the Arbitration terms effective? – No right to arbitrate before completion, – Will local Courts enforce? – Local law intervention • Will your award be enforceable? – The New York Convention. 4
  5. 5. Conditions Precedent • Does the Contract Contain Conditions Precedent to entitlement? – Maybe hidden • “Upon” “If” – What is the consequence of failing to meet the condition precedent? • Is a bar on entitlement enforceable under local law? • Is a bar capable of being circumvented? • Most international contracts require parties to pursue their claims to maintain the economic balance 5
  6. 6. EOTs • What events? – What about near misses? • Concurrency – English Law position – Scottish Law position – Anti concurrency clauses • In some countries – the prevention principle – overriding legal entitlement to relief 6
  7. 7. Performance Damages • LDs (Delay and Performance) – Enforceable? • Under local law • If excessive – Different countries different results – Capped? – Exclusive remedy? – Following termination 7
  8. 8. Caps and Exclusions • Is there a cap? – Is it effective under the local law? – What liabilities are outside the cap? • Exclusion of consequential losses? – What is a consequential loss? – What are the exclusions? – Is the clause enforceable? – Following termination? 8
  9. 9. Cash Risk • Is payment secured? – Rights when non payment • Interest • EOT • Termination • Suspension – Retention money and the right to exchange for a bond? – Cash consequence of an improper bond call – Right to evidence of financing – Speedy dispute resolution 9
  10. 10. Design Risk • Hidden design risks – the selection of plant and materials – through subcontractors • Design approval processes – what is the process – is it capable of being abused? • restrictions on comments, time and nature • Unfair design risk – Employer Data – Ground conditions – Employer’s requirements/selection of plant 10
  11. 11. Bonding • On demand • Conditional • Hybrid • Applicable law • Repayment following a wrongful call? 11
  12. 12. Termination • Grounds for termination – Reasonable? – Cure period? – Procedure for termination • Local Law issues – Judicial intervention necessary? – For convenience 12
  13. 13. Right to suspend • Suspension – By contract – By Law • Not in English Common Law – So potentially a breach • May be statutory right but may be conditions • Normal in civil law jurisdictions 13
  14. 14. Currency Risk • Price in fixed currency/currencies but cost incurred in different split – variations 14
  15. 15. Thank You
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