Legal mastercalls to SubOptic2019 by Mike Conradi

1. Name:
Company:
Evaluating the risks of a turnkey
submarine cable supply contract
Mike Conradi, Partner (mike.conradi@dlapiper.com)
DLA Piper
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2. Copyright © SubOptic2019 Slide 2
Name:
Title:
Email:
Mike Conradi is one of the lead telecoms partners at
global law firm DLA Piper LLP.
He has a particular focus on submarine cable systems,
having worked on more than 50 legal engagements
concerning cables over a 20+ year period.
Mike has delivered a "legal masterclass" to every
SubOptic since 2001
Mike Conradi
Partner
mike.conradi@dlapiper.com
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3. Copyright © SubOptic2019 Slide 3
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Suspension of work for any reason causes significant
problems for customers (esp if vessels redeployed) so…
• If payment missed
- Prefer other remedies (eg interest)
• Non-payment by single consortium member?
- Usually NOT joint liability,
• Insolvency of Vendor?
- Performance bond designed to mitigate this
Service Suspension and Termination

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Force Majeure typically entitles supplier to more time, but
not more money
Weather delays not unusual – but who bears the risk?
• One solution – it's not "force majeure" if its forseeable
bad weather
• Alternative – allow for a certain number of bad-weather
days
- Problem with this is verifying the planned number
Force Majeure and Weather

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Marine surveys can raise issues not seen in the desktop
study – requiring changes to the RPL, armoring etc
Could be a material extra cost. Risk is that supplier
deliberately underestimates at tender stage then
increases price
• Solution? - cap the increase in charges (on most routes
the supplier should have some confidence in the DTS)
On Permits – usually have a responsibility matrix, with
supplier getting installation permits, customer gets
operational ones. Supplier to get any omitted.
Route Surveys and Permits

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Common to have a warranty period (eg 5 years) on the
system
So what does "design life" of 25 years mean?
• Answer – some additional protection if a pattern of
failure develops even after expirly of the warranty
period
• Also look at whether warranty covers replacement
costs as well as replacement parts
Warranty and Design Life

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Owners may want SLTE from a third party, or to upgrade
the SLTE later – without invalidating warranty
Review of IPR licences also important to prevent lock-in
"Open systems" and upgrades

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