2015 pu fidic module 1 session 5

7/23/2019 2015 PU FIDIC Module 1 Session 5

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Practical use ofFIDIC Conditions of Contracts

Module 1 Session 5

Jakarta, Indonesia28 – 30 September 2015

Sarwono HardjomuljadiDr Ir MSc (Civ MS!" (!#s M$ (%a& MD!' "C) "CI"rb

'IDIC "*+iate Member, 'IDIC Internationa+ "ccredited rainer, 'IDI "d-#dicatorCo#ntr. /epresentative o Disp#te /eso+#tion !oard or Indonesia

Secretar. o Centre o "rbitration and "+ternative Disp#te /eso+#tion or Constr#ction o Indonesia(!"D"SI

ice Cairman o 4ationa+ !oard or Constr#ction Services Deve+opment (%J4



ractica+ se o 'IDIC Contracts

Session 5

Risk, Force Majeure &ermination



Risk, Force Majeure &

ermination16 /isk and /esponsibi+it.

26 %iabi+it. 7 Ins#rance

36 ermination b. )mp+o.er

6 S#spension and ermination b. Contractor

56 'orce Ma-e#re



1! Risk and Res"onsi#ilit$• Contractor m#st indemni. te )mp+o.er a9ainst a++ c+aims, dama9es,

+osses and e:penses in respect o in-#r., disease or deat and dama9eto or +oss o propert. arisin9 o#t o is e:ec#tion o te ;orks #n+ess te

in-#r. or dama9e is d#e to ne9+i9ence, &i+#+ act or breac b. te)mp+o.er or te )mp+o.er<s ersonne+ or a9ents6

• e )mp+o.er m#st indemni. te Contractor &it respect to in-#r.,disease or deat attrib#tab+e to te ne9+i9ence, &i+#+ act o breac b.te )mp+o.er, or te )mp+o.er<s ersonne+ or a9ents and in respect o

certain matters e:c+#ded rom ins#rance cover



1! Risk and Res"onsi#ilit$• Contractor m#st take #++ responsibi+it. or te care o te ;orks

and =oods rom te Commencement Date #nti+ te >C is

iss#ed (or deemed iss#ed6• I an. +oss or dama9e occ#rs to te ;orks d#rin9 tis period

oter tan a matter +isted as an )mp+o.er<s /isk, te Contractorsa++ recti. te +oss or dama9e at is o&n risk and cost6

• Contractor &i++ be +iab+e or an. dama9e ca#sed b. is actionsater te iss#e o te >C6



1! Risk and Res"onsi#ilit$)mp+o.er<s risks inc+#de?

16 ;ar, osti+ities, invasion, act o orei9n enemies

26 /ebe++ion, terrorism, sabota9e b. persons oter tan te Contractor<s ersonne+,revo+#tion, civi+ &ar, etc6

36 /iot, commotion or disorder &itin te Co#ntr.6 M#nitions o &ar, e:p+osives, radiation, radio@activit. &itin te Co#ntr. A

56 ress#re &aves ca#sed b. aircrat, A

B6 se or occ#pation b. te )mp+o.er o an. part o te ermanent ;orks, e:cept asspecied in te Contract6



1! Risk and Res"onsi#ilit$6 Desi9n b. te )mp+o.er<s ersonne+ or oters or &om )mp+o.er is

responsib+e

86 "n. operation o te orces o nat#re tat &as #noreseeab+e or a9ainst&ic an e:perienced contractor co#+d not reasonab+. ave beene:pected to ave taken adeE#ate preventative preca#tions6

I an. o te above )mp+o.er<s /isks res#+ts in +oss or dama9e to te ;orks,=oods or Contractor<s Doc#ments, Contractor sa++ prompt+. noti. te)n9ineer and recti. te +oss or dama9e to te e:tent reE#ired b. te

)n9ineer6I e s#Fers de+a. andGor additiona+ cost rom rectication, e sa++ be entit+ed

to an e:tension o time and pa.ment o te Costs (and in te case oitems B 7 , Costs H prot



1! Risk and Res"onsi#ilit$• 4eiter art. sa++ be +iab+e to te oter art. or +oss o

#se o an. ;orks, +oss o prot or an. indirect orconseE#entia+ dama9e, ot%er t%an as s"ecicall$

"ro'ided under t%e Contract6• ):cept in te case o ra#d, de+iberate dea#+t or reck+ess

miscond#ct, te tota+ +iabi+it. o te Contractor to te)mp+o.er in connection &it te Contract sa++ not

e:ceed te s#m stated in te artic#+ar Conditions or i

no s#m is stated, te "ccepted Contract "mo#nt6



(! )ia#ilit$ & Insurance *Clause 1+• 'IDIC contracts reE#ire te o++o&in9 to be ins#red?

;orks 7 Contractor<s )E#ipmentIn-#r. to ersons 7 Dama9e to ropert.

Contractors ersonne+

• e ins#rances are to be taken o#t b. te Ins#rin9 art.K – &o is te Contractor #n+essoter&ise stated in te artic#+ar Conditions6

• )vidence o ins#rance 7 copies o po+icies are to be provided @ &itin period stated inContract Data6

• roessiona+ indemnit. ins#rance?i, #nder te Contract, te Contractor desi9ns ma-or parts o te ;orks, proessiona+

indemnit. ins#rance ma. be reE#ired6



(! )ia#ilit$ & Insurance• I te Ins#rin9 art. ai+s to take o#t or maintain te ins#rances, te

oter art. ma. do so and c+aim reimb#rsement o te cost rom teIns#rin9 art.K6

• I neiter art. takes o#t te ins#rances, in te event o +oss or dama9e,te Ins#rin9 art. sa++ pa. te amo#nt tat so#+d ave been

reimb#rsed #nder te ins#rances6

• I, more tan a .ear ater te !ase Date, te Contractor can no +on9erobtain ins#rance or te ;orks on commercia++. reasonab+e terms, em#st inorm te )mp+o.er &o &i++ ten be entit+ed to c+aim pa.ment

rom te Contractor o an amo#nt eE#iva+ent to commercia++.reasonab+e terms b#t e &i++ be deemed to ave accepted te +ack o

ins#rance cover6



-! ermination #$ t%e .m"lo$er)mp+o.er entit+ed to terminate te Contract or dea#+t i te Contractor?

16 ai+s to maintain an acceptab+e erormance Sec#rit.L26 abandons te ;orks or p+ain+. demonstrates an intention not to comp+. &it an. o

is ob+i9ations #nder te ContractL36 ai+s to e:pedite pro9ress o te ;orks or to comp+. &it instr#ctions to recti.

deects &itin 28 da.s o receiptL6 s#bcontracts te &o+e o te ;orksL

56 becomes bankr#pt or inso+vent, enters into +iE#idation or disso+#tionLB6 9ives or oFers an. bribe, 9it, 9rat#it. or commissionL

6 ai+s to comp+. &it a notice o remedia+ action6



-! ermination #$ t%e .m"lo$er'IDIC contracts do not reE#ire an. certication b. te )n9ineer6

In an. o te above, te )mp+o.er ma. 9ive 1 da.s< notice to te

Contractor o terminationL e:cept tat immediate notice ma. be9iven in te event o reasons (5 and (B6

)mp+o.er so#+d take +e9a+ advice beore 9ivin9 notice otermination6

I te )mp+o.er 9ives notice and ten &ises to &itdra& it, tearties ma. a9ree tat te notice sa++ be o no eFect or, it ma.

be a9reed tat te notice be p#t on@o+d6



-! ermination #$ t%e .m"lo$er"ter e:pir. o te )mp+o.er<s notice o termination?

• )mp+o.er ma. comp+ete te ;orks imse+ or arran9e or oters to do

soL• )mp+o.er, or is oter contractors, ma. #se an. o te Contractor<s

Materia+s 7 )E#ipment, etc6 as te. deem t ()n9ineer to instr#ctContractor not to remove an. aci+ities rom SiteL )mp+o.er ma. need to

obtain a co#rt order to enorce tisL• aci+ities so#+d be re+eased to te Contractor on+. ater receipt b. te

)n9ineer o a notice to tat eFect rom te )mp+o.er, &ic mi9t notbe #nti+ te ;orks ave been comp+eted6



3. Termination by the Employer

•

Employer is entitled to require the Contractor to assign to him the benefit ofany agreements or subcontracts;

• Engineer shall determine sums due to the Contractor;

• Employer is entitled to withhold further payments until the expiration of the

DNP and then until the costs of completing the Works and remedying

defects damages for delay and other related expenses ha!e beenestablished;"

• #t such time Contractor is entitled to recei!e the amount to which he would

ha!e been entitled at the date of termination less the Employer$s extra

costs his losses and damages"




Employer$s %ermination for Con!enience

• Employer is entitled to terminate the Contract at any time for his own

con!enience by gi!ing notice to the Contractor &Clause '("()"

• %ermination takes effect 28 days after the later of the dates on which theContractor receives the notice or the Employer returns the

Contractor’s Performance Security"

• Employer cannot terminate the Contract in order to execute the Works

himself or by other contractors or to a!oid a termination by the Contractor"




• #fter notice of termination*

Contractor ceases all further work except as may be instructed for the

safety of life property and the Works;Contractor hands o!er to the Employer any documents etc" for which he

has recei!ed payment;

Contractor remo!es from +ite all his Equipment and facilities and lea!es

the +ite"




• Engineer determines and Employer promptly pays to the Contractor &less

any entitled deductions)*

amounts payable for works acceptably performed;

the cost of Plant and ,aterials ordered by the Contractor;any other cost or liability reasonably incurred;

cost of remo!al of %emporary Works and Contractor$s Equipment from +ite

and their return to the Contractor$s home base;

cost of repatriation of the Contractor$s staff and labour"



. Suspension and Termination by the Contractor

Suspension

•%he Contractor is entitled sub-ect to gi!ing .' days$ notice to reduce his rateof work or to suspend work*

if the Engineer fails to issue the /PC within .0 days;

Employer fails to pay the Contractor within the times prescribed;

Employer fails to pro!ide proof of his financial arrangements within .0 days"

• 1ull amount certified by the Engineer must be paid sub-ect to any deductionsthe Employer is entitled to make"

• Employer$s partial payment*2 does not affect the Contractor$s entitlement;2 Engineer should immediately ad!ise the Employer in writing of the

risk of suspension and3or termination"



. Suspension and Termination by the ContractorContractor is entitled to terminate if *

'" the Employer fails to pro!ide proof of his financial arrangements within 4.days after recei!ing a notice of slow2down;

." the Engineer fails to issue an /PC within (5 days after recei!ing Contractor$s+tatement and supporting documents;

6" the Employer has not paid the Contractor the amount due under /PC 4.days after the due date for payment;

4" the Employer substantially fails to perform his obligations;

(" the Employer assigns the Contract to a third party;

5" a prolonged suspension affects the whole of the Works;

7" the Employer becomes bankrupt or goes into liquidation;0" %he Contractor does not recei!e the Engineer$s notice to commence 6




• 1or each of the abo!e e!ents the Contractor may gi!e '4 days$ notice to

the Employer of termination; except that he may gi!e notice of immediate

termination for &5) or &7)"

•

Contractor$s election to terminate the Contract does not pre-udice any of hisother rights under the Contract"

• /f the Contractor gi!es notice and then wishes or agrees to withdraw it the

Parties may agree that the notice shall be of no effect

• or it may be agreed that the notice be put on2hold"




• #fter expiry of the Contractor$s notice of termination*2 Contractor ceases all further work except as may be instructed for

the safety of life property and the Works;

2 Contractor hands o!er to the Employer any documents Plant,aterials and other work for which he has recei!ed payment;2 Contractor remo!es from +ite all his Equipment and facilities and

lea!es the +ite;2 Employer promptly returns the Contractor$s Performance +ecurity"



. Suspension and Termination by the Contractor• Engineer determines and Employer promptly pays to the Contractor &less

any entitled deductions)*

amounts payable for works acceptably performed;

the cost of Plant and ,aterials ordered by the Contractor;

any other cost or liability reasonably incurred;cost of remo!al of %emporary Works and Contractor$s Equipment from +ite

and their return to the Contractor$s home base;

cost of repatriation of the Contractor$s staff and labour;

• Employer to pay the amount of any loss of profit or other loss or damage

sustained by the Contractor as a result of the termination"



!. "orce #a$eure &Clause '8)

•

91orce ,a-eure: means an exceptional e!ent or circumstance* which is beyond a Party$s control

which such Party could not reasonably ha!e pro!ided against before

entering into the Contract

which ha!ing arisen such Party could not reasonably ha!e a!oided or

o!ercome and

which is not attributable to the other Party"

• Clause '8"' gi!es examples of the kind of e!ent that 1orce ,a-eure

may include" %hese are similar to the Employer$s isks except that the

Employer$s isk e!ent “Unforeseeable operation of the forces of nature

…” is replaced by “natural catastrophes such as earthquake, hurricane,

typhoon or volcanic activity.”



!. "orce #a$eure• /f a Party is or will be pre!ented from performing its substantial obligations

under the Contract by 1orce ,a-eure it must gi!e notice to the other Party

of the e!ent and specifying the obligations the performance of which is

pre!ented" %he notice must be gi!en within % days of becoming aware or

when the Party should ha!e become aware of the e!ent"• <a!ing gi!en notice the Party is excused from performance for so long as

the 1orce ,a-eure pre!ents performance = except with respect to

obligations to pay the other Party under the Contract"



!. "orce #a$eure

• /f the Contractor is pre!ented from performing its substantial obligations by

1orce ,a-eure and has gi!en notice to the Employer he shall be entitled to*

an extension of time with respect to delay incurred and

reimbursement of his Costs unless the 1orce ,a-eure e!ent was*

•

a natural catastrophe or• a rebellion terrorism riot commotion strike etc"

outside the Country of the Works or

• munitions explosi!es radiation etc encountered

outside the Country of the Works"



!. "orce #a$eure• Contract may be terminated if a Party is or will be pre!ented by 1orce

,a-eure from performing its obligations for a continuous period of 8days or for multiple periods totallin& more than %' days due to the

same 1orce ,a-eure e!ent"• /n such circumstances the Party seeking to terminate must gi!e notice

to the other Party and the notice shall take effect ( days after beinggi!en"



!. "orce #a$eure

• #fter notice of termination*

Contractor ceases all further work except as may be instructed for thesafety of life property and the Works;

Contractor hands o!er to the Employer any documents etc" for which he

has recei!ed payment;

Contractor remo!es from +ite all his Equipment and facilities and lea!es

the +ite;Employer returns the Contractor$s Performance +ecurity"

• Engineer shall determine and Employer must pay to the Contractor &less

any deductions to which the Employer is entitled under the Contract) as for

termination by the Contractor except loss of profit"



• .nd of Session 5



Country Representative for Indonesia e Disp#te /eso+#tion !oard 'o#ndation

1N550 Internationa+ !+vd6 So S#ite 31

Seatt+e, ;asin9ton N8188, S" e+6(20B 88@333B, 'a: (20B 88@3338

&&&6drb6or9

Corporate Panel Member (MDBF) e Disp#te !oard 'ederation

1, r#e d# /one120 =eneva, S&itOer+and

e+? H1 22 81N 1N B8, 'a:? H1 32 BN N5

&&&6dbederation6or9

Associate Member (ACIArb)Cartered Instit#te o "rbitrators

12 !+oomsb#r. SE#are%ondon, ;C1" 2%,

e+? H (020 21 L 'a:? H (020 0 023&&&6ciarb6or9

FIDIC Aliate Member

FIDIC International Accredited rainerFIDIC Ad!udicator 'ederation Internationa+e des In9enie#rs@Consei+s

'IDIC @ !o: 311 @ C$@1215 =eneva 15 @ S&itOer+andSP) dic6secretariat @ + H1@22@NN N 00 @ ': H1@22@NN N 01

&&&6'IDIC6or9

Sarwono HardjomuljadiDr, Ir, MSc (Civ, MS!" (!#s, M$ (%a&, MD!', "CI"rb, "C)

http://dbfederation.org/index.asp

http://www.ciarb.org/

2015 pu fidic module 1 session 5

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