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Appendix 1
ABOUT THE AUTHORS
The Projects and
Construction Review
Law Business Research
Fourth Edition
Editor
Júlio César Bueno
The Projects and Construction Review
The Projects and Construction Review
Reproduced with permission from Law Business Research Ltd.This article was first published in The Projects and Construction Review - Edition 4
(published in July 2014 – editor Júlio César Bueno ).
For further information please [email protected]
The Projects and
Construction Review
Fourth Edition
EditorJúlio César Bueno
Law Business Research Ltd
THE MERGERS AND ACQUISITIONS REVIEW
THE RESTRUCTURING REVIEW
THE PRIVATE COMPETITION ENFORCEMENT REVIEW
THE DISPUTE RESOLUTION REVIEW
THE EMPLOYMENT LAW REVIEW
THE PUBLIC COMPETITION ENFORCEMENT REVIEW
THE BANKING REGULATION REVIEW
THE INTERNATIONAL ARBITRATION REVIEW
THE MERGER CONTROL REVIEW
THE TECHNOLOGY, MEDIA AND TELECOMMUNICATIONS REVIEW
THE INWARD INVESTMENT AND INTERNATIONAL TAXATION REVIEW
THE CORPORATE GOVERNANCE REVIEW
THE CORPORATE IMMIGRATION REVIEW
THE INTERNATIONAL INVESTIGATIONS REVIEW
THE PROJECTS AND CONSTRUCTION REVIEW
THE INTERNATIONAL CAPITAL MARKETS REVIEW
THE REAL ESTATE LAW REVIEW
THE PRIVATE EQUITY REVIEW
THE ENERGY REGULATION AND MARKETS REVIEW
THE INTELLECTUAL PROPERTY REVIEW
THE LAW REVIEWS
www.TheLawReviews.co.uk
THE ASSET MANAGEMENT REVIEW
THE PRIVATE WEALTH AND PRIVATE CLIENT REVIEW
THE MINING LAW REVIEW
THE EXECUTIVE REMUNERATION REVIEW
THE ANTI-BRIBERY AND ANTI-CORRUPTION REVIEW
THE CARTELS AND LENIENCY REVIEW
THE TAX DISPUTES AND LITIGATION REVIEW
THE LIFE SCIENCES LAW REVIEW
THE INSURANCE AND REINSURANCE LAW REVIEW
THE GOVERNMENT PROCUREMENT REVIEW
THE DOMINANCE AND MONOPOLIES REVIEW
THE AVIATION LAW REVIEW
THE FOREIGN INVESTMENT REGULATION REVIEW
THE ASSET TRACING AND RECOVERY REVIEW
THE INTERNATIONAL INSOLVENCY REVIEW
THE OIL AND GAS LAW REVIEW
THE FRANCHISE LAW REVIEW
THE PRODUCT REGULATION AND LIABILITY REVIEW
THE SHIPPING LAW REVIEW
PUBLISHER Gideon Roberton
BUSINESS DEVELOPMENT MANAGERS Adam Sargent, Nick Barette
SENIOR ACCOUNT MANAGERS Katherine Jablonowska, Thomas Lee, James Spearing
ACCOUNT MANAGER Felicity Bown
PUBLISHING COORDINATOR Lucy Brewer
MARKETING ASSISTANT Chloe Mclauchlan
EDITORIAL ASSISTANT Shani Bans
HEAD OF PRODUCTION Adam Myers
PRODUCTION EDITOR Caroline Rawson
SUBEDITOR Janina Godowska
MANAGING DIRECTOR Richard Davey
Published in the United Kingdom by Law Business Research Ltd, London
87 Lancaster Road, London, W11 1QQ, UK© 2014 Law Business Research Ltd
www.TheLawReviews.co.uk No photocopying: copyright licences do not apply.
The information provided in this publication is general and may not apply in a specific situation, nor does it necessarily represent the views of authors’ firms or their clients.
Legal advice should always be sought before taking any legal action based on the information provided. The publishers accept no responsibility for any acts or omissions
contained herein. Although the information provided is accurate as of July 2014, be advised that this is a developing area.
Enquiries concerning reproduction should be sent to Law Business Research, at the address above. Enquiries concerning editorial content should be directed
to the Publisher – [email protected]
ISBN 978-1-909830-08-0
Printed in Great Britain by Encompass Print Solutions, Derbyshire
Tel: 0844 2480 112
i
The publisher acknowledges and thanks the following law firms for their learned assistance throughout the preparation of this book:
ALLEN & OVERY LLP
ANDERSON MŌRI & TOMOTSUNE
ARAQUEREYNA
BASHAM, RINGE Y CORREA, SC
BOWMAN GILFILLAN
BRIGARD & URRUTIA
CLAYTON UTZ
CLIFFORD CHANCE
DAVIS LLP
DENTONS
EISENBERGER & HERZOG RECHTSANWALTS GMBH
ERDEM & ERDEM LAW OFFICE
ESTUDIO BECCAR VARELA
GALADARI ADVOCATES & LEGAL CONSULTANTS
GUYER & REGULES
HILL INTERNATIONAL, INC
J SAGAR ASSOCIATES
K&L GATES
LINKLATERS LLP
ACKNOWLEDGEMENTS
Acknowledgements
ii
LLS LUNGERICH LENZ SCHUHMACHER RECHTSANWÄLTE
MAPLES AND CALDER
MCCULLOUGH ROBERTSON LAWYERS
MILBANK, TWEED, HADLEY & MCCLOY LLP
MOLINA RÍOS ABOGADOS
PECKAR & ABRAMSON, PC
PINHEIRO NETO ADVOGADOS
PLESNER LAW FIRM
ROYAL INSTITUTION OF CHARTERED SURVEYORS
SHIN & KIM
SSEK LEGAL CONSULTANTS
STIBBE
THIRTY NINE ESSEX STREET CHAMBERS
VIEIRA DE ALMEIDA & ASSOCIADOS, SOCIEDADE DE ADVOGADOS, RL
WALDER WYSS LTD
ZHONG LUN LAW FIRM
iii
Editor’s Preface ..................................................................................................viiJúlio César Bueno
Chapter 1 INTERNATIONAL PROJECT FINANCE ..............................1Phillip Fletcher and Andrew Pendleton
Chapter 2 DISPUTE RESOLUTION IN CONSTRUCTION PROJECTS ...............................................................................13
Robert S Peckar and Denis Serkin
Chapter 3 RELATIONSHIP CONTRACTING ......................................23Doug Jones
Chapter 4 A GUIDE TO ALTERNATE PROJECT DELIVERY SYSTEMS .............................................................33
Maurice Masucci, Frank Giunta, and David Price
Chapter 5 STANDARDS FOR THE MEASUREMENT OF LAND AND BUILDINGS ................................................51
Alexander Aronsohn, Ben Elder and Marcia Ferrari
Chapter 6 THE NEED FOR INTERNATIONAL CONSTRUCTION MEASUREMENT STANDARDS .........69
Matthew Saunders and Alan Muse
Chapter 7 ARGENTINA ...........................................................................80Pedro Nicholson
Chapter 8 AUSTRALIA .............................................................................91Matt Bradbury, Kristen Podagiel, Hayden Bentley, Tim Hanmore, Emma Murray, Liam Davis, Meg Morgan and James Arklay
CONTENTS
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Contents
Chapter 9 AUSTRIA ...............................................................................105Alric A Ofenheimer and Michael Strenitz
Chapter 10 BELGIUM ..............................................................................118Rony Vermeersch and Diederik De Block
Chapter 11 BRAZIL ..................................................................................130Júlio César Bueno
Chapter 12 CANADA ...............................................................................152Ian Bendell, Andrew Burton, Bruce Darlington, Lana Finney, David Foulds, James Kelsall, Howard Krupat, Elizabeth Mayer and Mitchell Mostyn
Chapter 13 CHILE ....................................................................................167Victor Ríos and Carlos Molina
Chapter 14 CHINA ...................................................................................179Zhu Maoyuan and Zhang Jiong
Chapter 15 COLOMBIA...........................................................................194Carlos Umaña, María Luisa Porto, César Rodríguez and Juan Martín Estrada
Chapter 16 DENMARK ............................................................................208Peter Wengler-Jørgensen, Maygan Mike Lundgaarde and Daniel Hedegaard Nielsen
Chapter 17 FRANCE ................................................................................222Paul Lignières, Mark Barges, Pierre Guillot and Darko Adamovic
Chapter 18 GERMANY ............................................................................232Rouven F Bodenheimer and Claus H Lenz
Chapter 19 INDIA ....................................................................................244Dina Wadia and Divyanshu Pandey
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Contents
Chapter 20 INDONESIA ..........................................................................258Darrell R Johnson, Ade B Adamy and Awang F Bahrin
Chapter 21 IRELAND...............................................................................272Conor Owens, Mary Dunne and Michael Kennedy
Chapter 22 ITALY .....................................................................................284Francesco Sanna, Anna Amprimo and Carolina Teresa Arroyo
Chapter 23 JAPAN ....................................................................................301Tetsuya Itoh, Reiji Takahashi and Tetsuro Motoyoshi
Chapter 24 KOREA ...................................................................................313Michael Chang, Sang-Hyun Lee and Seung-Gyu Yang
Chapter 25 MEXICO ................................................................................324Juan Carlos Serra and Francisco Javier González
Chapter 26 NETHERLANDS ..................................................................342Frédérique Jacobse, Zeeger de Jongh, Werner Runge and Arent van Wassenaer
Chapter 27 PORTUGAL ...........................................................................354Manuel Protásio, Teresa Empis Falcão and Frederico Quintela
Chapter 28 QATAR ...................................................................................368Andrew Jones, Zaher Nammour and Sarah Stewart
Chapter 29 SOUTH AFRICA ...................................................................381Anton Barnes-Webb, Rob Morson, Lido Fontana and Daryn Webb
Chapter 30 SPAIN .....................................................................................393José Guardo and Alejandro León
Chapter 31 SWITZERLAND ...................................................................406Thomas Mueller-Tschumi and Francis Nordmann
Contents
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Chapter 32 TURKEY ................................................................................417H Ercument Erdem
Chapter 33 UNITED ARAB EMIRATES .................................................429Dr Daniel Brawn
Chapter 34 UNITED KINGDOM ...........................................................443David Brynmor Thomas, Alexandra Bodnar and Rebecca Drake
Chapter 35 UNITED STATES .................................................................456Carolina Walther-Meade, Karen Wong, Henry Scott and Miguel Duran
Chapter 36 URUGUAY .............................................................................478Beatriz Spiess
Chapter 37 VENEZUELA.........................................................................490Pedro Ignacio Sosa Mendoza, Pedro Luis Planchart, Verónica Díaz Hernández and Rodrigo Moncho Stefani
Appendix 1 ABOUT THE AUTHORS .................................................... 503
Appendix 2 CONTRIBUTING LAW FIRMS’ CONTACT DETAILS .. 537
Appendix 3 GLOSSARY OF TERMS ....................................................... 543
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EDITOR’S PREFACE
La meilleure façon d’être actuel, disait mon frère Daniel Villey, est de résister et de réagir contre les vices de son époque. Michel Villey, Critique de la pensée juridique moderne (Dalloz (Paris), 1976).
This book has been structured following years of debates and lectures promoted by the International Construction Law Committee of the International Bar Association (ICP), the American College of Construction Lawyers (ACCL), the Society of Construction Law (SCL), the Dispute Resolution Board Foundation (DRBF) and the American Bar Association’s Forum on the Construction Industry (ABA). All of these institutions and associations dedicated themselves to promoting an in-depth analysis of the most important issues related to projects and construction law practice and I thank their leaders and members for their important support in the preparation of this book.
Project financing and construction law are relatively young, highly specialised areas of legal practice. They are intrinsically functional and pragmatic and require the combination of a multitask group of professionals – owners, contractors, bankers, insurers, brokers, architects, engineers, geologists, surveyors, public authorities and lawyers – each bringing their own knowledge and perspective to the table. That is why I am very happy to present you non-lawyers’ chapters specifically prepared for the introductory part of this book: ‘The Need for International Construction Measurement Standards’ by Matthew Saunders and Alan Muse at the Royal Institution of Chartered Surveyors (RICS). Frank Giunta, Maurice Masucci and David Price, senior representatives from Hill International, offer us ‘A Guide to Alternate Project Delivery Systems’ and Alexander Aronsohn, Ben Elder and Marcia Ferrari, senior representatives from RICS demonstrate some innovative approaches to spatially enabling land administration and management.
These chapters provide further breadth to the variety already produced by Robert S Peckar (Peckar & Abramson), Douglas S Jones (Clayton Utz) and Phillip Fletcher (Milbank, Tweed, Hadley & McCloy LLP), three leading professionals and lecturers in the field of project finance and construction law. Despite living miles away from each other – in the heartlands of the United States (Bob), the United Kingdom (Phillip) and
Editor’s Preface
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Australia (Doug) – they have equally influenced the main players in project financing in dealing with the complex issues related to the development and implementation of projects, the negotiation of construction and engineering contracts and the challenges of crafting the perfect financing package.
I am also glad to say that we have contributions from two new jurisdictions in this year’s edition: Indonesia and Turkey. Although there is an increased perception that project financing and construction law are global issues, the local flavour offered by leading experts in 31 countries has shown us that in order to understand the world we must first make sense of what happens locally; to further advance our understanding of the law, we must resist the modern view (and vice?) that all that matters is global and what is regional is of no importance. Many thanks to all the authors and their law firms that graciously agreed to participate.
Finally, I dedicate this forth edition of The Projects and Construction Review to Dr Kris R Nielsen, PhD, JD, PMP, MRICS, MJSCE, and Dr Sérgio Alfredo Rosa da Silva, professor at the prestigious University of São Paulo Engineering School. Both passed away last year.
I had the honour of working with both of them and it was a remarkable and unique experience to learn how to deal with projects with a global and strategic perspective on risk management and best practices. They spent their career working towards bettering the construction industry and worked tirelessly to promote the areas of law and engineering with a view to their joint futures.1
Dr Nielsen and Dr Rosa da Silva will be greatly missed.I look forward to your comments and contributions for the forthcoming editions.
Júlio César BuenoPinheiro Neto AdvogadosSão PauloJuly 2014
1 Dr Nielsen co-edited and authored an important book entitled Managing Gigaprojects – From Those That Have Been There Done That, published by ASCE Press in October 2012, which is already considered a classic and a great reference for those working in the field. In the words of his beloved wife Dr Patricia Galloway: ‘Dr Nielsen was a global leader in helping contractors and owners to define what makes a successful project. He helped them examine their operations and how to address subjects like risk management, execution, project controls, value engineering, corporate strategy, construction law, dispute resolution, project sustainability, etc. While on assignments, he worked with his clients to help select younger members of their organisation, i.e., to mentor in how to achieve project success. Dr Nielsen derived great satisfaction in knowing there was a growing cadre of people who were learning and then practising their new-found skills while striving for project success.’ See www.pegasus-global.com/personnel/.
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Chapter 12
CANADAIan Bendell, Andrew Burton, Bruce Darlington, Lana Finney, David Foulds,
James Kelsall, Howard Krupat, Elizabeth Mayer and Mitchell Mostyn1
I INTRODUCTION
At the federal, provincial and municipal levels, Canada continues to be a robust environment for infrastructure projects generally and the use of the public-private partnership (PPP) model in particular. As facilitated in several jurisdictions by specialised government agencies, billions of dollars worth of significant infrastructure projects spanning energy, transportation, courthouses, prison facilities, health care, schools and other municipal buildings are either now in operation, well under construction or in the advanced planning stages.
A central component to this development is the federal government’s New Building Canada Plan. In 2014, Infrastructure Canada has affirmed a total of C$70 billion in funding for infrastructure over the next decade, spread out among the federal, provincial, territorial and municipal levels.2 At the time of writing, there are approximately 130 PPP projects at various stages of planning and construction in Canada.
II THE YEAR IN REVIEW
The PPP model continues to be an important element of infrastructure projects in Canada. In the past year, new jurisdictions within Canada have started to use this model to procure significant infrastructure projects. This includes an increasing use of the PPP model by municipalities, particularly in the wastewater and transportation sectors.
1 Ian Bendell, Andrew Burton, Bruce Darlington, Lana Finney, David Foulds, Howard Krupat, Elizabeth Mayer and Mitchell Mostyn are partners and James Kelsall is an associate lawyer at Davis LLP.
2 www.infrastructure.gc.ca/plan/nbcp-npcc-eng.html.
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For example, in addition to the established specialist PPP units such as Partnerships British Columbia, Infrastructure Ontario and PPP Canada, the provincial government of Saskatchewan established SaskBuilds as a Crown corporation in October of 2012.3 As with other such agencies, the mandate of SaskBuilds is to plan and facilitate high-cost, high-priority infrastructure projects. Its project list already includes a major highway project (the Regina Bypass), hospitals and the construction of nine joint-use elementary schools.
The past year also included a potentially significant development in procurement law. The unique Canadian rules around competitive tendering are described below. However, a common debate is the extent to which an owner owes bidders a duty of fairness during the tendering process and the manner in which this duty is to be interpreted. In a very lengthy and factually complex 2013 trial decision, an Ontario Court held that an owner did not comply with its duty of fairness prior to the award of a contract, thereby entitling an unsuccessful bidder to damages for its lost profits – in the staggering sum of approximately C$30 million.4
In another very recent Ontario decision that is attracting some attention, it was held that a claim against a performance bond for an amount that is well in excess of the penal sum of the bond is a triable issue and that the corresponding claim of the plaintiff ought not to be dismissed on a preliminary motion.5 This decision will be of interest in circumstances where there is an allegation that a bonding company has failed to comply with its obligations under a performance bond in the face of an insolvency or other default event under a construction contract.
Overall, the significant level of project activity in Canada, together with continuing developments of interest in construction and infrastructure law, have set the table for an intriguing year ahead.
III DOCUMENTS AND TRANSACTIONAL STRUCTURES
i Transactional structures
The most commonly used project finance models in Canada all share a basic framework. They typically include a governmental or quasi-governmental entity contracting with a private entity, usually structured as a special purpose vehicle (SPV), to complete the project based on a grant of a concession or licence. The SPV then subcontracts the works involved in the project, passes the risks and liabilities down to its subcontractors and enters into financing arrangements to fund the project, typically based on a combination of senior debt (either bank loans or capital markets debt) and equity financing.
Larger projects, including those structured as a PPP, often follow a design-build-finance-maintain (DBFM) model, which can sometimes also include an operational component (design-build-finance-operate (DBFO) or design-build-finance-operate-maintain (DBFOM)). In a DBFM project, the term of the concession or licence
3 www.saskbuilds.ca.4 Envoy Relocation Services v. Canada 2013 ONSC 2034 (SCJ).5 OHL Construction Canada v. Continental Casualty Company et al. 2013 ONSC 4043 (SCJ).
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granted by the governmental authority typically lasts for around 30 years after the initial construction phase. During the period of the concession after construction, the SPV maintains and operates the asset in return for payments usually based on an availability/performance deduction regime and, at the end of the concession, the asset is returned to the governmental authority based on specified handback requirements. An increasingly common model in Canada for smaller scale projects is the design-build-finance (DBF) or build-finance (BF) model. In these types of projects, there is no long-term concession and the agreement with the governmental authority typically comes to an end after a short (one or two-year) warranty period following construction completion. The financing structures for these types of projects are necessarily different as there is no long-term cash flow available on DBF or BF projects. DBFM projects are usually financed through a combination of short-term and long-term senior debt (depending on whether there is a take-out payment offered by the governmental authority upon construction completion) and equity financing. DBF and BF projects are usually financed through short-term construction financing (either bank loan or bond) with no equity or only limited equity financing. Beyond the DBFM, DBFOM, DBF and BF models, there is the option for complete privatisation, whereby the governmental authority transfers all responsibilities with respect to a given piece of infrastructure to the private sector.
ii Documentation
The specific set of documents for the above types of projects varies depending on the model used, but key documents usually include the project agreement or concession agreement, credit agreements or trust indentures, underwriting agreements, ‘drop-down’ subcontracts (usually a construction contract and an operations, maintenance and rehabilitation agreement), interface agreement, direct agreements between lenders and subcontractors and collateral agreements between the governmental authority and subcontractors. These are in addition to typical security documentation such as general security agreements, letters of credit, performance bonds and guarantees. Finally, depending on the project, a variety of other documentation may be required, such as equity contribution agreements, legal opinions, officer’s certificates, and various corporate/partnership documentation required to establish the SPV and any other entities in the structure.
iii Delivery methods
The procedure for awarding contracts in Canada varies depending on the project and the procuring governmental authority; however, PPP projects are nearly always awarded through a prescribed and highly regulated competitive procurement process. The procurement process often follows a process whereby expressions of interest are sought initially, followed by a request for qualifications (RFQ) phase which will be used to determine a shortlist of selected bidders who are then invited to participate in a request for proposals (RFP) phase, the outcome of which will be the selection of a preferred proponent who will enter into the project agreement or concession agreement with the governmental authority. Unlike some other jurisdictions, the RFP phase in Canada often results in a ‘final’ version of the project agreement or concession agreement which proponents bid to and is rarely renegotiated in any substantial way after the selection of
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the preferred proponent. This process leads to relatively rapid closing times, with projects often proceeding from selection of preferred proponent to financial close in two months or less.
IV RISK ALLOCATION AND MANAGEMENT
i Management of risks
The nature of the risks that the private and public sectors are required to manage on project finance transactions varies from deal to deal, but the principle that a risk resides with the party that is most efficiently able to manage it usually holds sway. For example, the governmental authority usually manages the risk of providing the lands for the project whereas the private sector entity usually manages the risk for construction methods and means. Design risk may reside with either the public or private sector entity or may be shared. Contamination risk is often also shared with the governmental authority managing the risk of unidentified pre-existing contamination and the private sector entity being responsible for any specifically identified contamination or new contamination caused by those under its control. The specific risk allocation is often the subject of relatively heavy negotiation during the RFP phase described above.
As between the SPV and the lenders, the lenders usually require that no risks be stranded with the SPV, without assurance that those risks have been quantified and provided for by way of contingency or insurance. The goal is to protect the cash flows available to lenders by passing the risks to the SPV’s subcontractors or, if negotiations are still active, the governmental authority.
ii Limitation of liability
Parties to project finance transactions in Canada limit their liability through contract in a variety of ways. As between the governmental authority and the private sector entity, there is often a mutual cap on liability built into the project agreement or concession agreement. The subcontractors are also often protected by limits of liability both in terms of time (e.g., construction warranty periods) and amount (such as an overall or annually refreshing liability cap).
iii Political risks
Canada’s relatively high degree of political stability means that, once a project is up and running, there is relatively little risk of nationalisation or expropriation of assets by the government. In addition, Canada’s property laws grant foreign lenders and investors essentially the same rights to own and manage property enjoyed by Canadian citizens. There is often a notional risk that a government authority may not appropriate the required funds to pay for the project, as a government authority’s payment obligations are often subject to them having budgeted for and appropriated the necessary funds for the purpose. However, such appropriation risk is rarely considered to be a significant risk factor in practice. The bulk of Canadian PPP projects so far have been procured at a provincial level; however, more public sector entities are entering the market at different levels of government, such as municipalities and local authorities, so the consideration of political risk is changing consequently. During the procurement phase
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there can be significant political risks from interference by various private parties whose interests might be affected by a given project. These groups can include various lobbyists, environmental activists, those with aboriginal-rights claims and politicians who oppose the project. There is also the possibility that a change in government following a provincial or federal election may impact the procurement of a given project. Sometimes these risks are mitigated through the payment of a break fee to bidders in order to defray some of the costs incurred in pursuing the competitive bid for the project in the event that the procurement is cancelled.
V PROJECT SECURITY AND PERFORMANCE SUPPORT
Lenders advancing funds to construction projects regularly require security over the assets that are being funded. In Canada, security interests are capable of being obtained and perfected over almost all types of property, personal or real. The legislative framework relating to security is unique to each province and, in the case of security over personal property, is set out in specific Personal Property Security Acts particular to each province.
However, due to the public nature of the assets involved in large-scale infrastructure projects procured by provincial (and, increasing, municipal) governments, it is common for no real interest in the underlying infrastructure to be granted in favour of the SPV that is to carry out the project. Indeed, in almost all cases, the government grants only a contractual licence in favour of the project vehicle to come onto the relevant property where the infrastructure is being developed for the purposes of carrying out the necessary construction, maintenance and life-cycle activities. In these cases, no security interest may be granted by the project vehicle in the physical assets that are being developed, but only in the agreement pursuant to which the public sector counterparty agrees to pay for the infrastructure that is being constructed and maintained.
Accordingly, lenders typically look to the following for appropriate security:a general security agreements (GSA), pursuant to which the project vehicle grants
security in all its property and assets, including in particular the project agreement where the public sector authority and the project vehicle’s rights and entitlements thereunder, including the right to any payment due from the public sector authority during the construction period and throughout the period that the infrastructure is being operated;
b a security interest, usually in the form of a pledge, over the shares (in the case of companies) or units (in the case of partnership vehicles) in the project vehicle, so that, on any enforcement scenario, the lenders can assume direct control over the project vehicle;
c direct agreements, pursuant to which, if the public authority has a right to terminate the project agreement, it will, prior to any such termination, first allow the lenders an opportunity to step in and cure the default that has led to the right to terminate;
d parent company guarantees from the parents of the entities that contract with the project vehicle for the construction, maintenance and operation of the project facility or infrastructure;
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e liquid security, usually in the form of a standby letter of credit that allows access to cash to find a replacement contractor or at least to fund debt service for a defined period while a replacement contractor is found; and
f direct agreements with the major subcontractors to the project vehicle, pursuant to which the major subcontractors agree not to terminate their contracts with the project vehicle on a default until the lenders have been given an opportunity to step in and cure the default.
The performance security referred to in (d) and (e) above is often provided direct to the project vehicle, with the lenders taking a security interest in the same under the GSA referred to in (a). Lenders will often also require control over all the project accounts through which funds will flow relating to the project and will require the project vehicle to enter into blocked accounts agreements, pursuant to which a trustee on behalf of the lenders will control the movement of funds through such accounts.
VI BONDS AND INSURANCE
i Insurance
A robust insurance programme is an essential component of any construction or public infrastructure project undertaken in Canada. In the context of Canadian PPPs, the public sector owners, the equity providers and their lenders are equally interested in ensuring that many of the key risks that can threaten the project schedule or lead to significant cost overruns are insured against by the appropriate project participants. The significant pipeline of Canadian PPP projects over the past several years has led to the development of a sophisticated project insurance market and insurance programmes that are responsive to the needs and risk sensitivities of the project participants. To this end, certain jurisdictions within Canada have instituted, or are considering the use of, a standard mandatory construction period insurance programme for their PPPs. Depending upon the project in question and the demands and risk tolerance of the procuring authority, certain of the insurances for the project may be covered, in whole or in part, by the relevant construction contractor’s or service provider’s corporate umbrella policy or by project specific insurance. In the context of PPPs, proof of insurance is required as a condition precedent to commercial or financial close, and a failure to obtain or to maintain or replace any required insurances is often identified in the contractual documentation as a default significant enough to warrant early termination.
ii Bonding and sureties
Insurance requirements are typically complemented by bonding requirements. Bonds are commonly used as a means of providing security in Canadian construction and public infrastructure projects. In a standard transaction, the owner (and often the lenders to the project) will require the general contractor or the key subcontractors to provide one or more types of surety bonds to secure their respective obligations under the construction contract or applicable subcontract.
In the most basic sense, a ‘bond’ is a deed, or physical, written document, signed sealed a delivered, in which one party promises to pay to another, a specified sum of
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money either immediately or on a date in future. The ‘signed, sealed and delivered’ requirement is relatively strict. When receiving a bond, it is important to ensure it has been signed and sealed by the appropriate individual. Traditionally, bonds could only be delivered by hand, but recently some Canadian jurisdictions have adopted legislation that makes electronic delivery possible. The availability of electronic delivery needs to be considered on a province-by-province basis. Bonds are not operative until delivered.
Broadly speaking, there are two main types of bonds: the ‘single bond’, which involves only the obligation to pay a sum of money specified on the face of the bond, and the double bond, which adds to this requirement a condition. In a double bond the monetary obligation is framed as a penalty that must be paid in the event the associated condition is not satisfied.
The typical surety bond involves three parties: the principal (contractor), the obligee (owner), and the surety (guarantor). The primary obligation described in the bond (for example, constructing the facility in question) is owed by the principal to the owner, and the principal’s performance is guaranteed by the surety.
There are four types of bonds commonly used in the Canadian construction industry: bid bond, performance bond, labour and material payment bond, and lien bond. A standard form for each type of bond (prepared by a national Canadian construction committee (CCDC)) is available for use in most of the Canadian provinces.
Bid bondsA bid bond secures the obligation of a bidding contractor to make good on a contract in the event it is awarded to them. The surety promises the obligee that if the principal is awarded the contract in question, it will enter into that contract. In the event the principal does not do so, the surety must pay to the obligee the penalty specified in the bid bond. The amount is intended to cover, in part, the difference between the principal’s tender price and the tender price of the next highest ranked bidder that is awarded the contract.
Performance bondsA performance bond secures the obligation of a contractor to actually perform its obligations under a contract into which it has entered. In this case the surety guarantees to the obligee that the principal will perform its obligations under a given construction contract, in accordance with terms outlined on the face of the bond. Performance bonds are generally used by owners to secure the obligations of contractors, but can also be used by a general contractor to secure the performance of a subcontractor.
Labour and material payment bondsLabour and material payments bonds are used to ensure that the accounts of certain subcontractors will be paid by the general contractor with respect to a given project. The principal is usually the general contractor, the obligee is the owner, and the surety is the contractors’ guarantor. The surety guarantees that the principal will pay all amounts owed to ‘claimants’ (generally subcontractors or tradesmen) in accordance with conditions laid out on the face of the bond. The surety’s obligations under a labour and material payment bond are unrelated to their obligations under a performance bond. Essentially, if the general contractor pays its tradespeople as it is supposed to under the
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relevant subcontracts, the obligation under the labour and material payments bond will not crystalise.
Lien bondsA lien bond guarantees, usually to a court, that any payments owed to claimants with respect to a given lien will be paid. This allows construction liens against a property to be removed before the actual lien claim itself has been resolved. Essentially the contractor promises to pay to the lien claimant an amount equal to the lien itself if the claimant can prove their claim under the terms of the applicable provincial construction lien legislation.
VII ENFORCEMENT OF SECURITY AND BANKRUPTCY PROCEEDINGS
A secured project lender has a number of different avenues that it should consider when it is contemplating enforcing its rights under its security over a project or other collateral. Which avenue will be most appropriate will depend on the circumstances at the time. Various factors need to be taken into account including prior registered interests, if any, whether any environment concerns exist and whether there exists any statutory claims such as governmental claims for unpaid employee remittances that would take priority to the secured project lender as well as practical factors such as costs of the proceeding as compared to likely recoveries.
The secured lender has the same rights as any creditor to commence a court proceeding against the borrower to recover the amount it is owed. In addition, a secured lender typically has remedies under the terms of its security documents and under provincial personal property security legislation. These remedies usually include the right to take possession of and retain or sell the collateral as well as the right to appoint a receiver or receiver and manager over some or all of the borrower’s assets and business.
In some circumstances, a receiver is appointed in conjunction with bankruptcy proceeding and sometimes as a stand-alone process. A receivership can be initiated by a secured creditor under its security without the involvement of the courts or a receivership can be initiated by a court order. In either instance, an individual or firm is appointed for a specific purpose or purposes from as broad as running the business of the debtor to as narrow as selling a specific assets of the debtor. If the receiver is running the business of the debtor it is usually referred to as a receiver manager.
In addition, in Canada, there are two major federal statutes governing commercial liquidation and restructuring, the Bankruptcy and Insolvency Act (BIA) and the Companies’ Creditors Arrangement Act (CCAA).
There are two distinct processes under the BIA. There is ‘bankruptcy’, which is a liquidation process involving the appointment of a ‘trustee’ who supervises the liquidation of the assets of the debtor and the distribution of the resulting proceeds in accordance with a statutory priority scheme. There is also a ‘proposal’ process under the BIA, in which the debtor can, in a court supervised process, stay any proceeding against it for a period of time and ultimately put forward an offer, called a ‘proposal’, to its creditors for some form of compromise which is ultimately voted upon by the creditors.
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The CCAA provides for a process very similar to the BIA proposal process but with additional flexibility. The CCAA process is only available to companies that have total liabilities exceeding C$5 million. The CCAA proceeding is generally used in the larger and more complex restructurings as it allows the court a great deal of discretion in determining the process, procedure and impact of the proceeding. Ultimately, the goal of a CCAA proceeding, like the proposal process, is for the debtor to put forward an offer to its creditors for some form of compromise which is ultimately voted upon by the creditors.
VIII SOCIO-ENVIRONMENTAL ISSUES
i The implications of environmental law
Canadian lawmakers regulate the environment at three different government levels: federal, provincial and municipal, all geared to the protection of air, land, surface and ground water, and the reduction of risks to humans and wildlife from exposure to contaminants. One of the main mechanisms through which this is achieved is a broad prohibition on the discharge of contaminants to the environment that may cause an adverse effect. ‘Contaminants’ is very broadly defined and can include noise, dust and vibration, common occurrences in any construction project. As a result, many activities, including industrial operations and construction projects, require governmental approval to permit the release of these contaminants into the environment, up to prescribed maximums, subject to certain conditions including monitoring and reporting, as well as the posting of financial security to guarantee compliance.
Formal environmental assessment is a mandatory precursor to many public and private developments. Comprehensive studies are required demonstrating that the impact of the project to the environment does not exceed an unacceptable level, taking into account any planned mitigation measures. The environmental assessment process can occur at both the federal and provincial levels. The law mandates varying degrees of public participation, with the potential for significant delay to projects. With recent amendments to its legislation, the federal government has sought to reduce the overlap between federal and provincial reviews in some sectors, and minimise the potential for delays due to public participation and resulting in a greater likelihood of project approval.
Persons in management or control of a property or undertaking (as well as those formerly in these positions), such as corporations and their directors and officers, are subject to a broad range of statutory and civil liability arising out of non-compliance with environmental laws and/or the presence of contamination. There are two principal sources of statutory liability imposed by Canadian environmental laws: ‘offence liability’, which can lead to fines and/or jail time (very rarely) and ‘remediation liability’, requiring a party to clean up contaminated property. Corporations can also have civil liability for any contamination at its property that causes harm to third parties. This liability is enforced through the civil courts by private lawsuit.
Lenders can also be held liable for environmental matters, though the circumstances are significantly narrower than the liability faced by corporations, directors and officers, unless the lender exercises management or control over the property. Generally speaking, the liability arises due to involvement with the property after the debtor’s default and/
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or insolvency, or a failure to disclose information within their knowledge regarding environmental issues associated with the property or non-compliance with environmental laws.
While the major Canadian financial institutions have adopted the Equator Principles, and its risk management framework, this does not mean they are always applied to project finance transactions within Canada. Their application to projects that are to be project financed is often a matter of negotiation, as they can increase the cost of borrowers’ design and construction requirements beyond what is required by the ultimate client (often a public authority) and so may reduce the competitiveness of a compliant borrower, which, if such borrower is involved in a public procurement for the relevant project, can be counterproductive.
Given the Canadian regulatory regime, and its emphasis on corporate responsibility for environmental issues, which, in some instances is without regard to who caused the contamination, and the extension of this liability to directors and officers, thorough due diligence and careful contract drafting with respect to the allocation of environmental liabilities is advised.
ii The impact of aboriginal law
Aboriginal law often affects the development of land and natural resources in Canada, as our constitution recognises and protects aboriginal and treaty rights. As a result, undertaking development in relation to reserve lands or lands subject to aboriginal interests and/or claims requires adherence to specific legislative and regulatory requirements, including a required consultation process. This ‘duty to consult’, which is owed by the federal government, and the requirement to accommodate aboriginal and treaty rights that may arise from the consultation process, must be discharged by the government prior to the granting of approval for a project or it can result in the approval being vitiated. This duty, or components of it, along with the accommodation, is frequently delegated to project proponents.
IX PPP AND OTHER PUBLIC PROCUREMENT METHODS
i PPP
There is no overarching statutory or regulatory framework for PPP transactions in Canada. Each jurisdiction has its own rules on whether and how projects qualify for PPP status and funding. Many jurisdictions have established specialist PPP units, such as Partnerships British Columbia, Infrastructure Ontario and PPP Canada. This lack of an overarching framework has meant that the documents in use in PPP projects in Canada vary from jurisdiction to jurisdiction. There are standard documents used in British Columbia, Alberta and Ontario, each with their own particular characteristics. New jurisdictions tend to adopt one of these formats, and then adapt it to their own use, leading to increasing variations.
In contrast, however, projects across the country follow a similar procurement process. There is usually a request for qualifications, leading to a short list of three or four proponents. These proponents respond to a request for proposals. One key feature of the Canadian market is the requirement for committed funding at the time proposals are
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submitted. This results in a short closing time, with most projects being closed within six to eight weeks of the preferred proponent being announced.
Significant projects in 2013 included the Ottawa Light Rail Project, a project for the construction of a new light rail system within the city of Ottawa, together with various highway and other infrastructure improvements, the Iqaluit International Airport, the first P3 to close in Canada’s north, and the Single-Room Occupancy Renewal Initiative, a social infrastructure project in British Columbia.
ii Public procurement
Procurement law in Canada is primarily contract-based, in contrast to other jurisdictions with statutory or regulatory oversight. When a bidder submits a tender or proposal, provided this tender or proposal is compliant with the procurement documents, a contract comes into existence between the bidder and the procuring body (known as Contract A). The terms of Contract A are governed primarily by the procurement documents, although the Canadian courts have implied certain key terms into Contract A: notably, a duty to treat all bidders fairly and equally, a duty to act in good faith and a duty to apply the terms of the procurement documents as they are written. The one key point to note is that these provisions apply equally to private sector entities that are procuring goods and services, as they do to public authorities.
Typically for a Canadian procurement, an action will be brought in the courts by the bidder for a breach of Contract A, or, in the case of public procuring authorities, potentially for judicial review. Usually, an action is brought after contract award, as there is no requirement to notify bidders in advance of contract award. As a result, the most usual remedy is in damages, potentially for lost profit, if a bidder can show that they would have been awarded the contract.
For federal procurements, an action may be brought in the Canadian International Trade Tribunal (CITT), for a breach of a trade agreement. This might be for a breach of the Agreement on Internal Trade, where the bidder is a Canadian entity, or for one of the international trade treaties to which Canada is a party, such as the North American Free Trade Agreement. Actions in the CITT must be brought within 14 days of being aware of a claim. As a result, claims in the CITT are often brought at earlier stage, for example, bringing a challenge during the proposal phase claiming that provisions in a request for proposals are in breach of a trade agreement. Again, however, there is no obligation to notify bidders of an award in advance, and accordingly, claims are also brought to the CITT for damages.
X FOREIGN INVESTMENT AND CROSS-BORDER ISSUES
Foreign entities looking to expand their business or invest in Canada need to take steps to ensure they understand and comply with the legal and regulatory controls to which they will be subject. Chief among these are requirements relating to business registration, restrictions placed on foreign investments, and issues relating to taxation.
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i Business structure
Generally speaking, a foreign business seeking to expand into Canada may do so in one of two ways. Either the foreign entity can establish a branch operation in Canada through which it conducts its business directly, or it can create a separate business vehicle in Canada (such as a partnership, unincorporated joint venture or corporate subsidiary), through which it can carry on its operations. Each arrangement has advantages and disadvantages, and selection of the appropriate structure will depend on a variety of factors, including the nature of the business itself, and the tax regime in the foreign business’s home country. The most common structures are operation through a branch of the foreign corporation, and operation through a Canadian subsidiary corporation. If the foreign business chooses to establish a Canadian subsidiary corporation, there are additional issues to consider, such as whether to incorporate federally or in one of Canada’s provinces or territories. Canadian federal and provincial laws share a number of general similarities, however there are some important differences, such as applicable tax rates, and residency requirements for directors. If the foreign corporation decides to establish a branch in Canada rather than a corporation or other business vehicle, it will required to register as an extra-provincial corporation in the province in which the branch is located.
ii Foreign investment
Foreign investment in Canada is regulated by Investment Canada Act (ICA). Similar to investment-regulatory legislation found in other developed jurisdictions (though perhaps less onerous), the ICA is designed to protect Canadian businesses and industries by providing a mechanism by which the federal government can monitor, and in some cases limit foreign investment in Canada. Generally speaking the ICA is relevant only to larger transactions, such as the acquisition of a Canadian company with assets valued above a certain threshold which varies according to certain factors, including whether the foreign entity is based in a WTO Member State or not. A transaction subject to review under the Investment Canada Act will be evaluated according to whether or not it will provide a ‘net-benefit’ to Canada. This determination is made by application of a number of factors, such as the potential for Canadian involvement in the business and the impact the transaction will have on competition within the relevant Canadian industry. There are no exchange controls in Canada, which means, subject only to withholding tax requirements (see below), Canadian currency can be freely exchanged for any foreign equivalent, and sent abroad. Finally, the Investment Canada Act imposes additional restrictions on investment on certain industries identified as being of particular economic or strategic importance, such as financial services, or broadcasting and telecommunications.
iii Taxation issues
There are several different levels of taxation to which a foreign business operating in Canada may be subject under Canada’s Income Tax Act. In the main, foreign corporations operating in Canada are considered ‘non-residents’ for tax purposes. This means they are required to pay income tax only on the income generated from their activities in Canada, which includes business operations, as well as investments and taxable capital
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gains. Taxable capital gains may include, inter alia, amounts realised on Canadian real estate and resource property, assets in a business being carried on in Canada, and capital interests in a Canadian partnership or trust.
Withholding tax is applied to certain payments made by Canadian corporations to non-residents, including rent, dividends, royalties and interest payments. Typically, the withholding tax rate is roughly 25 per cent; however if the foreign recipient resides in a country that has signed a tax treaty with Canada, the terms of that treaty may allow this rate to be reduced or with respect to royalties, removed altogether. Where a payment is subject to withholding tax, the Canadian corporation is responsible for withholding the necessary amount and remitting it; however, the tax liability itself falls on the non-resident recipient. Where a foreign corporation operates through a branch in Canada rather than a subsidiary corporation, it will be taxed at the normal Canadian rate for profits earned by that branch, and is also subject to a ‘branch tax’ on net-after-tax income (subject to certain deductions).
Foreign corporations that establish a subsidiary corporation in Canada should be cognisant of Canada’s thin-capitalisation rules. Under these rules, interest paid on a loan from the parent company to the Canadian subsidiary is not deductible for tax purposes. As a result, it is generally advisable to ensure that any investment made by the foreign parent company in the Canadian subsidiary is small enough to ensure that the debt-to-equity ratio of the parents holdings in the subsidiary remain below the statutory threshold.
Some foreign investments in Canada involve larger projects that are not likely to turn a profit for a number of years. If losses may occur in the initial years of a project, consideration should be given to whether the investment in the project must be registered as a ‘tax shelter’. Under the ‘tax shelter rules’, losses cannot be deducted from and penalties are imposed on an unregistered investment where statements are made indicating that an investor may deduct losses from the investment in an amount exceeding the cost of the investment.
XI DISPUTE RESOLUTION
i Special jurisdiction
Other than as prescribed by the relevant project agreements in each instance, there are no specialised courts or tribunals that are designated for disputes arising from project finance transactions or construction contracts. However, certain provinces do have specialised courts for managing construction and builders’ lien proceedings. Each province has its own construction lien legislation, which prescribes the circumstances in which a supplier of services and materials to a construction project will be entitled to claim a secured interest in the project property and/or the holdback funds that are required to be retained. The strict procedures governing these rights are similarly set out by the applicable provincial legislation. The venue for lien proceedings will be the jurisdiction in which the project is located. Certain projects (e.g., projects owned by the federal Crown) are not subject to construction liens.
The appropriate forum for a dispute arising from a construction project is generally the province in which the project is located. However, where there is a dispute
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over the appropriate forum, the courts will consider a series of factors that have been prescribed by our common law. In addition, parties may seek to set both venue and applicable law for their dispute in their agreements, in which case the courts will prefer to show deference to the parties’ intentions where possible.
ii Arbitration and ADR
The use of ADR is quite common on Canadian construction projects and is generally mandated by agreement. Increasingly, project agreements will require parties to seek a resolution of their dispute through a mandated negotiation, followed by a non-binding dispute review board or referee process before entering into a binding dispute resolution proceeding.
Where agreements contain a mandatory arbitration provision, the courts will seek to enforce that provision and will even order a stay of concurrent litigation proceedings to give the mandatory dispute resolution provision effect. After formal litigation or arbitration proceedings are commenced, it is extremely common for complex construction and project finance disputes to be resolved through a mediation facilitated by an experienced construction law neutral. Such mediations are held on a without-prejudice basis such that information exchanged exclusively for the purpose of the mediation cannot be relied upon at the arbitration or litigation hearing.
There are numerous provincial and other organisations that hear disputes arising from complex construction projects. Examples include: the Institut de médiation d’arbitrage du Québec,6 Arbitration Place,7 the ADR Institute of Ontario Inc,8 the Alberta Arbitration and Mediation Society,9 and the British Columbia Arbitration and Mediation Institute.10 With the proliferation of alternative dispute resolution for these types of disputes, various other private companies are commonly used as well.
As of December 2013, Canada has ratified the ICSID Convention. In addition, although an arbitral award issued by a foreign or international tribunal may be rejected in limited circumstances, our courts will usually enforce such awards. As a result of Canada’s ratification in 1986 of the 1958 Convention on the Recognition and Enforcements of Foreign Arbitral Awards and its adoption of the UNCITRAL Model Law on International Commercial Arbitration, each province passed its own legislation to facilitate the enforcement of foreign awards. However, there are variations from province to province and those seeking to enforce arbitral awards ought to be aware of local rules and statutes that may have an impact, such as applicable limitation periods.
6 www.imaq.org.7 www.arbitrationplace.com.8 www.adrontario.ca.9 www.aams.ab.ca.10 www.bcami.com.
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XII OUTLOOK AND CONCLUSIONS
While a federal election is scheduled to proceed in 2015 and elections are imminent at other levels of government as well in some jurisdictions, it is nonetheless anticipated that significant infrastructure spending will continue, with a focus on the PPP project finance model in particular. In addition, there is already evidence that the much-anticipated extension of the PPP model to projects at the municipal level, particularly in the wastewater and transportation sectors, has commenced and will continue as a means of satisfying local infrastructure needs.
It is anticipated that this level of activity will also continue to create opportunities for international and local construction organisations and investors, who stand to benefit significantly from the strong Canadian economy, our stable government and an overall commitment to these projects.
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Appendix 1
ABOUT THE AUTHORS
IAN BENDELLDavis LLPIan Bendell is a foreign legal consultant at Davis LLP, working from the firm’s Toronto office. Ian is chair of the firm’s national project finance, infrastructure and P3 practice group. Ian has been ranked by Chambers Global for PPP and infrastructure (Canada) 2013 and identified by Who’s Who Legal as a 2013 leader in the field in Canada for public procurement. Chambers Global 2013 states that ‘Ian is regularly at the front of the team, and is described by market sources as ‘everything you could ask for in a PPP lawyer.’’ Clients enthuse: ‘He’s got the ability to think himself into our position – he knows our company very well, and makes the cooperation extremely efficient.’
Ian has extensive experience advising on international project financing transactions, particularly in public infrastructure. He specialises in advising public authorities, project companies, equity sponsors, banks and other financial institutions around the world on the procurement, financing and implementation of major infrastructure projects.
While with another firm, Ian successfully closed the first Canadian acute health-care PPP – the William Osler Health Centre – as the lead adviser to the hospital authority.
Since the William Osler project in 2004, Ian has acted for the successful proponents on a wide range of projects that have successfully closed in Canada and internationally, including some of the most high-profile infrastructure projects in the North American market. Examples include, in the transportation sector, William R Bennett Bridge Project in June 2005, the Kicking Horse Canyon Project in November 2005, the Golden Ears Bridge Project in March 2006, the Northeast Stoney Trail, Northwest Anthony Henday Drive and Northeast Anthony Henday Drive Projects in February 2007, July 2008 and May 2012, respectively and the Ottawa Light Rail Transit Project in February 2013 and, in the social infrastructure sector, Alberta Schools 1 and 2 in September 2008 and April 2010, and the Forensic Services and Coroner’s Complex Project in September 2010.
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Ian has regularly acted for the public sector on key infrastructure projects. In addition to William Osler, Ian acted for the Dutch government on the first Dutch high-speed rail link P3 which closed in December 2001, for the Ontario Power Authority on the proposed procurement of new nuclear power generation capacity in 2009 and for the Bermuda Hospitals Board on the award-winning King Edward VII Memorial Hospital Redevelopment P3 project (which closed in December 2010).
Ian has been on the roll of solicitors of England and Wales since 1987 and is a former partner of the major London law firm CMS Cameron McKenna and, in that capacity, developed extensive P3 expertise in the European market, most notable being his role as lead adviser to the public authority for the award-winning Dutch High Speed Rail Link Project (€4 billion).
ANDREW BURTONDavis LLPAndrew Burton is a partner in the Vancouver office. He is a member of the firm’s national infrastructure and project finance and corporate/commercial practice groups. Andrew’s P3/project finance experience includes leading the legal teams advising the successful proponent on a number of projects which have reached financial close. Andrew regularly advises shortlisted proponents, senior lenders and subcontractors in relation to P3/project finance transactions across Canada.
Andrew also has extensive experience in general corporate/commercial work including mergers and acquisitions, joint ventures, corporate finance transactions and drafting and negotiating a broad range of commercial agreements.
Before joining Davis LLP, Andrew practised as a corporate lawyer for a leading law firm in London, England. He is a law graduate of Cambridge University and completed a Master of Laws degree at the University of British Columbia. He is qualified to practise law in Ontario, British Columbia and England and Wales.
BRUCE DARLINGTONDavis LLPBruce Darlington is a partner with Davis LLP’s Toronto office. Bruce assists lenders and debtors in all aspects of commercial loan transactions including secured financing transactions, asset-based lending, real estate financing, insolvency, restructuring, debtor and creditor rights and supplier’s rights. Bruce represents financial institutions including chartered banks, asset-based lenders and subordinate or mezzanine lenders both at the time that financing is provided and when the repayment of the financing is in question. Bruce also represents other creditors, trustees in bankruptcy, receivers, trade suppliers, landlords and debtors in all aspects of insolvency law including bankruptcy, proposals, reorganisations, security enforcement, liquidations and restructuring under the Bankruptcy and Insolvency Act and Companies’ Creditors Arrangement Act.
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LANA FINNEYDavis LLPLana Finney is an accomplished environmental lawyer, litigator and Law Society of Upper Canada Certified Specialist in Environmental Law. She advises clients on environmental liabilities and deal structures, provides strategic solutions for dealing with contaminated sites and remediation, helps clients to navigate the permit and approvals process, and regularly litigates environmental issues before the Ontario courts and the Environmental Review Tribunal.
Clients benefit from Lana’s broad range of legal expertise and client-centred approach. She successfully defends clients charged with environmental and regulatory offences under federal and provincial legislation, appeals remediation orders, and regularly acts in environmental litigation claims by landlords, tenants and neighbouring property owners.
Lana’s environmental practice is complemented by her involvement in PPPs. She provides environmental and regulatory advice on project agreements, and related documentation, in a broad range of project and infrastructure PPP mandates.
In addition, Lana is responsible for due diligence, coordinating and reviewing environmental site assessments, advising clients on contaminated sites and remediation, including ‘record of site condition’ considerations, and advising on the environmental aspects of agreements of purchase and sale. She negotiates indemnities and related risk-allocation mechanisms, and advises clients on director and officer liabilities and insurance coverage for environmental matters.
DAVID FOULDSDavis LLPDavid was admitted to the Bar of Ontario in 1996. He is a leading practitioner in complex fraud matters and projects litigation, particularly in support of Davis’ nationally-recognised PPP practice. David is also a respected class action defence counsel with experience in the product recall, technology, and media sectors. His client list includes Grupo ACS, PCL Construction, Hitachi Ltd, NTT DoCoMo, Campbell’s Soup Company, Rogers Communications, and Time Warner. David is a member of the Advocates’ Society, the International Bar Association, and the Ontario Bar Association.
JAMES KELSALLDavis LLPJames Kelsall is an associate at Davis LLP in Toronto where he practises corporate/commercial law with an emphasis on PPPs, project finance and infrastructure. James has acted for equity providers, subcontractors and public authorities with respect to the procurement and implementation of large-scale infrastructure projects. He has assisted senior counsel with project document preparation and review, including finance document, project agreement, and drop-down contract drafting and commentary. Recently, James worked as part of the team that closed the award-winning Confederation Line project in Ottawa.
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HOWARD KRUPATDavis LLPHoward represents a broad range of clients including owners, lenders, general contractors, subcontractors, suppliers as well as architecture and engineering professionals. The claims side of his practice entails the negotiation, mediation, litigation, and arbitration of disputes relating to all facets of construction law including contract disputes, bidding and tendering, delay claims, professional negligence, bond claims, construction liens and trust claims. Howard has significant experience with the preparation of construction and the provision of strategic project advice. He has acted on a variety of projects, including transportation, energy, infrastructure, retail, commercial, residential, condominium, community centres, environmental remediation, retirement facilities and auto manufacturing.
Howard speaks and publishes on a wide range of topics and in a variety of publications and seminars. He is active in industry organisations and is currently serving on the Toronto Construction Association’s Allied Professions Committee and Chair of the Construction and Infrastructure Section of the Ontario Bar Association. Howard is recognised as a leading practitioner in the area of construction law in the 2012, 2013 and 2014 editions of Best Lawyers in Canada and in the 2013 edition of the Canadian Legal Lexpert Directory. He is also rated ‘AV Preeminent’, the highest peer review rating, by Martindale-Hubbell.
ELIZABETH MAYERDavis LLPElizabeth is a member of Davis LLP’s project finance, infrastructure and PPP, public affairs, and construction groups. She brings a depth of experience to PPP projects, having advised the province of British Columbia on two of the earliest PPP projects in Canada. Subsequently, she has acted for bidders, contractors and lenders on a wide range of projects. Elizabeth has considerable experience in tendering and other procurement matters, including advising both public and private sector clients on procurement strategy, drafting conditions of tender and requests for proposals, and the evaluation process. She has also advised on procurement disputes.
MITCHELL MOSTYNDavis LLPMitchell Mostyn is a Toronto-based partner at Davis LLP. Mitchell is a corporate/commercial lawyer in Davis’ project finance, infrastructure and PPPs practice group. He has over 10 years of P3 experience, working on a wide variety of P3 projects in Canada and internationally on behalf of equity sponsors, procuring authorities, major subcontractors and lenders. Mitchell has advised on and closed a number of the largest P3 projects in Canada, including in relation to highways, bridges, light rail transit, forensic services and coroner’s complexes, multi-site police facilities and subsurface pedestrian tunnels.
Mitchell was co-lead counsel to the Bermuda Hospitals Board on their hospital redevelopment project, and is co-leading the firm’s P3 legal team advising jurisdictions new to the P3 sector on a CNG Bus Terminal project and a multi-site school project.
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Mitchell acted as special counsel to an international consortium of lenders who were lending to the winning bidder on highway pathfinder P3 project in Norway and acted for the public authority on one of Canada’s first acute care hospital P3 projects.
Mitchell advises on the development of procurement processes and documentation. He also works with insurance advisors in the development of project insurance regimes and with the procuring authority’s technical advisers in the development of output specifications, design and construction protocols, operation and maintenance protocols and key performance indicator/failure point/deduction regimes. He also has experience working with Canada’s CCDC/CCA documentation, including in the context of design-build projects.
DAVIS LLP1 First Canadian Place, Suite 6000100 King Street WestToronto ON M5X 1E2CanadaTel: +1 416 365 3510Fax: +1 416 365 [email protected]@[email protected]@[email protected]@[email protected]@[email protected]