CONSTRUCTION BULLETIN 2019

In this issue: Subcontracts Writ Large; Is PPP feasible in the GCC?; Qatar Crisis and Force Majeure; Australian High Court Limits Grounds for Judicial Review of Adjudication Determinations; Conferences and events.

Subcontracts Writ Large

One of the effects of the Carillion collapse was to focus a light on contractual arrangements throughout the construction supply chain, and the impact on parties when things go wrong. Over the years, much has been done in the UK to try and protect subcontractors, such as the Construction Act’s prohibition on pay-when-paid clauses and introduction of statutory adjudication, and the current UK government’s consultation on retention payments. Yet recent events have taught us there is more to be done. It is fundamental to ensure that risk is appropriately allocated throughout the supply chain by putting in place effective and properly drafted subcontracts.

In this article I offer some guidance on how main contract requirements should be addressed when drafting and negotiating subcontracts.

Is PPP feasible in the GCC?

PPPs have been successfully implemented across a range of projects globally, such as hospitals, power facilities, roads and airports. That success, combined with the pressures of growing populations, a corresponding need for infrastructure and falling oil prices, make PPPs an attractive model for GCC government procurement.

What is PPP?

PPP (Public Private Partnerships) broadly describe contracts between the private sector and public sector for the purpose of developing public assets or providing public services. The private sector will commonly provide the capital investment for the project and then recovers this investment, expenses and profit under contracts spanning several years from revenues generated by the asset or service. In return, the private sector will bear most of the risk and management responsibility. The public sector may then take over running the asset or service itself, bearing only the on-going operating expenses.

Qatar Crisis and Force Majeure

We consider the force majeure provisions under the 1999 FIDIC Red and Yellow Book contracts (the FIDIC Contracts), along with some of the pitfalls contractors should consider when contemplating such claims.

Introduction

Force majeure has been a hot topic recently: last year, a diplomatic crisis between Qatar and its neighbouring Gulf States (the Qatar Restrictions) caused shockwaves throughout the region. Diplomatic ties were cut, with many of Qatar’s neighbours closing or restricting borders, ports and airspace to Qatari-linked travel and traffic.

Australian High Court Limits Grounds for Judicial Review of Adjudication Determinations

The High Court of Australia has ruled that adjudication determinations made under the NSW and SA Security Of Payment Acts are not subject to judicial review for any non-jurisdictional errors of law. The decision, which has wide-ranging consequences, limits the ability to challenge a determination to jurisdictional errors of law only.

In the recent decision of Probuild Constructions (Aust) Pty Ltd v Shade Systems Pty Ltd & Anor (Probuild) the High Court of Australia determined that the Supreme Court of New South Wales (NSW) did not have jurisdiction to make an order in the nature of certiorari to quash an adjudicator’s determination for a non-jurisdictional error of law, notwithstanding no specific wording to that effect in the Building and Construction Industry Security of Payment Act 1999 (NSW) (SOP Act) (Probuild Constructions (Aust) Pty Ltd v Shade Systems Pty Ltd & Anor [2018] HCA 4). (An order of certiorari quashes a decision of an administrative body.)

Conferences and events

Offshore Pipeline Technology Conference
Design Liability
Amsterdam
27 February 2018
Presenting: Michael Sergeant

Training Seminar on the new FIDIC Contracts 2017
Second Editions of the Red, Yellow and Silver Books
Istanbul & Ankara
27-28 February 2018
Presenting: Ben Mellors (in association with ICM Consulting)

Construction Quarterly Seminar
Interpretation of contracts and design liability
London, HFW Office
27- 28 February 2018
Presenting: Max WieliczkoKatherine Doran

HFW – Diales Seminar
Extensions of time
Melbourne
28 February 2018
Presenting: Nick LongleyAlex McKellar