IN TALKS WITH: PAOLO DI GIOVANNI & RICCARDO BICCIATO

The Big 5 Construct Egypt will host Paolo Di Giovanni and Riccardo Bicciato, Partners at BonelliErede, as the event's speakers this year. They will present a seminar session titled "Fist demand guarantees in construction: Interim proceedings and injunctions."

Here's what they told us ahead of the event:

What is the FIDIC framework contract?

The “FIDIC framework contract” is a standard form of contract published by the Federation Internationale des Ingenieurs-Conseil (French version of the International Federation of Consulting Engineers, also known as “FIDIC”). Over the years, FIDIC published and updated several standard forms for the construction and engineering industry. Among the FIDIC contract frameworks, the so-called “Rainbow Suite of Contracts” is frequently used in major construction projects worldwide. The Rainbow Suite of Contracts includes the Conditions of Contract for Construction (Red Book), the Conditions of Contract for EPC/Turnkey Projects (Silver Book) and the Conditions of Contract for Plant & Design Build (Yellow Book).

Why is it important for construction professionals to develop FIDIC framework contracts?

Both standardization and global usage are some of the main reasons why it is important for construction professional to develop FIDIC framework contracts.

Firstly, the complexity of major building and engineering projects makes desirable to base the contract upon a standardized form with which the parties and financial institutions are familiar. In the majority of cases, the adoption of FIDIC forms of contract will lessen the likelihood of unsatisfactory performance, increase costs and disputes.

Being FIDIC framework contracts known worldwide, employers may benefit from utilizing FIDIC conditions when potential bidders are from different countries. The contracting parties will react favorably to such a standardized form of contract, recognized as being fair and balance to both parties, especially with respect to allocation of risk and responsibilities.

What are the top rules to keep in mind when it comes to guarantees in construction contracts?

There is not a specific rule as this will depend on whether you are assessing the construction guarantee from a contractor or an employer perspective. Having said that, under a contractor perspective the key aspects to focus on are the conditions for the demand and the governing law. In particular, if you are a contractor you may want to ensure that the conditions for demand and the amount of the guarantee are as much as possible consistent with the relevant provisions of the contract, which however may have the effect of undermining the autonomous nature of the construction guarantee.

What will industry professionals learn by attending your presentation at The Big 5 Construct Egypt?

Our presentation will open with a quick overview on different types of construction guarantees in the context of FIDIC contracts, highlighting their main purposes and features. We will then focus on injunctions against payment of such guarantees, and the substantive and procedural aspects of the interim proceedings that may be commenced in countries that are foreign to that of the Employer. In this regard, a case study regarding certain very recent decisions issued in respect of performance bonds called on after the termination of contracts framed in accordance with FIDIC red and pink books provisions will demonstrate that, in some instances, contractual breaches may be fatal to a claim for payment under a first demand guarantee.

^{About Paolo Di Giovanni ​}

^{Paolo is a partner of BonelliErede and he is an expert of Litigation and International arbitration, with a focus on corporate law, commercial law, competition law and M&A. He is a member of Construction & Engineering Focus Team, International Arbitration Focus Team and Environmental Law Focus Team. His experience refers also to environmental damage liability, international corruption and international contracts with focus on underground railway systems, dams and man made canals and power plants as well.}

^{About Riccardo Bicciato}

^{Riccardo is a Partner of BonelliErede and he has been based in Cairo since 2016. He takes the lead in coordinating all matters and involving other BonelliErede offices such as our Egyptian partner, Bahaa-Eldin Law Office, and other law firms in African countries for cross-border matters as required. Riccardo is an expert in project and export finance, acquisition and corporate finance and project contracts. He is a member of the Africa Team, Construction & Engineering Focus Team, Energy & Infrastructure Focus Team and Banks Focus Team.}

Register to attend for free and get CPD-certification points at Paolo di Giovanni and Riccardo Bicciato's session by clicking HERE.