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The Fédération Internationale des Ingénieurs-Conseils (FIDIC), in association with the International Tunnelling and Underground Space Association (ITA-AITES), launched the First Edition of the “Conditions of Contract for Underground Works” (Emerald Book) for tunnelling and underground works on 7 May 2019 at the World Tunnel Congress 2019 in Naples.

The Second Edition of the “Conditions of Contract for Plant and Design-Build, 2007” (Yellow Book 2017) was used as the basis for drafting the Emerald Book’s General Conditions of Contract. You can consult our previous blog post for detailed information on the Yellow Book 2017 and the second editions of the other Rainbow Suite books (https://www.globalarbitrationnews.com/fidic-rainbow-suite-second-editions-unveiled/). The Emerald Book aims to address the risks particular to subsurface construction projects, which are dependent on the ground’s geological, hydrogeological and geotechnical properties and intends to meet the developments in the rapidly growing underground market sector. The Emerald Book continues to maintain the FIDIC contracts’ fundamental principles regarding the allocation of risks and includes new concepts concerning the risks that are particular to underground works.
The Emerald Book specifically addresses the following key areas:

  • Balanced risk allocation
  • The disclosure of all available geological and geotechnical information and the inclusion of a contractual geotechnical baseline
  • Tailored “Unforeseeable Physical Conditions” clause
  • The implementation of a ground classification system and supporting particular conditions that properly reflect the effort of excavation and stabilisation
  • Time for completion being influenced by ground conditions
  • The provision of a flexible mechanism for remuneration according to ground conditions, foreseen and unforeseen.

The Emerald Book provides:

  • General Conditions
  • Guidance for the Preparation of Particular Conditions and Annexes: Example Forms of Securities
  • Guidance for the Preparation of Tender Documents and Annexes: Table of Contents of the Geotechnical Baseline Report, Example Forms of Schedule of Baselines, Completion Schedule, Schedule of Contractor’s Key Equipment
  • Forms of Letter of Tender, Letter of Acceptance, Contract Agreement and Dispute Adjudication/Avoidance Agreement.

The Emerald Book will be widely used due to the growing number of underground projects in various sectors including energy, transport and urban infrastructure. As the parties’ respective needs and interests may differ from project to project, for instance in regards to the allocation of risks for pricing and timing, the new FIDIC book will also provide valuable guidance for agreeing on a bespoke contract  tailored to the specific project.

Author

Ismail G. Esin is a partner in Baker McKenzie's Istanbul office. He is a member of the Istanbul Bar Association, the International Chamber of Commerce (ICC) Turkish National Committee, the German Arbitration Institute (DIS), the London Court of International Arbitration (LCIA) and the Istanbul Arbitration Centre (ISTAC) Advisory Committee.

Author

Dr. Urs Zenhäusern is a Partner in the Dispute Resolution team at Baker McKenzie in Zurich. He practices mainly in the areas international arbitration and litigation. He advises clients on antitrust law and sports law, as well as legal matters related to unfair competition and distribution, agency and licensing contracts. He is a frequent writer and speaker at seminars on litigation and arbitration law, as well as intellectual property law topics. He has also been appointed as lecturer at the University of Fribourg and the Swiss Federal Institute of Technology in Zurich, and for the MBA Post-Graduate Program at the University of St. Gallen. Dr. Urs Zenhäusern can be reached at Urs.Zenhaeusern@bakermckenzie.com and + 41 44 384 1243.

Author

Ali Selim Demirel is a senior associate at Esin Attorney Partnership, a member firm of Baker McKenzie, where he leads the arbitration practice group. He focuses his practice on arbitration, domestic and international mergers and acquisitions and energy and concessions. He is a member of the Istanbul Bar Association.

Author

Ceyda is an associate of the Tier 1 dispute resolution practice of Esin Attorney Partnership. Ceyda focuses on advising clients on managing risk and resolving complex disputes relating to M&A, shareholders' agreements, FIDIC form of contracts and EMI projects. She represents foreign and local clients before arbitral tribunals and before all levels of domestic courts, mainly in connection with the recognition and enforcement of arbitral awards. In addition to commercial dispute resolution, she regularly advises clients regarding corporate matters and particularly on complex M&A deals. She also advises on investment disputes and acts as tribunal secretary in arbitral proceedings.