• THE INTERNATIONAL COMMERCE & LAW REVIEW
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• v.46
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• pp.29-60
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• 2010

The incentive and reasons to publish FIDIC Conditions of Contract for Design, Build and Operate Projects(DBO Form) are manifold. It is partly a response to the increasing need for sophisticated project delivery methods in both the public and private sectors and the already widespread use of the FIDIC Yellow Book with operation and maintenance obligations and partly a response to the challenge to decrease maintenance cost to a minimum by means of a new procurement route. As a result, FIDIC has developed a new model form to meet this market place requirement. On the other hand, FIDIC did not simply adapt the Yellow Book but has developed a new form from it, whilst preserving the style of the already known FIDIC Forms and maintaining the wording where it was not necessary to change it for the purposes of a DBO Form. Moreover DBO Form fills up supposed gaps in other FIDIC Forms and ameliorates the claim management and dispute management framework. FIDIC DBO approach may be shortly summarized as follows. First, DBO Form provides for single project responsibility. Second, DBO Form has the clear objective of ensuring the use of a most reliable and efficient technology at the lowest life-cycle cost. Third, DBO Form is intended to operate as an effective quality increase in the design and construction of projects. Fourth, DBO Form is intended to provide significant benefits with regard to system integration and reduction of risks. Fifth, DBO Form accelerates and enhances completion schedule compliance. Sixth, DBO takes care of all three supporting pillars of sustainability(including economical, environmental and social elements). DBO Form is obviously a good starting point for negotiations and the preparation of calls for tenders, thus saving the parties time and money. However, existing cultural and legal differences, particular local conditions and the particular needs of some branches of the industry may require the form to be adapted according to the particular needs of a project. And Civil law practitioners are strongly recommended to verify carefully the underlying legal concepts and background of each clause of the General Conditions in order to avoid unnecessary and sometimes unnatural changes and amendments being made. Note that when preparing the Particular Conditions ensure that terminology is consistent and that existing inherent concepts should not be ignored.

• Proceedings of the Korean Institute Of Construction Engineering and Management
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• autumn
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• pp.287-291
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• 2002

A construction claim is generally caused by several causes, and in the case of developed countries, the most fundamental problem in most claims is a delay claim. Also, it is predicted that the trouble will increase by this one in a domestic case as well. Even though the construction claims occurred by the delay claim are the most frequent ill construction project, it is very difficult to analyze due to the complexity of occurring forms. Therefore, the rational judgement and the solving method need to be concerned through the accurate understanding the clauses accepted in a international contract execution and a domestic contrail when the claim occurred. The purpose of this study is to present problems and improving methods by comparing FIDIC with a domestic accounting regulation in order to expand a general condition into the international contract condition.

• THE INTERNATIONAL COMMERCE & LAW REVIEW
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• v.25
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• pp.3-40
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• 2005

Many Korean construction companies have been performing a variety of overseas construction projects since the 1970s. It is unfortunate that in many cases they have had to suffer big losses caused by errors and defects in the design and construction of the projects. In the author's opinion, however, there were losses that could have been avoided if they had understood better the feature and content of the particular construction contract. Few lawyers and scholars in Korea have been interested in the research and study of international construction contracts. This is mainly because they do not have access to practical sources outside of Korea for them to research and study since the contracts undertaken have been dealt with by law firms in other jurisdictions to which the disputes apply. This article is aiming primarily at the introduction of the issues which the practitioners are likely to confront in the process of reviewing and performing the international construction contract. In some cases solutions are sought about these issues based upon the FIDIC standard terms and conditions, the actual experience of practice, and UNIDROIT Principles, etc. It is reasonable to say that all the issues related to the international construction contract cannot be covered in a short article like this. The author wishes this article could induce subsequent studies on international construction contracts for further research. It has to be noted that from time to time Korean construction practices have been compared to the international ones for better understanding. This article mostly includes cases where the Korean construction companies go overseas for their projects, while there are some cases where foreign developers and financial investors participated in domestic projects in which international construction contracts forms were adopted. A few precedent domestic writings about international construction contracts seems to lack emphasis on the points that there are several standard construction contract forms and that they are different. The differences are mainly in accordance with who bears the design responsibility, how the owner has to make progress payments to the contractor and who the funding source for the project is. This article tries to make it clear that there are significant differences between the standard contract forms, e.g. a simple construction form, a design-build form and an EPC/turnkey form of contract. Again, the author hopes that this article can arouse the interest in the international construction contracts from both academic and practical fields, so that many subsequent advanced articles can help our construction industry become much more competitive in the world through awareness of the methods of procurement and administration of the contracts.

• International conference on construction engineering and project management
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• 2015.10a
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• pp.629-630
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• 2015

'Sabine Pass Liquefaction Project (SPL Project)', a case study in this report, is the first construction project of a U.S. liquefaction facility for shale gas export overseas. This study analyzes the SPL Project to give understanding and a guideline to Korean EPC companies by benchmarking about effective risk-sharing strategies on EPC contracts. This study consists of three parts. The first summarizes the liquefaction process adopted on the SPL Project, named the 'ConocoPhillips Optimized Cascade Process', and compares it with other competitive liquefaction processes. The second introduces the unique features of the SPL EPC contract by comparing it with two other EPC forms of contracts: a FIDIC Silver Book for onshore plant projects and a contract of an offshore oil production (FPSO) project. The third focuses on the complexity of project financing (PF), especially lenders control and impact on the EPC contract such as covenant provisions to constrain variations and changes on the EPC Contract. From these conclusions, it is anticipated that this case study can provide a guideline for successful performance of Korean EPC contractors overseas.

• THE INTERNATIONAL COMMERCE & LAW REVIEW
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• v.47
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• pp.129-156
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• 2010

Since the 1970s, international construction employers have commonly requested first demand guarantees upon their contractors as a form of security for due performance of their works. Contractors prefer the greater protection offered by more traditional forms of security requiring presentation of an arbitral award or other evidence of the caller's entitlement to compensation. Many contractors nonetheless feel that they have no alternative but to provide these unconditional guarantees in order to compete. However, these unconditional first demand guarantees are controversial and have given rise to numerous disputes both in arbitration and litigation. Disputes arising from first demand guarantees can be broken down into a) applications to prevent a perceived fraudulent or otherwise unfair or improper calling of a guarantee, b) claims arising from such abusive calls and c) claims relating to the consequences of such calls even if the call itself may not be abusive as such. The contractors should carefully assess the risk of an abusive call being made bearing in mind the difficulties he may face in seeking to prevent such a call. He should also bear in mind the difficulties, delays and cost he is likely to encounter in seeking to recover any monies wrongfully called. One option would be to provide that the call can only be made once and to the extent that the employer's damages have been assessed or even incurred or even for the default to have been established by an arbitral tribunal or court. Another option would be to provide that any call be accompanied by a decision of a competent and impartial third party stating that the contractor is in breach. For example, such a requirement could be incorporated into a construction contract based on the FIDIC Conditions by submitting this decision to a Dispute Adjudication Board. Another option would be to provide for the "ICC Counter-Guarantee Scheme". In sum, there would appear to be room for compromise between the employer and the contractor in respect of first demand guarantees by conditioning the entitlement to call such guarantees to the determination of a competent and impartial third party.