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INTERNATIONAL CONSTRUCTION BUSINESS FORUM IN BHUTAN

August 1, 2019

The Construction Association of Bhutan (CAB) and International Federation of Asian and Western Pacific Contractors’ Associations, organized a one-day International Forum entitled “Understanding FIDIC, Arbitration & Dispute Adjudication Process” at Terma Linca Resorts and SPA last August 1, 2019 in Thimphu, Bhutan. Mr. Thinlay Gyamtsho, the President of CAB, welcomed a hundred participants from Bhutan, Mongolia, and the Philippines from contractors, developers, lawyers, and government officials.   He extends his gratitude to Mr. Levy V. Espiritu, IFAWPCA Executive Director and IFAWPCA Secretariat for supporting CAB to make the forum event a reality. 

 

The event was a venue to bring together stakeholders of the construction industry, both private and government sectors to share relevant ideas, and best practices platform for important dialogues on existing and upcoming policies in the government, financial institutions, organizations both local and foreign that have a great impact in the industry. For the first session, the main speaker was Engr. Salvador P. Castro, a FIDIC Contracts International Accredited Trainer and also FIDIC Affiliate Member. Engr. Castro began the session by introducing to the participants what FIDIC is all about. He also introduced each of FIDIC Rainbow Suites with a range of colored books from red to gold that represents contract
books for different types.

 

He started with the first FIDIC Book, FIDIC Red book is which at the global level is the most commonly used standard form of contract for construction where design is carried out or on behalf of the employer. FIDIC Yellow Book provides conditions of contract for construction where the contractor designs and executes the works following the employer’s requirements with the provision for employees to design some elements of the works. He added that this book is applicable for building and engineering works and process plants where a higher degree of offsite manufacture of plant and equipment is foreseen. Engr. Castro also shared about FIDIC Silver Book that is suitable for use in process plants and private infrastructure projects where the Contractor takes on full responsibility for the design and execution of works, and where a greater level of certainty as to final price and final time for completion. He recommends not to use this book if the Employer intends to supervise closely or control the Contractor’s work or review most of the construction drawings. He mentioned that FIDIC Pink book is a harmonized Red Book Conditions of Contract for Construction for building and engineering works  designed by the Employer, he pointed out that the Multilateral Development banks commonly adopted the FIDIC General Conditions of Contract as part of the standard bidding documents that they have required their borrower or aid beneficiaries to follow. This book also includes sample forms for Contract Data (Particular Conditions), Securities, Bonds, Guarantees and Dispute Board agreements.


Engr Castro mentions that FIDIC Green Book is recommended for fairly simple or repetitive works or works with short duration without need for specialist sub-contracts. He also stated that this book continues to reflect the principles and allocation of risk between the parties as to the FIDIC Red and Yellow Book.  For FIDIC Gold Book, Engr. Castro defined that this book is for projects combining design, construction, and long-term operation and maintenance of a facility awarded to a single contractor or joint venture or consortium. This book specialized the feature of Auditing Body. The  FIDIC White book is an important part of FIDIC suit and is one of the most widely used forms of professional services contract internationally, FIDIC has also published the second edition of the Sub Consultancy Agreement to go with the new White Book, while the FIDIC Blue-Green Book is prepared in close collaboration with the International Association of Dredging Companies (IADC) which is recommended for dredging and reclamation work. He also introduced the latest FIDIC Emerald Book he recommended this book for underground works like tunneling and geotechnical uncertainties which were launched in June 2019 during FIDIC Asia-Pacific Contracts User’s Conference, in Hong Kong. The Book addresses the risk-related to subsurface physical conditions which are not possible to asses with sufficient precision in advance of the Contract, and therefore cannot be assigned entirely to the contractor.

For the last part of the first session, Engr. Castro also shared his knowledge regarding Resolution of Claims and Disputes. He explained that in case of issues or claims filed with the Engineer, consult each of the party to try and reach an agreement. He also deliberated about the Dispute Adjudication Board and Arbitration that the participants interact further to the topic. Mr. Christiaain Grosskopf was the main speaker of the afternoon session. He is an International Professional Engineer. He is also a Certified International Project Manager, a Member of Dispute Resolution Board Foundation, Associate of Association of Arbitrators, and a Learned Specialist in Dispute Avoidance and Adjudication Process. He shared his knowledge about Alternative Dispute Resolution Boards. He started by introducing the international scenario of a construction dispute. He also discussed the Alternative Dispute Resolution to the forum as settlement of disputes outside National Courts which a composed technique to assist to Reach consensus and Imposed Decision. He also explained that the international instruments define Dispute Board as a board set to be impartial from Employer, the Contractor or Engineer, and the members repeatedly visit the sites to give advice or decisions in order to settle contractual disputes preventing them from escalating into arbitration or litigation. He also added that the DB is independent in its function, have an adequate knowledge about the matter and the board is available to parties whenever issues arise.
 
International and from Bhutan participants would like to commend Mr. Thinlay Gyamtsho for bringing to Bhutan a first international forum in Bhutan. This event gives excellent feedback from the participants and looking forward to a more relevant event like this from IFAWPCA internationally.