Construction Law International June 2010

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International Construction Projects Committee news

Read the editors' note for this issue.

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From ICP-Net

Read the updates from the ICP-Net.

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Updates from around the world

New developments in construction law across jurisdictions.

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Judging the 'vanishing trial' in the construction industry (FEATURE)
The Right Honourable Beverley McLachlin, PC

Construction disputes are renowned for their technical complexity. In turn, when such disputes come before the courts, the parties may need to expend a great deal of time and money in order to gain a result. In this article, the Chief Justice of Canada notes the continuing trend in Canada (replicated, to varying degrees, around the world) for parties to turn away from the courts in favour of dispute resolution methodologies appearing to offer greater speed and lesser cost. As the Chief Justice cautions, however, the 'vanishing trial' of court consideration of construction cases may lead to detrimental consequences, not only for the parties involved in a particular case but for the development of construction law as a whole.

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Tender contract developments give hope to the disgruntled: Part 1 (FEATURE)
Professor Anthony Lavers

Until recently, it was assumed that no legal recourse was available to tenderers who had been treated unfairly during a tender process. As is noted in this, the first of a two-part article (to be continued in our next edition), this traditional position has been challenged in a series of cases from Canada, the UK, Australia and New Zealand. The upshot is that parties may be contractually bound to conduct themselves in accordance with the tender call and other implied obligations.

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The minefield of back-to-back subcontracts - Part 2 (FEATURE)
Dr Jörn Zons

Back-to-back agreements, by which the 'main' (or 'head') contractor aims to pass its obligations and liabilities towards the employer through to its subcontractor(s) are common in both construction and engineering projects. The proper implementation of such a back-to-back scheme requires thorough consideration and contract drafting. In practice, however, back-to-back agreements are often carelessly drafted and heavily flawed. In this, the second part of an article commenced in our March 2010 edition, the author considers further critical issues to be addressed in the risk allocation and drafting of subcontracts, including interface risks, dispute resolution throughout the contractual chain and the impact of local contracting laws (with a particular focus upon the German law governing standard terms and conditions).

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Long-term performance monitoring in public private partnerships (FEATURE)
Dr Lic Herfried Wöss

Public private partnerships (PPPs) are a sophisticated form of complex international contracts where the focus is the payment for delivery of services rendered satisfactorily and the transfer of the performance and project-related risks from the government to the contractor. They fall under the concept of privately financed infrastructure projects and have only appeared recently. Such type of project is characterised by a further shift of risk to the contractor as compared to the traditional build-operate-transfer (BOT) projects and the inevitable need to increase private participation in the construction of infrastructure. An essential element of the successful performance of a PPP is professional contract and risk management, in particular, through the long-term performance monitoring of a PPP project. 

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Book reviews

Reviews of important construction law books.

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Keating Chambers column

When the call comes.

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