Knowledge Base

Construction projects and risk management: NEC 4 – the evolution of contracts

source: http://bit.ly/2vrgzIW

Construction projects and risk management: NEC 4 – the evolution of contracts

For 12 years now the NEC3 contract has played a key role in delivering high profile projects through its reliance upon the values of proactive project and risk management procedures and the use of plain English.

Following the widely anticipated release of NEC4, we outline the key changes to be aware of and the potential implications these may have on the construction sector.

The next generation of NEC contracts, referred to as the NEC4 suite, has been described as an evolution of the existing NEC3 form, based on user feedback, rather than a revolution.

As such the traditional NEC values that have led to the successful delivery of many projects remain largely unchanged, although there are some interesting changes and additions. Five of these are reviewed within this paper.

Authored by Manoj Bahl, MSc MEng CEng MICE MCIArb, Senior Director, FTI Consulting and reproduced with his permission.

Case Study – Establishing Cause and Effect

source: http://bit.ly/2eLrpHw

Case Study – Establishing Cause and Effect 

In Claims Class Case Studies, we present a case study of a real situation for the reader to study and decide on the correct contractual outcome. The author’s opinion of the solution is presented underneath.

case-study-cause-effect

The project consists of a 36-storey hotel tower and a 36-storey serviced apartment tower constructed over a 4-storey podium and a 4-level basement car park. The basement and podium ‘footprint’ covers approximately 80% of the site.

Prior to the issue of tenders, the Employer arranged with the local municipality, that an area of land owned by the municipality in front of the Site could be used for the Contractor’s site establishment and this information was included in the tender documents.

The general conditions of contract are the Conditions of Contract for Construction for Building and Engineering Works Designed by the Employer, First Edition 1999.

The Employer engaged a separate contractor to…

Download the full case study on Establishing Cause and Effect.

We also published another case study earlier on cause and effect which you can read here.

Adjudication Case

[Source: https://www.fenwickelliott.com/research-insight/adjudication-case-notes/eurocom-ltd-v-siemens-plc]

Eurocom Ltd v Siemens Plc

Case reference:
[2014] EWHC 3710 (TCC)
Friday, November 7, 2014
Key terms: 

Adjudication – Adjudicators – Appointments – Conflict of interest – Enforcement – Fraudulent misrepresentation – Implied terms – Jurisdiction – Summary judgments

In April 2011, Siemens PLC (“Siemens”), the contractor, engaged Eurocom Limited (“Eurocom”) to install communications systems at Charing Cross and Embankment underground stations. A dispute arose regarding delay to the start of the works, variations, prolongation and delay and disruption. In August 2012, Siemens terminated the Eurocom’s employment under the sub-contract.

First Adjudication

In August 2012, Eurocom commenced an adjudication and an adjudicator was appointed. In his September 2012 decision, the adjudicator decided Eurocom should pay a net sum of £35,283 to Siemens.

Second Adjudication

In November 2013, Eurocom’s representatives served a notice of adjudication on Siemens. To the question, “Are there any Adjudicators who would have a conflict of interest in this case?“, in the RICS’ “REQUEST FOR NOMINATION OF AN ADJUDICATOR” form, Eurocom’s representative listed a number of names of individuals and firms, including the name of the first adjudicator. Accordingly, the RICS appointed a second adjudicator which was not on the list.

RICS did not copy the adjudicator application form to Siemens until 7 January 2014, at which point Siemens asked Eurocom’s representatives for an explanation regarding the alleged conflicts of interest. Siemens’ two letters went unanswered.

During the adjudication, Eurocom and Siemens exchanged multiple submissions (referral, response, reply, rejoinder, surrejoinder), as well as additional submissions in correspondence and following questions the adjudicator asked. The time for the adjudicator’s decision was extended several times. In his decision dated 28 January 2014, the second adjudicator awarded Eurocom £1.6 million.

Enforcement Proceedings

In May 2014, Eurocom sought payment of the sums the second adjudicator had awarded. Siemens advised that it would resist enforcement proceedings and one of the issues would be the nomination process for the second adjudicator’s appointment. Eurocom commenced enforcement proceedings in July 2014.

At the hearing in September 2014, the issues before Mr Justice Ramsey were whether:

  1. the second adjudicator’s appointment was invalid because of the information provided by Eurocom’s representatives in the second adjudication to the RICS in making the application for the appointment of an adjudicator and/or because the RICS failed to raise conflicts of interest with Siemens in accordance with the procedure in their explanatory notes;
  2. the second adjudicator adjudicated again on the same or substantially the same matters as had been referred to and/or decided in the first adjudication;
  3. the procedure adopted by second adjudicator breached the rules of natural justice;
  4. there should be a stay of enforcement of any sums awarded by way of summary judgment.

Counsel for Siemens argued that:

  1. the Eurocom’s application form misrepresented to the RICS that a number of individuals had a conflict of interest;
  2. there was a clear misrepresentation in that a false statement was made deliberately and/or recklessly and a nomination based upon such a misrepresentation was invalid and a nullity so as to go to the foundation of the adjudicator’s jurisdiction;
  3. it was an implied term of the sub-contract that the party seeking a nomination should not subvert the integrity of the nomination process by knowingly or recklessly making false representations to the ANB or so as to improperly limit or fetter the ANB’s ability to choose an adjudicator.

Mr Justice Ramsey dismissed Eurocom’s summary judgment application, finding that there was a “strong prima facie” case that the referring party’s representative, made a fraudulent misrepresentation on RICS nomination of an adjudicator form. The effect is that this invalidated the second adjudicator’s appointment, which meant he lacked jurisdiction to reach a decision. In summary, the Judge held, with regard to the issue of:

1. whether there was fraudulent misrepresentation:

a.    the statement completed by Eurocom’s representatives in the RICS nomination form was a false statement;

b.    there was clearly no conflict of interest for the first adjudicator to be nominated in a subsequent adjudication;

c.    in such proceedings, based upon evidence in witness statements without the possibility of cross examination, it was not appropriate for the court to conclude that Eurocom’s representatives acted fraudulently in making that false statement;

d.    the evidence gives rise to a very strong prima facie case that Eurocom’s representative deliberately or recklessly answered the question in the RCIS nomination form so as to exclude adjudicators who he did not want to be appointed;

e.    it seemed more likely that the reason for including the first adjudicator’s name in RICS nomination form was because Eurocom did not want the first adjudicator to be appointed as a result of the unfavourable first decision;

f.    it was difficult for the court to understand how Eurocom’s representative, a non-practising barrister, could otherwise complete the RICS nomination form in that way.

2.    the materiality of the false statement:

a.    where a party makes a material fraudulent representation to an independent body which is exercising a discretion, the exercise of that discretion would be invalidated;

b.    it was not necessary to prove reliance by the RICS as the fraudulent misrepresentation voided the transaction altogether (Rous v Mitchell [1990] 1 WLR 469, Lazarus Estates Ltd v Beasley [1956] 1 QB 702 and Prest v Petrodel Resources Ltd);

c.    the pool of potential adjudicators had been “improperly limited”, which was sufficient causation between “the fraudulent misrepresentation and the process of appointment” to defeat an application for summary judgment.

3.    whether there was an implied term not to act with dishonesty:

a.    parties enter contracts on the basis that the other party will act honestly, following Akenhead J’s obiter comments in Makers UK Ltd v The Mayor and Burgesses of the London Borough of Camden [2008] EWHC 1836 (TCC),

b.    a party applying for a nomination should not act dishonestly and any party that did so would be in breach of an implied term to that effect;

c.    there was a breach of this implied term and there was a sufficient causal link between the fraudulent misrepresentation and the adjudicator appointment process; alternatively

d.    if a party’s failure to follow the correct adjudication process went “to the heart of the appointment”, the adjudicator would lack jurisdiction (IDE Contracting v RG Carter Cambridge Ltd [2004] EWHC 36 (TCC)).

4.    whether there was a breach of natural justice:

a.    the role of the RICS is limited to the proper exercise of its discretion to make a nomination; and

b.    the RICS is not a body that is required to consult with the other party or achieve a balance between the parties that may be required by procedural fairness and therefore, its failure to send the application form to Siemens did not invalidate the adjudicator’s nomination.

5.    whether the dispute referred to in the first and second adjudication were the same or substantially the same:

a.    there was significant overlap between the two adjudications and that the second adjudicator had made decisions on claims that had already been adjudicated on. He did not have jurisdiction to do that;

b.    the fact that the second adjudicator did not make any allowance for the claims in the first adjudication, it was not possible for the court to sever certain elements from the second decision;

6.    whether procedure contravened the rules of natural justice:

a.    the adjudicator had a discretion as to what further submissions and documents he allows during the adjudication, that time periods are short, in particular the need to work over Christmas/New Year;

b.    it was proper for the adjudicator to ask questions and sought submissions from the parties.

Commentary

Not only does this judgment provide some further guidance on enforcement proceedings and challenges, it also gives the whole business of adjudicator nomination a new dawn.

Referring parties can no longer have pre-emptive rejection list on the nomination form nor can they routinely identify names they do not want the ANB to appoint for reasons other than a conflict of interest. Further, simply identifying the name or names of individuals would not be sufficient. The Referring Party must state the reasons it believes the person named in conflicted.

As far as the RICS is concerned, following this judgment, it has amended its form “REQUEST FOR NOMINATION OF AN ADJUDICATOR BY RICS” to include the following passages:

at page 2:

“3.3    Conflict of interest

If in your view there are any adjudicators who would have a conflict of interest in this case, you should list them in this box.  Please also provide for each such person, brief but clear reasons for this statement. Your attention is drawn to the decision in Eurocom Limited v Siemens PLC [2014] EWHC 3710 (TCC) to the effect that misrepresentation in this statement could invalidate the appointments process in its entirety, rendering any decision/award made unenforceable.

RICS is by law not required to provide a copy of the application form to the non-applicant party and does not do so automatically. However, as a matter of good practice, RICS will provide a copy of the form to the non-applicant party on request.

Notwithstanding any such statements, the President of RICS always retains an unfettered discretion to appoint any adjudicator he/she regards as suitable”

at page 5:

“Conflict of Interest (Please refer to Section 3.3)

Please indicate below whether in your view there are there any adjudicators who would have a conflict of interest in this case.  Please provide for each such person brief but clear reasons for this statement.
Name     Firm     Reasons”

REMINDER: NOTICE TO PHD CANDIDATES

Dear Member,

We wish to remind you about our Notice dated 29th June, 2017 on the Educational Support for PHD Candidates.
Kindly note, that the closing date for submission of applications remains 31st July, 2017.

Thank You.

Signed

M. ABBA TOR, FNIQS, MNIMN, MBA
Secretary General

July 2017 – List of Inductees

JULY 2017 – LIST OF INDUCTEES (PDF)

THE NIGERIAN INSTITUTE OF QUANTITY SURVEYORS

JULY 2017 – LIST OF INDUCTEES

S/NO NAMES MEMBERSHIP NO
1 ADENIJI ABIODUN JULIUS 3814
2 IBRAHIM KAZIM 3815
3 ODETOYINBO ABIODUN OLA 3816
4 ODUNARO TAOFIK ABIDEMI 3817
5 ABDULLAHI MUAZU BASHIR 3818
6 ABDULLAHI MUSTAPHA MUHAMMED 3819
7 ABUBAKAR ABDULLAHI 3820
8 ABUBAKAR UMAR 3821
9 ADEBALOGUN ADEYINKA LENIN 3822
10 ADEBAYO OLUFEMI JOHNSON 3823
11 ADEBIMPE-OJO FOLASAYO OLUDIPE 3824
12 ADEGBITE ADESEGUN OLUFEMI 3825
13 ADEGOKE PETER TEMITOPE 3826
14 ADENIJI NATHANIEL TEMIDAYO 3827
15 ADEYELU FUNMILOLA MORENIKE 3828
16 ADEYEMO OLUWASEYI ADEOLA 3829
17 AJALA AYODELE TIMOTHY 3830
18 AJAYI OLAYINKA EZEKIEL 3831
19 AJETOMOBI ADEDOYIN VICTOR 3832
20 AKINKUNMI OLUTAYO GABRIEL 3833
21 AKINTOLA BUSAYO FUNMILOLA 3834
22 AKPOMIEMIE ANDREW OGHENEMENE 3835
23 ALAMU BOSEDE FLORENCE 3836
24 ALHASSAN MUSA BABA 3837
25 ALI GOMBE ISAH 3838
26 ALIYU FATAHU MATAZU 3839
27 ALUKO DAMILOLA OLUWATOYIN 3840
28 AMOS SAMUEL DAVOW 3841
29 AWODELE IMOLEAYO ABRAHAM 3842
30 AYINDE ABIODUN EMMANUEL 3843
31 AYODABO AZEEZ AYODELE 3844
32 BADMUS ALLIU OLANREWAJU 3845
33 BAKARE OLALEKAN RAHMAN 3846
34 BALAMI ADAMU ALI 3847
35 BAYEGUN OSUOLALE ADELANI 3848
36 BELLO AKEEM KOLAWOLE 3849
37 DOSUNMU OLUWAKEMI CHRISTANAH 3850
38 EZE DAVID SIMON 3851
39 FALAYE JOSEPH BORODE 3852
40 FYNEFACE SUNDAY SUNDAY 3853
41 GARBA AMINU 3854
42 GIDE ABDULWAHAB 3855
43 GREEN TIMOTHY TAMUNOIDUARI 3856
44 HABIBU MUKHTAR DARA 3857
45 HARUNA RAKIYA 3858
46 HASSAN BASHIR MOHAMMAD 3859
47 IBRAHIM ISAH LAPAI 3860
48 IBRAHIM MOHAMMED ADAMU 3861
49 IDRIS ALIYU HASSAN 3862
50 ILESANMI TOPE OJO 3863
51 ILIYA FRIDAY GOTOM 3864
52 INYANG SAVIOUR CHRISTOPHER 3865
53 ISA JIBRIN 3866
54 JOSEPH HOSEA 3867
55 KOGI TIMOTHY MARCUS 3868
56 LASISI AYISAT MODUPE 3869
57 MAKOZI BENARD AUGUSTINE 3870
58 MOHAMMED YAKUBU DANASABE 3871
59 MUHAMMAD NURA MUSA 3872
60 MUHAMMAD SALISU ISHAQ 3873
61 MUHAMMED USMAN 3874
62 MUSA NASIRU 3875
63 NDAYAKO HALIMA 3876
64 NKESI OSITA MARCELLUS 3877
65 NWACHUKWU HARRISON CHINONYE 3878
66 NWAEFIDO PATRICK NNAMDI 3879
67 NWOBU IFEANYICHUKWU CHUKWUNONSO 3880
68 NWUJU CHINEDU 3881
69 OBAGBAMI OLUDARE MONDAY 3882
70 OBATUROTI FRANCIS TEMITOPE 3883
71 OBEMBE ADEDOYIN FATIMO 3884
72 OBOKIA- ADEGBITE ELOHOR 3885
73 ODELADE ABIODUN AYODEJI 3886
74 ODUOBI GODSON CHIMAOBI 3887
75 OGBUAGU ALOYSIUS EBUBE 3888
76 OGUNMOLA ANUOLUWAPO PETER 3889
77 OGUNRINDE MOFOLUWASO AYOKUNNU 3890
78 OLALEYE FOLARIN 3891
79 OLAMIJU ADESUWA OLUWAFEYIKEMI 3892
80 OLATUNDE ADEOLA FABIYI 3893
81 OLAWUNI BETTY OLUWAFUNSO 3894
82 OLOFINBIYI OLANREWAJU AUSTIN 3895
83 OMILEYE FEYISAYO OMOLOLA 3896
84 OMILEYE WASIU ISHOLA 3897
85 OMOLE FOLUSO SEMIU 3898
86 ONI ABIODUN STEPHEN 3899
87 OPARINDE WILLIAM DAMILARE 3900
88 OTUTU ZIKALA JAMES 3901
89 PEPPLE EMMANUEL IBIEDINMA 3902
90 PIUS OSARETIN CATHERINE 3903
91 SALEH IBRAHIM MALLAM 3904
92 SALIHU UMAR 3905
93 SALLA CELINA BAKUT 3906
94 SHELERU FEMI IBRAHIM 3907
95 SOMUYIWA SAHEED ALANI 3908
96 TAFIDA ADAMU IBRAHIM 3909
97 THOMPSON KUBIA-SIFON UDEME 3910
98 TONYEBROWN TAMUNOTONYE AFOLABI 3911
99 UMAR RUFA’I ALIYU 3912
100 UWANGUE HENRY OSAYANDE 3913
101 WILLIE INIOBONG SOLOMON 3914
102 YEKINNI HABEEBLAH IBITOLA 3915
Note:
1 Please note that it is mandatory for inductees to attend the National Workshop coming up in July in Lagos.
2 Dress code for the occasion is either corporate or National attires.
3 Please ensure that you pay your Induction/Workshop fees as well as all other outstanding dues on or before 30/06/2017.
4 Guest card is available at N5, 000.00 only.
5 Chapters, Organisations and individuals may felicitate with the inductees by placing congratulatory/goodwill messages in the induction programme at the following rates.
a Full Page – N40,000.00
b Half page – N25, 000.00
Congratulations.

Signed.

M. ABBA TOR, FNIQS, MNIMN, MBA