Use of FIDIC forms of contract affirms the highest ethical standards and effectively participates in the fight against corruption in the construction industry

Source: eKapija Thursday, 20.10.2022. 20:28
The use of FIDIC contracts is important for the construction services sector because it affirms the highest ethical standards that could be applied in the work of consulting engineers, like quality, skill, experience, innovation, integrity, sustainability and the best business practices, says the Association of Consulting Engineers in Serbia, or ACES.

The association explained that by using the FIDIC contract forms members effectively participate in the fight against corruption in the construction industry and contribute to the promotion of procedures which ensure transparency.

– The implementation of FIDIC conditions of contract is recommended by international financial institutions, development banks (The World Bank, EBRD), the leading international commercial banks and investments funds and other major investors, the Association states.

FIDIC contract forms are used more and more each day in Serbia. All construction companies that want to compete in the global market have to adjust their products and services to the conditions on the global market. Opening the market leads to stronger competition among construction companies.

– Large number of investments in the construction industry in Serbia comes from the EU funds and world financial institutions which is why they insist on the realization of projects by implementing FIDIC standardized conditions of contract. We found that in practice the most used FIDIC contracts are the Red Book and the Yellow Book, ACES added.

The center for alternative dispute resolution to start working soon

The association founded the Construction dispute resolution center, CDRC, which is expected to begin operations soon. According to them, there are several eminent and renowned international institutions that deal in dispute resolution through arbitration (among other methods) such as, among others, international arbitration centers in Paris, New York, Singapore, London and Vienna.

– However, none of these institutions is specifically specialized for resolving disputes in the construction sector, meaning that every case from this area has to share court resources with cases from other industries. That is the reason we founded the Center for dispute resolution for the construction sector (CDRC), which is based in Belgrade and should, in the beginning, cover the whole Balkans region and which is expected to finally go international in 2026, the association explained.

The center will work as a non-profit organization with the support of top-level ACES professionals whose extensive experience both in legal affairs and on some of the biggest construction sites in Europe makes it possibles to carry out assessments and pass a swift, cost competitive and, above all, fair and unbiased verdict with the goal to speed up the dispute resolution in the construction sector.

– Center`s goal is to provide effective, economical and skilled arbitration, mediation and adjudication services, as well as the expert analysis for disputes in the construction industry, ACES said.

Four modules of international FIDIC training

As the national FIDIC branch in Serbia, ACES provides training in cooperation with FIDIC headquarters in Geneva. FIDIC training programmes are specific because they are conducted by foreign experts with knowledge of the FIDIC contract application around the world, who are there to relay their experiences and examples and to answer all questions, doubts and dilemmas the attendees might have when drafting and implementing the contracts based on FIDIC models.

There are four international FIDIC training modules:

Module 1 – Practical use of FIDIC contracts
Module 2 – Claims and dispute resolution under FIDIC
Module 3 – Understanding DABs
Module 4 – FIDIC Contracts management and administration

– Local FIDIC training courses deal with the implementation of FIDIC contracts in Serbia and are conducted by local trainers. Having in mind that drafting and implementing each FIDIC contract has to be adjusted to local government legislation the project is carried out in, these trainings are pretty significant for successfully implementing FIDIC contracts in both Serbia and the region. If clients have bigger teams in their companies, ACES is able to organize the so called “in house” closed- type training courses in cooperation with the clients.

Also, ACES is keeping in touch with the representatives of state administration, development projects and international financial institutions so as to identify the activities that combined help increase competitiveness of the construction industry on the local as well as the global level.

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