3.1 THE ROLE OF THE ENGINEER PERHAPS THE MOST STRIKING DIFFERENCE BE...

Perhaps the most striking difference between the two Books in relation to

contract administration is that, under the Yellow Book, the Employer must

appoint an

Engineer , a non-party to the contract, to administer the contract.

Under the Silver Book, the Employer himself is, strictly speaking, the contract

administrator, although he may (and in practice often does) appoint a

Representative to act for him.

The role of the Engineer has a long history in common law countries

and the use of the Engineer as non-party contract administrator in the Yellow,

and Red Books is a feature of the common law roots of the FIDIC forms.

⁴

The

Engineer traditionally had a dual role: he was at once the agent of the Employer,

who retained him, and the impartial administrator.

⁵

The scope of his func-

tions extended beyond certifying payments and other entitlements to making

decisions about matters in contention between Employer and Contractor

prior to any reference to arbitration. An important quasi-judicial as well as

administrative role was therefore characteristic of the traditional Engineer.

3

Contractors understandably view this disparity in the treatment of claims dimly. FIDIC

has justified it by reference to the fact that the Contractor is nearly always in a better position

to identify a claim-event or circumstance, and therefore to notify it in good time. The bar-

ring sanction is an appropriate stick to encourage the early notification of claims, which can

then be properly investigated by the Employer.

It is noteworthy that in the Gold Book (2008) the absolute time bar found in the others is

dropped, and instead the Dispute Adjudication Board (which we look at in detail in Part III)

can, in a suitably justified case, override the 28-day bar and permit the claim to go forward.

4

The first FIDIC construction contract was the Red Book, the 1973 version of which

closely followed the 4th edition of the UK Institution of Civil Engineers (or ICE) form of

contract. An impartial Engineer exercising powers of adjudication as well as certifying

functions was a characteristic of this form of contract.

5

The 4th edition of the FIDIC Red Book, published in 1987, introduced an express

obligation on the Engineer to act impartially, with a similar requirement in the 3rd edition

of the Yellow Book, also published in 1987. The basis of this obligation was the Engineer ’ s

perceived professional duty to act impartially.

In the current FIDIC Yellow and Red Books, the Engineer is no longer

expressly required to act ‘impartially’, but he is required, in making ‘determi-

nations’ (see below) to make ‘

fair ’ ones ‘

in accordance with the Contract, taking

due regard of all relevant circumstances ’ (clause 3.5).

Thus while no longer expected to act impartially between Employer and

Contractor, he is still to be ‘fair’ in the decisions he makes concerning, for

example, a claim for an extension of time; and thus the duality of the tradi-

tional Engineer ’ s role is to some extent preserved.

Another important departure from the traditional role is that the Engineer

in the current FIDIC forms is no longer the pre-arbitration decision-maker

between the parties. Although the Engineer ’ s determinations in the Yellow

and Red Books take effect until revised by a Dispute Adjudication Board

(or DAB), it is from the decision of the DAB that a dissatisfied party refers a

dispute to the final decision of an arbitration tribunal and not directly from

the decision or determination of the Engineer.

The introduction of the DAB as an intermediate stage between Engineer ’ s

determination and arbitral award has an important practical effect both on

the scope and impact of the Engineer ’ s decisions and on the likelihood of

resolving a dispute before formal and final proceedings are resorted to (as we

shall see further in Part III).