Equitas Consulting

The FIDIC Golden Principles

On 5 December 2017 FIDIC (Fédération Internationale des Ingénieurs-Conseils) released its new suite of contracts at the FIDIC International Contract Users Conference in London. The new versions of the FIDIC Red Book, Yellow Book and Silver Book were issued constituting updates of the former 1999 editions. In the guidance section of the new FIDIC Rainbow suite FIDIC first time set out five Golden Principles, strongly recommending that the Employer, the Contractor and all drafters of the Special Provisions take all due regard of these principles.

The said five Golden Principles are;
GP1: The duties, rights, obligations, roles and responsibilities of all the contract participants must be generally as implied in the General Conditions, and appropriate to the requirements of the project.
GP2: The Particular Conditions must be drafted clearly and unambiguously.
GP3: The Particular Conditions must not change the balance of risk/reward allocation provided for in the General Conditions.
GP4: All time periods specified in the contract for contract participants to perform their obligations must be of reasonable duration.
GP5: Unless there is a conflict with the governing law of the contract, all formal disputes must be referred to a Dispute Avoidance/Adjudication Board (or a Dispute Adjudication Board, if applicable) for a provisionally binding decision as a condition precedent to arbitration.

In June 2019 a further step was taken by FIDIC at the FIDIC Asia Pacific Contract Users’ Conference where the first edition of Golden Principles was launched. The FIDIC Golden Principles (First Edition 2019) is a 12 page guide setting out reasons to the same five Golden Principles and guidance on how to modify the General Conditions in the Particular Conditions to comply with FIDIC standards.
It was also explained in the Golden Principles as to why FIDIC deemed necessary to publish a guidance, as it states “ FIDIC now experiences applications of “FIDIC contracts”, where significant changes to the General Conditions are made by means of replacing, changing or omitting part of the wording of the GCs through the Particular Conditions (PCs). The replacements and changes introduced have lately been found to be substantial and of such extent, that the final contract no longer represents the FIDIC principles, and thus are jeopardising the “FIDIC brand”, and misleading tenderers and the public.”

The FIDIC Contracts consist of two parts; the General Conditions of Contract (“GC”) and the Particular Conditions of Contract (“PC”). The FIDIC’s Contract concept has always been that the GCs are for use in a wide range of projects in different jurisdictions and the revisions should be addressed in the PCs in reference to the; particular requirements of the specific project, the site and the Employer’s requirements. It may also be necessary to introduce amendments to comply with the laws that apply to the project or to comply with the governing law of the contract. These may also be formulated within the PCs. As longs as the modifications are limited to those necessities provided above the Contractor is recognizable as a FIDIC Contract. Otherwise FIDIC suggests that that it would be misleading and inappropriate to refer to a contract using the FIDIC GCs that does not comply with the GPs as a “FIDIC Contract”.