FIDIC has a different category known as Rainbow suite for varied projects or
contracts. The suite includes Res book for building and engineering works, a
yellow book for design-build, a silver book for EPC contracts and the green book
for short projects which was released in 1999.
Almost post two decades, FIDIC committee has released the second edition of
three principal contracts that are Red, Yellow and Silver book. The amendments
in these contracts are the recent topics of construction industry. The
Construction Lawyers in Dubai have written this article to enlighten the readers
about a few notable changes in the FIDIC current edition. The rationale behind
the rigorous amendment in the rainbow suit is to meet the demands of the users
and the industry, considering the rapid change in the technology.
One can witness considerable revisions in the yellow, silver and red book. The
extensive nature of these contracts is due to detailed provisions regarding
contract administrations rather than just superficial change. One should
carefully read each clause of the concerned book considering the length of the
provision it may invite unnecessary misinterpretations.
Some of the notable changes in the FIDIC rules are outlined below:
A clear heading stating "Notice" and the subject for issuing such notice shall
be highlighted, whenever a party issues a notice, concerning the new amendment.
The intention behind this amendment is to reduce the disputes in relation to
notices issued by parties where parties argue about the recommendations in the
progress report is considered as notice of a claim.
In consonance with the predecessor of the rainbow suite to appoint Dispute
Adjudication Board (DAB). The functions DAB starts from the beginning of the
contract until the completion of the project. The Board is required to visit the
site throughout the term of the agreement to ensure smooth functioning of the
project. As the name suggests, DAB is appointed to resolve or avoid disputes
between the parties. Even though appointment DAB can prevent parties from
strenuous disputes, it is still considered as a costly affair to have DAB on
board. However, under the new amendment, appointing Dab is a preliminary
requirement for parties which earlier they were happy to disavow.
3. Duties of Engineers
A pivotal role was played by engineers in the old Rainbow suite, and the same
position has been maintained in the new suite with some additional
responsibilities. FIDIC update is almost 50% more of its predecessor with one
significant aim to achieve more structured and clear procedures to avoid
Coming back to the duties of the engineer, below are several new duties under
the new Yellow book:
The engineer will continue to act as an employer, and according to the new
amendment, Engineer is not required to permission from the employer prior to
making a determination;
There is a new role of Engineer's representative, who must be present at the
site throughout the project period;
Engineer under the term "Agreement" is obligated to encourage the terms of the
agreement. They may further, if required, provide consultation to parties in
Should the engineer fails to make a determination in the relevant period, the
matter will be referred to DAB;
Engineer is a neutral party and should not be biased.
A great emphasis can be witnessed from the wordings of the new contract on the
duties of engineers that is to prevent the claims from becoming disputes leading
towards harmony between the parties.
Another consequential feature of the rainbow suite is the authority given to DAB
to issue advance warnings or prior notice of a potential issue. This feature is
to with a view to amicably settle the matters between the parties and with a
hope that parties will work in harmony to resolve the dispute rather than
escalating it to something serious.
The gold book allows the parties to inform another party in advance regarding
any unforeseen circumstances which can have an unpropitious impact on the
5. Force Majeure Provisions
Gold Book manifests a collaborative and risk-sharing approach and bearing the
same approach in mind; the new yellow book includes a provision stating
"exceptional risks" or "risk allocation". The definition of exceptional risks is
similar to the definition of force majeure clause. However, it also sets out the
risks the contractor or the employer may have to bear in future. A detailed
description of such risks can be observed from the new amendment.
6. The procedure for filing claim
Interestingly, a new step has been taken by FIDIC to divide the claims procedure
from that of disputes. The intention of the FIDIC committee was to separate the
contractual processes of seeking a claim from the procedures regarding filing a
dispute. Through this, parties will be less ingrained towards their position and
will be more likely to resolve the dispute. However, we still have to see if the
concerned approach will practically fit in such conflict.
One more significant change can be seen in clause 20 where the claims procedure
is now applied to both the employer and the contractor. It is clear that now a
similar procedure will be followed for employer's claims, leading towards a
balanced approach and mutually-benefitted relationship. It is further implied
from Clause 20 that numerous additional obligation regarding contract
obligations have been imposed on the party filing a claim.
It is indeed very early to have conclusive remarks on the FIDIC update as the
position of new amendments are yet to be justified through a practical approach.
However, a significant emphasis on the dispute avoidance mechanism is perhaps
the most conspicuous change in the rainbow suite.
Introduction of friendly settlement procedure is clearly to safeguard the
interest of parties and offer them employer-friendly business relationship.