At the online FIDIC Users´ Conference 2021 FIDIC has launched the 2nd edition of the Short Form of Contract, better known as the FIDIC Green Book.

The 2nd edition comes with a number of New Features and Changes

  • prolongation cost (PGC) mechanism [S-C 1.1.35] and prologation cost formula taking in account financial progress up to date,
  • tabulated summary of contractors´ entitlement for employer’s risks [S-C 11.1.3]
    • which does not mean a fundamental change in substance but in terms of contract design with similarities to NEC forms,
    • but surprising details, e.g. more cost claims than under the FIDIC Red Book 2017
  • the use of an insurance certificate to be signed by an insurer or broker,
    • showing evidence for
      • maintaining insurance &
      • payment of premiums
  • user-friendly flow charts [concerning the handling of claims and disputes, termination, etc.] and
  • 40 communication forms provided as guidance for practitioners (usuable based on a renewable one year licence
  • Engineer
  • Taking-Over Certificate
  • Defects Notification Period (DNP)
  • Performance Certificate

The following cardinal changes are noteworthy:

  • Duty to mitigate [S-C 13.3] impliedly extends to EOT claims.
  • EOT claims [S-C 6.4] now subject to critical path test due to wording “for the purposes of Sub-Clause 9.2”.
  • Arbitration no longer under UNCITRAL Arbitration Rules; instead in line with all other FIDIC books, reference to ICC Arbitration Rules

The 2nd Edition provides users with two distinct contractual routes to handle claims and variations. Both involve the Engineer who shall make a determination regarding the adjustment of the Contract Price and/or Time for Completion, if necessary.

The 2nd edition retains the dispute resolution options form the previous edition, meaning that there is a DAB and a subsequent review of DAB decisions in ICC arbitration. The DAB shall be appointed at early stage as either a standby DAB with or without permanent duties, except that the DAB has jurisdiction to decide on duties.

The new Green Book will be welcome als an alternative contract form for smaller projects, albeit it requires a bit more attention in terms of contract administration than in the past, due to the fact that an Engineer´s role has been introduced on whom the parties confer various powers and authorities.

Yet, it provides for a less sophisticated claims machinery than under the FIDIC Red, Yellow and Silver Book 2017.

Dr. Götz-Sebastian Hök graduated in Law from Göttingen University and is a German solictor registered at the Berlin Bar. He has extensive international project and commercial experience gained while living and working in Europe, the Middle East, Africa and Asia.