International Construction Deals and Dispute Resolution

Discuss the variation between your role of the Engineer as a realtor of the Company and the Engineer as independent of the Employer. Discuss also if the distinction is useful, and whether and where (and why) it might be abandoned or retained.

In addition, consider and list the procedures in the FIDIC Conditions (Red Booklet) (1999 ed. ) whereby the Engineer performs functions as:

  1. Agent of the Employer; and/or
  2. Independently of the Employer
The workplace in a job is no expert in the field of construction. The company is person who only recognizes business thus, he needs someone with expert knowledge in the field to help him execute his project efficiently. It is as of this juncture the engineer come's in to the scene who has the expert knowledge and helps the workplace implement his job. He is employed by the workplace and works for the employer in a variety of assignments. As Dr Donald Charrett list out a series of thirteen assignments that the engineer must play, we can easily see that the engineer's role comes into play much prior to the construction begins. Here it's the role that he performs after the service provider is appointed and the structure starts, we will have the multiplicity and discord in his role as an engineer.

The role which will be at concentrate in the essay, in broad conditions is his role as an agent of the workplace and as a choice maker. The essay will attempt to differentiate and discuss the assignments in which the Engineer works as an agent of the workplace and roles where he acts separately from the employer. We can do this by searching first concerning how the concept of today's Engineer as an agent of the company possessed developed and then discuss the various FIDIC condition define and differentiate the role of the engineer. In the next part the discussion will give attention to the freedom of the engineer and will define the jobs where the workplace acts as a realtor of the workplace and where he's in addition to the employer. I am going to package with the provision of FICID not as a separate part, rather will list and discuss it with the first area of the question.

At this time I think it is pertinent to first discuss who the engineer is corresponding to FIDIC. The definition associated with an engineer can be found in sub clause 1. 1. 2. 4 of red and yellow book:

"'Engineer' means the individual appointed by the Employer to do something as the Engineer for the purposes of the Agreement and named in the Appendix to Tender, or other person appointed from time to time by the Workplace and notified to the Contractor under Sub-Clause 3. 4. "

This doesn't describe what the engineer job or role is as it has been handled by FICID under different sub-clauses under clause three. In a nut shell the Engineer is a person whose role can be thought to the project director where he must implement different aspect of the contract.

In sub-clause 1. 1. 2. 6 of red and yellow book the engineer is explained to be an employer's personal. Sub-clause 1. 1. 2. 6 mentioned

"'Employer's personnel' means the technical engineers, the assistant referred to in sub-clause 3. 2 and all other staffs, labour and other employees of the engineer and of the employer; and every other staff notified to the builder, by the employer or the engineer, as the employer's staff. "

Looking at both classification clause it becomes clear that the engineer is one who is appointed by the company and is recognized as employer personnel. One thing that come out clear from the definition clause is usually that the Engineer is always an employee of the Workplace. The gives surge to the question, if the engineer can be indie at any circumstance though the agreement or leastwise be reasonable and impartial.

The Engineer has multiple role to experiment with that are related to the contract and some of his role as the Engineer starts much prior to the company is appointed. The Engineer was helped bring into the picture by the company much prior to the company is appointed. The Engineer is earned at the initiation stage as he is required to multiple works like assessing the design, advising on the contractor to the employer and sometime veterinary the projects viability to alternative party financer. With so many roles relating to the workplace, can the engineer be expected to be 3rd party.

Historically it depended on the term of a contract to choose if the engineer was in addition to the workplace or not. In Ranger v Great European Railway Co[1]the court by interpreting the deal found that the engineer was never unbiased and his decision were which means decision of the business. Whereas in in In re De Morgan, Snell & Co. and Rio De Janeiro Flour Milling Co. [2], the chief engineer and the resident engineer were found to be independent from the employer. The basis was that where the engineer possessed autocratic control over the task and had the power to issue final and binding decision, was regarded as independent from both contracting people. [3] The courts observed this power as a turmoil of interest hence, applied very tight standard to just how engineers performed his power and vitality. [4] This resulted in a change in the manner the Engineer was related to the company.

The way the Engineer was related to the workplace moved to a far more modern form of the partnership we see today, where in fact the Engineer usually stands as a realtor of the workplace. The authority, responsibility and obligation ware still produced from a contract which resulted in courts going for a stricter stance on the role of your engineer. The courts have always imposed stricter and higher standard on the working with the Engineer. In cases where the agreement engineer was the agent of the company, the get-togethers to the deal enter the contract proclaiming that the engineer must undertake quantity of obligations for the implementation of the project. Courts have largely kept that the engineer in case there is lack of any words to the in contrast in the agreement is likely to act fairly in case of his role as a choice manufacturer. Mc Farlan J in the case of Perini firm v Commonwealth of Australia[5] experienced stated that,

"during the performance of all duties under the deal the engineer will remain an employee of the government(Company). Even during the discharge of his duty as a conclusion maker he continues to be the staff of the federal government, but he is still expected to act reasonably and justly with skills towards both functions to the agreement. "

In the modern form, we see that the engineer became an agent of the company in his different roles under the deal, but he was still likely to act as an independent person should work, who must be good, impartial and honest towards both parties when acting in his role as a decision-maker under the original system. However the industry shifted from the self-employed form of the Engineer and the machine of impartial Engineer as a decision-maker was adopted. The idea of an impartial engineer was incorporated in the present day form of contractual provision for development deals (FIDIC).

3. 1 Fidic WITHIN THE Role OF ANY Engineer

The engineer under the old FIDIC red book was likely to react impartially. As was stated under sub-clause 2. 6

"(d) normally taking action which might affect the privileges and commitments of the Employer or the Company, he shall exercise such discretion impartially within the. "

The incorporation and requirement of the impartiality of the Engineer was due to realisation of the fact that there will be any doubt on the impartiality. The occurrence of the question is as a result of presence of conflict of interest as the Engineer is currently the agent of the employer. Then over the time frame it was realised that the expectation of impartiality cannot be also validated. So there is again an alteration occurred from the requirement of being impartial to being fair.

According to Ola ˜. Nisja the idea of fairness developed through case regulation in the common-law system as the engineer was likely to be a person with professional ethics and you will expect from him to be always a fair decision manufacturer. Ola ˜. Nisja also declares that the concept of a good decision maker had not been in common practice till the FIDIC form included it in their standard form of deal. Hence in the 1999 release of FIDIC red e book and yellow book the concept has been replaced with the concept of fairness with word "reasonably" under clause 3. 5 and the idea of impartiality wasdone away with. The reason being there will always be hesitation on the impartiality of the engineer and that may be easily removed from the deal by words that can negate the expectation of impartiality. The idea has been made noticeable by Lord Hoffmann in Balfour Beatty Civil Anatomist Ltd v Docklands Light Railway[6] where he has explained that, "the architect is the agent of the employer, so he's a specialist man but can barely be considered to be independent". He talks of the architect who is appointed in the role of this Engineer, where you can still expect a person to be fair if not impartial or impartial. Intellectually speaking the idea of being fair is inherent to the type of your decision maker that is expected in one common law system which is easier to expect the engineer to be reasonable than being impartial. Even when the deal doesn't impose any obligation in any way, the engineer continues to be expected to take action in a, genuine, fair and realistic manner when under taking the role of your decision-maker. The above mentioned observation originates from Balfour Beatty Civil Executive Ltd v Docklands Light Railway Ltd only where there is no appointed engineer for the job and the company itself through its employee took up the duty of decision manufacturer, he was still likely to be fair, genuine and reasonable[7]. Other than the implied responsibility of performing impartially there exists expressed work under the code of ethic to do something impartially also. Of the numerous issues that obstacle the impartiality of the engineer one which, the engineer has to decide regarding to his own work. In such position there cannot be an expectation for impartiality whatsoever. Of the numerous tasks that Dr Donald Charrett list the majority of them have been infused into new role associated with an engineer in the present day time where he is the agent of your employer.

As an agent, the duty of the engineer is to effectively implement the project which is encircled around the condition that he must work in the best interest of his workplace. But as a choice maker he calls for relief from his role as a realtor of the workplace and is expected to become a natural decision maker between the employer and agreement and "fairly' decide the dispute. The clear differentiation of the engineer's role may also be seen in standard form of contracts and specifically FIDIC. The role of any engineer is dealt in different sub-clause of clause three of both FIDIC red and yellow e book. Condition 3. 1 handles the work and authority of the engineer and condition 3. 1 (a) of both red and yellowish book status:

"Expect as in any other case explained in these condition
  1. Whenever undertaking duties or training authority, given in or implied by the deal, the engineer will be deemed to act for the employer;"

This helps it be quite clear that the employer is expected to act a realtor of the employer in relation to any of the act he's required to do under the agreement.

And condition 3. 5 of red and yellow book state package with the role of the engineer as a conclusion machine, where it states that

"If arrangement is not achieved, the Engineer shall make a good determination in accordance with the Agreement, taking due regard of all relevant circumstances. "

It is clear from the wording of the FIDIC form of standard agreement the engineer is in a position to represent the Company in all subject, however he also has the obligation to discharge his contract obligation as a decision maker in a fair manner. Hence, of the many functions, an engineer performs, it is here as a decision machine, the engineer is expected to be fair and evenhanded when he's deciding the dispute. So, everything we get in general is a person who is throughout the agreement phase a realtor but when required he has to act in the capability of any decision maker and be neutral and reasonable.

The sub-clause provides that he must act fairly and even if the clause in struck out, under common legislation contracts there is an implied condition that the engineer still has to act fairly. But the impartiality has been replaced with the idea of fairness, some author make it clear that the service provider should never expect that the engineer belongs to the employer but instead he should assume that the engineer serves individually and impartially regarding to his professional criteria. The concept of an engineer is not talked about in the civil legislations system hence, may People from france courts have been seen struck down any clause which provided capacity to the engineer to decide a dispute. The trouble here is that the role with an engineer and he works is a common law developed concept which has been best described by Mc Farlan J in Perini firm v Commonwealth of Australia[8]

". the substance of such a relationship where in fact the engineer acts in dual capacity is that the functions have voluntarily arranged so in the agreement. The functions have agreed that they will accept and bind themselves on matter that he's necessary to decide"

The engineer's responsibility to act fairly is an responsibility that is known to occur from the word of agreement. FIDIC condition is a typical form of agreement and when used for any task makes it a valid form of agreement and clause 3. 5 makes its officially binding clause of course, if the technicians don't act pretty then it becomes a breach of agreement. In a deal, it's the work of the gatherings to follow the deal and action in good trust towards the fulfilment of the agreement. Hence, the work is somehow on the employer to ensure that the engineer serves fairly to honour the clause of the deal when performing as a choice manufacturer as the Engineer is an employer personal in line with the definition.

The engineer is a person who may not be himself mixed up in dispute but definitely has curiosity about the dispute. One he is deciding upon a dispute that will there be due to a decision he needed earlier associated with a work and second, he is deciding something is going to affect both parties, and he is related to 1 of the gatherings. Then the agreement needs the Engineer never to only protect the employers interest, he will also be protecting his passions as his decision is related to one of is own work only. While the Engineer gets control the role of the engineer he's still utilized by the company and his salary being paid by the employer so, when the engineer is performing as a choice maker he is getting paid by the company limited to that role too. In view the impeding aspect of insufficient independence in the role associated with an Engineer that the FIDIC catalogs have two safe-guards when he is acting as a decision maker: to decide fairly and relating to the agreement. Then again, to market fairness the FIDIC e book also prohibits the Workplace from upgrading the engineer with anyone against whom the deal raises any affordable objection. [9]

HHJ Jackson point out the legal situation associated with an engineer in the perfect way in Scheldebouw BV v St Adam Homes (Grovernor Dock) Ltd [10]
  1. The conditions of the deal according to which the engineer must work determine the role and responsibility of your choice maker
  2. There cannot be an expectation that he decision manufacturer is in anyway indie from the company.
  3. But while acting as a conclusion maker your choice maker is likely to act in an independent, impartial, reasonable and honest manner. He should action using his professional skill to reach the right decision and really should not enjoy any favourism towards his workplace.

The previous point is of interest here where it suggests that he is expected to react in a way which is unbiased from the employer. It gives the notion that the decision maker is never really independent from his employer, but he's expected to shed that relationship while acting as a choice maker. This helps it be clear that a decision by the engineer can only just be challenged in cases where there is a doubt of impartiality or lack of fairness. Hence, it must be kept in mind that uncertainty on the independence of the Engineer can be forget about a floor for challenging your choice. However, the Engineer is likely to be reasonable and natural, so any opportunity or even the uncertainty of the presence of bias by the Engineer into the Employers Curiosity about the decisions and persistence of contractual disputes, provides the contractor with the ability and the avenue to appeal against your choice of the engineer.

After going right through the relevant provision of FIDIC, case regulations and works of different field expert we can say that in the modern system of engineering contract the idea of an independent company is not present any more. All the while the engineer is merely expected to take action independently but there is no actual personality that is in addition to the employer. As I've earlier mentioned the engineer is obviously paid an income by the employer, even when he is acting as a decision machine so there cannot any presumption of freedom. The FIDIC condition also moved on to the concept of a fair perseverance as impartiality can be in question and can not be always expected. For the reason that there would continually be uncertainty because the Engineer never puts a stop to being the agent of the Company or as the FICID says "Employers Personnel". Matching to Charles C MacDonald, the Engineer is one person who lacks the required requirement of freedom to make important decision, as he is appointed by the company. [11] Even Redfurn and Hunter in their publication agree that the engineer who is appointed by the workplace will lack the required self-reliance to make important decision. [12] Even as take stock all that has been mentioned till now all we can say in layman's vocabulary, the engineer is never impartial but it is his duty to act in an independent manner. [13]

By the end, we can conclude that there surely is no real differentiation between the role of the Engineer where he works as the agent of the company and a job which he takes up, that is 3rd party from the company. No provision in the FIDIC form of contract also differentiate between your role somewhat the provision make it clear that he remains as agent all the while till the deal is in place. You can find safeguards to ensure impartiality and fair decision making but nonetheless role like the main one of decision manufacturer should not be in anyhow related or willing to any get together. This brings about the lack of self-reliance in the decision-making process as the trust in the engineer being reasonable is also lost. This has in the modern times has only led to using the Engineer as a conclusion machine only a procedural need as his decision is merely a prerequisite to get a DAB decision or arbitration. Today's form has its advantages as it can help in resolving disputes quickly and is also serving its goal in the majority of the instances but also offers in its drawbacks. The engineer's fairness will always remain a matter of question and question. There is no requirement to completely overhaul today's system, there is just a need to lessen the drawbacks. As suggested by Ola ˜. Nisja, one engineer can be appointed as the agent of the employer for all your roles offered by the contract, except the one of decision machine and when a dispute occurs, a fresh engineer who is not area of the project be earned to select the matter

The concept of an unbiased Engineer in practice was lost way back when as we relocated to the present form. An Engineer independent of the Company is a misconception. However, even as we saw, even while an agent of the company the engineer has to act pretty while performing as a conclusion maker and presenting determinations. It will always be an issue to the role of engineer but he has to defeat this shortcoming has to show real professionalism and reliability.

[1] (1854) 5 HLC 72; 10 ER 824

[2] Hudson's Building Contracts (4th ed) Vol II 185

[3] Ibid, p 215

[4] ibid

[5] Perini Firm v Commonwealth of Australia [1969] 2 NSWLR 530.

[6] Balfour Beatty Civil Anatomist Ltd v Docklands Light Railway Ltd (1996) 78 BLR 42

[7] ibid

[8] Perini (n 5).

[9] Sub-clause 3. 4 FIDIC Red e book (1st ed) 1999 & FIDIC Yellow Reserve (1st ed) 1999

[10] Scheldebouw BV v St James Homes (Grovernor Dock) Ltd [2006] EWHC 89 (TCC)

[11] Charles C MacDonald, "Allocation of Risk in Major Infrastructure Projects-Why do we obtain it so Incorrect?" ([2001] ICLR 345),

[12] ibid

[13] Scheldebouw (n 10)

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