Ain Shams Engineering Journal 14 (2023) 101963

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Ain Shams Engineering Journal

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The Effect of FIDIC red book 2017 to avoid disputes

in Egyptian construction field
D. Mohamed Abdel-Hamid, Abdel-Rahman Alaa El-Din Mostafa ⇑
Civil Engineering Department, Faculty of Engineering at Shobra, Benha University, Benha, Egypt

a r t i c l e i n f o a b s t r a c t

Article history: Objectives: Egypt incurred about 74 billion of Egyptian pounds in the last decade due to arbitration cases.
Received 25 November 2021 This paper aims to find a solution for the Egyptian construction industry to avoid disputes among project
Revised 1 September 2022 parties, which convert the project from win-win situation to lose-lose situation and the project may not
Accepted 3 September 2022
be completed.
Available online 16 September 2022
Methods/Analysis: This study uses the new approach of contracts administration of avoiding disputes
from its inception represented in FIDIC 2017 and the approach of disputes settlement represented in
Keywords:
FIDIC 1999 instead of the used ad-hoc construction contracts in Egypt.
Contracts Management
Disputes
After analyzing the Egyptian construction field, it is found that each of badly written contract and poor
FIDIC 2017 contract administration are the main reasons for most of disputes among project parties.
as a try to solve this issue, a case study been applied to use the standard contract of FIDIC 2017 to be the
project’s contract instead of used regular ad-hoc contracts in Egyptian construction field, results con-
firmed that the new approach of disputes avoidance is in the line of the nature of Egyptian construction
projects, in addition to FIDIC 2017 mentions more detailed conditions and scenarios which avoid almost
all project disputes and deliver the project to the completion date with win–win situation for all project
parties.
Novelty/Improvement: the application of standard contract of FIDIC 2017 as the project contract in
Egypt shall be a solution for the badly written contract and facilitate the contract administration for
all project stages which shall be a great step to improve the Egyptian construction field and save billions
of Egyptian pounds in arbitration courts.
Ó 2022 THE AUTHORS. Published by Elsevier BV on behalf of Faculty of Engineering, Ain Shams Uni-
versity. This is an open access article under the CC BY license (http://creativecommons.org/licenses/by/4.0/).

1. Introduction The main reasons of disputes represented in poor drafting of

contracts, poor documentation during contract administration
Disputes have long been endemic to the construction industry [3], misunderstanding of dispute resolution management and
[1], but in Egypt the Disputes reached to the peak as pursuant to weakness of defense cadres in arbitration procedures [4].
the announced reports from the International Academy for Media- Often when disputes are arisen among project parties and not
tion and Arbitration (IAMA), Egypt incurred more than 74 billion of settled in early stages from its inception, such disputes may lead
Egyptian pounds in the last decade due to the arbitration cases [2]. to contract termination [5], the works shall not be completed,
Fig. 1. the project turns from win-win situation to lose-lose situation
and the disputes shall be settled in arbitration courts which its cost
either locally or internationally arbitration is relatively higher than
the costs of litigation [6].
⇑ Corresponding author. Therefore, the idea of this study is It is to find a solution to avoid
E-mail address: abdelrahman.alaa@kharafinational.com.eg (A.-R. Alaa El-Din the main reasons of disputes, by using standard form of contract to
Mostafa). avoid each of poor drafting of contract and to make it easy to
Peer review under responsibility of Ain Shams University. administrate the contract during execution phase by using the
guide attached with the standard form.
FIDIC standard forms have main advantages represented in the
balanced risk share among project parties which met appreciations
Production and hosting by Elsevier from all members at construction field in Egypt and world [7]. In

https://doi.org/10.1016/j.asej.2022.101963
2090-4479/Ó 2022 THE AUTHORS. Published by Elsevier BV on behalf of Faculty of Engineering, Ain Shams University.
This is an open access article under the CC BY license (http://creativecommons.org/licenses/by/4.0/).
D. Mohamed Abdel-Hamid and A.-R. Alaa El-Din Mostafa Ain Shams Engineering Journal 14 (2023) 101963

Fig. 1. The yearly average disputes value in USD millions for Middle East Area [11].

addition to the introduction of the amicable settlement as a pre- Oad et al. Investigation of Innovation during Bid Evaluation Process
requisite for the parties to apply for arbitration [8]. in the Road Construction Industry” which recommended to avoid
After using FIDIC 1999 in Egypt, many project disputes had been the selection of bad contractor from the beginning of the project,
settled in early stages due to the early determination of the Engi- as the suitable contractor surges likelihoods of successful achieve-
neer and Disputes Adjudication Board (DAB), Number of cases in ment of a road construction project. This may also achieve the
arbitration courts had reduced, but after the rapid development employer goals, and retain the project time for completion, within
of Egyptian construction field the number of arbitration cases the budget and achieve required quality of the project with no dis-
started to rise again, due to the Engineers weakness to adminis- putes [12].
trate the contract and the inability of FIDIC standard forms to keep Furthermore, some of studies referred that risk factors affect
pace with such rapid development. disputes in construction projects and cause poor quality of work,
On December 5, 2017 FIDIC issued new suite of contracts ‘‘FIDIC such as the study of ‘‘The Effect of Risk Allocation on Minimizing
2017”, which adopted the new approach of Contracts Management Disputes in Construction Projects in Egypt by Reem Y. Ahmed &
of avoiding disputes instead of the old approach of disputes settle- Ayman H. Nassar” [13], and the study of ‘‘Risk Identification and
ment, in addition to many seminars of International Chamber of Assessment of Mega Industrial Projects in Egypt by Mona A. Hassa-
Commerce ‘‘ICC” [9] and Cairo Regional Center for International nen; Ahmed M. Abdelalim” [14] which recommended to distribute
Commercial Arbitration ‘‘CRCICA” focused on such new approach risks in mega industrial projects between project parties to be mit-
to keep pace of the development of Construction Industry and igated through appropriate adjustments to contract clauses for
avoid disputes between project parties. [10]. quality control, design review and procurement stages to mitigate
Therefore, Egyptian construction field is curious to use FIDIC disputes between project parties.
2017 to reduce number of arbitration cases, but there are some Other studies and researches such as, ‘‘Risk identification
reasons which restrict using FIDIC 2017 represented in the lack framework in construction of Egyptian mega housing projects by
of published articles and technical papers which construe FIDIC Mohamed Nabawy, George Ofori, Maged Morcos, Charles Egbu”
2017 Contracts. [15], concluded that to achieve successful projects, there are some
This paper aims to know how FIDIC 2017 shall help Egyptian risks and challenges need to be avoided divided to four categories
construction field to save billions of Pounds paid in arbitration which represented in project management risks, safety risks, eco-
courts? also aims to know to what extent FIDIC 2017 is useful than nomic risks and government support risks; whereas, the project
FIDIC 1999 for Egyptian construction field? And finally making a management risks are represented in the unqualified staff which
recommendation if FIDIC 2017 is more suitable for Egyptian con- need more trainings, the lack of project resources, delay of designs,
struction field than FIDIC 1999? or keep using FIDIC 1999 till find- delays to handing over the site of works and delay of required
ing another suitable solution or standard contracts? approvals. In addition to the safety risks are represented in the
injuries during construction phase and the poor safety precautions.
Moreover, the economic risks are represented in the increase of
2. Literature review material costs, and poor estimation of project budget, issues in
employer’s payments. Also, the government support risks are rep-
Most of previous studies were interested only in calculating the resented in delays in issuance project required permits and
amount of incurred damages by project parties from disputes, and approvals.
how to settle the arisen disputes with less damages based on the Other studies were interested to study the success factors of
old approach of contracts administration, without finding a Egyptian construction projects, such as the study of ‘‘Success Fac-
methodology to avoid the arisen disputes from its inception, and tors of Highway Construction Projects in Egypt: AHP Approach by
that interpretates the huge number of arbitration cases in Egypt Ahmed E. Abu El-Maaty, S. El-Hamrawy & Ahmed Y. Akal” [16],
and Middle East as, Pursuant to the Global Construction Dispute as this study after the application of Analytical Hierarchy Process
Report 2020 [11], the average disputes value of Middle East pro- ‘‘AHP” concluded that there are five factors of success represented
jects increased from $57 million in the year of 2018 to be $62 mil- in the implementation of effective quality control and assurance
lion in 2019. systems, the importance of feasibility studies to be implemented
Recently, a few studies recommended to avoid disputes by con- in sufficient time, the accuracy of designs with no errors which
tracting with a suitable contractor for the project, such as ‘‘P. K. shall determine desired scope of work in clear way, taking the suf-
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D. Mohamed Abdel-Hamid and A.-R. Alaa El-Din Mostafa Ain Shams Engineering Journal 14 (2023) 101963

ficient time for tender preparation, and applying an effective cost tions. Rather than such research gave recommendations to
control system for project budget updates, therefore the aforemen- employers to determine a realistic duration for the execution of
tioned key factors shall lead to a successful implementation of all the project, in addition to prepare sufficient feasibility studies for
highway construction projects in Egypt. Also, based on such find- the project, as well as the readiness of the project cash flow and
ings, the study highlighted that the phase of pre-project technical financing to pay all contractor’s dues at its due dates, rather than
studies is a very important phase for enhancing the performance obtaining all required approvals and permits for the project from
of all highway construction projects in Egypt. the relevant authorities, and to select expert consultant and con-
Furthermore, many reasons were mentioned by some studies tractor to the project with good reputation. Also, this research gave
such as ‘‘Exploring delay causes of road construction projects in vital recommendations to contactors represented in periodical
Egypt by Remon F. Aziz & Asmaa A. Abdel-Hakam” [17] that reporting of critical and long lead items and to submit narrative
employer’s financial problems shall issue major disputes and explanations of causes of any expected delays for the project,
increase financial burdens on contractor, the contractor is required rather than the contracting with experienced subcontractors with
to make all equipment available at site to avoid any disputes due to good reputation and to develop good system for site management
less productivity, in addition to experienced contractor is required and supervision by adapting effective planning and scheduling for
to achieve works with required quality, the importance to avoid the project.
design errors made by designers due to unfamiliarity with local Other studies such as ‘‘Causes of Delay in Building Construction
conditions and environment, the importance of soil investigation Projects in Egypt by M. E. Abd El-Razek, H. A. Bassioni & A. M.
to be accurate of is the first step in decision of the design of road Mobarak” [20] mentioned that disputes among project parties are
with traffic capacity, loads on road, number of layers of pavement arisen due to various reasons such as financing by contractor during
and all project. In addition to the avoidance of poor subcontractor construction; employer’s delays to pay contractor’s payment;
performance delays as choosing experienced subcontractors with changes of design by employer during construction; partial pay-
good reputation is necessary, and the poor site management and ments during construction; and no utilization of professional con-
supervision by contractor need to be avoided as the contractor is struction and contractual management as a try to minimize
advised to employ experts in management or improving the abili- project major disputes and keep the project successful till the com-
ties of existing engineers by training courses to meet project crite- pletion date.
ria with the required time and budget. Therefore, most of previous studies are interested only in deter-
Other studies were interested in reducing the number of dis- mine the project risks and calculating the value of such risks which
putes of Construction claims by the effective management of affecting the project with no definite approach of contracts man-
claims, such as ‘‘Reducing Construction Disputes through Effective agement with standard conditions to be followed during drafting
Claims Management by Hossam H. Mohamed, Ahmed H. Ibrahim & contracts to avoid most of project disputes, therefore this study
Asmaa A. Soliman” [18] Construction claims have high impacts on shall give more solutions for the Egyptian construction field to
construction projects on cost and time; therefore, employers and remove the apprehensions of trying use the new approach of
contractors should establish effective claims management in their avoiding disputes represented in FIDIC 2017 which shall mitigate
respective organizations to reduce risks of construction disputes. the number of arbitration cases in arbitration courts and avoid dis-
Identification of disputable claims factors which affecting con- putes from its inception to save millions of Egyptian pounds for
struction disputes shall avoid and reduce construction disputes. each project parties.
Most of disputable claim’s factors are eight factors represented Moreover, this paper uses a case study for an Egyptian Mega
delay of interim payments by employer, extension of time, qualifi- Project with major disputes uses ad-hoc contract and replace
cations of teamwork, poorly written contracts, issued variation such ad-hoc contract with FIDIC 2017 to know the advantages
orders by employer, late supply of materials and equipment, and disadvantages of FIDIC 2017 at Egyptian construction field
incomplete drawings and specification, and poor cooperation and to complete the project with no major disputes between the
communication among project team. Also, a system was presented parties.
which can help avoiding disputable claims by studying the main
causes of each factor from the eight disputable claims factors in
three stages of the project which are before construction, during 3. Methodology
construction and after construction. It is recommended to avoid
the disputable claims employers need to effectively shall deter- This study uses the new approach of contracts administration of
mine their needs and requirements before designs and specifica- avoiding disputes from its inception represented in FIDIC 2017 and
tions are conducted, consultants should pay attention to their the approach of disputes settlement represented in FIDIC 1999
designs and provide high quality designs with no errors and con- instead of the used ad-hoc construction contracts in Egypt.
tradictions. Delay of interim payment by employer is considered After analyzing the Egyptian construction field, it is found that
as the most disputable claims, consultants need to accelerate the each of badly written contract and poor contract administration
review and approval cycle of shop drawings. each project party are the main reasons for most of disputes among project parties.
shall understand and apply the contractual notice provisions and As a try to solve this issue, a case study been applied to use the
every project party shall recognize that the risk sharing philosophy standard contract of FIDIC 2017 to be the project’s contract instead
shall give the lowest overall project cost for employer and maxi- of used regular ad-hoc contracts in Egyptian construction field,
mum profit to contractor. results confirmed that the new approach of disputes avoidance is
Some of previous researches made recommendations for each in the line of the nature of Egyptian construction projects, in addi-
of employers, contractors and consultants, such as ‘‘Analyzing tion to FIDIC 2017 mentions more detailed conditions and scenarios
delay causes in Egyptian construction projects by Mohamed M. which avoid almost all project disputes and deliver the project to
Marzouk & Tarek I. El-Rasas” [19], which recommended consul- the completion date with win–win situation for all project parties.
tants to avoid delays to response to contractor’s queries and not The most common disputes in 2019 are related to the following
to delay the approval of any submittals and shop drawings, in addi- reasons as showed in Table 1: [11].
tion to establish an effective control system to proceed with any
issued variation orders by employers and to make sure that tender  The first ranked reason is for the poor draft, incomplete and
documents are completed, clear and free of any errors or contradic- unsubstantiated claims.

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D. Mohamed Abdel-Hamid and A.-R. Alaa El-Din Mostafa Ain Shams Engineering Journal 14 (2023) 101963

Table 1 a notice within 28 days after the contractor become aware or

The rank of most common dispute cases in Middle East Area for years 2018 & should become aware of the event or circumstances, otherwise
2019 [11].
the Contract completion date shall not be extended, and the Con-
2019 MOST COMMON DISPUTES CAUSES 2018 RANK tractor shall not be entitled to additional payment.
RANK And such matter gives the Employer the absolute right to give a
1 Poorly drafted or incomplete and 1 cumulative notice, which shall be sudden shock to the Contractor,
unsubstantiated claims for all previous disputes from the project start date till the date of
2 A failure to properly administer the contract 2
3 Failure to make interim awards on extensions New ranking
issuance the Performance Certificate to deduct payment from the
of time and compensation in 2019 Contractor and/or extend the Defects Notification Period.
Another chance is provided by FIDIC 2017 to give the Notice of
Claim if the period of 28 days had passed:
 The second ranked reason is for the failure of the contract FIDIC 2017 pursuant to Sub-Clause 20.2.2 ‘‘Engineer’s initial
administration. response” whereas if the Claiming party has failed to give the
 The third ranked reason is for the failure of the Engineer to Notice of Claim within the period of 28 days, then the Engineer
make an interim award regarding the extensions of time and shall within 14 days after receiving the Notice of Claim, give a
cost compensations. Notice to the claiming party accordingly (with reasons), and if
the Engineer does not give such Notice within this period of
The first reason can be avoided by using standard forms of Con- 14 days, then the Notice of Claim shall be deemed to be a valid
tracts such as FIDIC contracts which follow the new approach of Notice.
disputes avoidance, while the second reason may be settled by FIDIC 2017 had applied the approach of disputes avoidance:
appointing qualified Engineers and contract administrators; more- FIDIC 2017 followed a new approach which was not mentioned
over, the third reason may be settled by qualified Engineer. in FIDIC 1999, whereas FIDIC 2017 used the concept of early
While the most methods of Alternative Disputes Resolution in Notices for all circumstances in the project and advance warning
2019 & 2018 are as showed in Table 2: [11]. provisions have been included [24], to enhance the communication
between parties and avoid any possible disputes in the projects
 The first rank for Party-to-Party negotiations which is fast and from its inception.
almost no cost. FIDIC 2017 had kept the pace of the rapid development in the
 The second rank for Arbitration which has duration as shown in Egyptian construction industry regarding the Health and Safety
Fig. 2 and incurred each party high cost. sector:
 The third rank for Mediation which has less duration and less FIDIC 2017 gave more attention than FIDIC 1999 in the proce-
cost than Arbitration. dures of Health and Safety in Site, whereas FIDIC 2017 pursuant
to Sub-Clause 4.8 ‘‘Health and Safety Obligations” had obliged
Peaceful resolution of the dispute which passes before reaching the Contractor to provide to the Engineer the manual of health
the judiciary or international arbitration that those responsible for and safety which prepared for the Works, within 21 days from
the project have to be aware of the causes of conflict and work to the project commencement date and before starting the construc-
avoid them in the beginning of the project and the speed of han- tion works and activities at site.
dling and decision making with their claims [21] to avoid the dura- Moreover, FIDIC 2017 had gave the Contractor the right to not
tion of arbitration. be bound and execute any instructed variation order shall badly
The average duration of disputes resolution decreased from affect the Contractor to comply with the Sub-Clause 4.8 ‘‘Health
20 months in the year of 2018, to 17 months in 2018 [11] as shown and Safety Obligations” as, the construction industry is one the
in Fig. 2, every day in arbitration courts incurred each party high most dangerous in terms of workplace fatalities [25].
expenses.
The major differences between FIDIC 1999 which represent the
old approach of disputes settlement and FIDIC 2017 which repre-
sent the new approach of avoiding disputes are represented in, 3.1. Case study
but not limited to, the following points:
The obligatory constraint period for the Notice of Claim: 3.1.1. Project’s Information
FIDIC 2017 balanced the procedures of Claim for the Employer A Mega Project located in Cairo; Egypt shall be used as a case
and the Contractor, as both parties shall follow the written proce- study to determine which type of FIDIC edition is more suitable
dures in Sub-Clause 20.1 ‘‘Claims” [22], otherwise the claiming to the Egyptian market. The project payments are re-measured,
party shall not be entitled of the claim, therefore the Contractor the time for completion is 540 calendar days, the contractor’s
is not alone in such failures and the Engineer and Employer are scope of work is design, construction, testing, commissioning,
equally as culpable [23]. training, one-year operation and maintenance for a GIS substation
FIDIC 1999 pursuant to Sub-Clause 20.1 ‘‘Contractor’s Claims” 220/22 KV.
had obliged the Contractor only to follow the procedures to give Both the Employer and the Contractor are private companies
and the used contract consistent is un-balanced ad-hoc contract
which give privilege to the Employer than the Contractor.
Table 2 The key parties in project are the Employer, the Contractor, the
The rank of most common methods of Alternative Disputes Resolution in Middle technical consultant and the project Manager ‘‘the Engineer” which
East for years 2018 & 2019 [11]. is a subsidiary company to the Employer.
2019 MOST COMMON METHODS OF ALTERNATIVE 2018
RANK DISPUTE RESOLUTION RANK
1 Party-to-party negotiation 1
2 Arbitration 2 3.1.2. Disputes statement
3 Mediation 3 The major disputes in the project which threat the completion
of the project are represented in the following points:
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D. Mohamed Abdel-Hamid and A.-R. Alaa El-Din Mostafa Ain Shams Engineering Journal 14 (2023) 101963

Fig. 2. The average duration of disputes resolution for Middle East Area [11].

1. The Engineer is incompetent to deal with such type of contracts Therefore, let’s assume that FIDIC 1999 is the used contract
due to the complexity of such projects; therefore, the Engineer for the project, then the following shall occur: [26].
is not able to make a decision of all submitted claims by the For the dispute referenced (1) above:
Contractor. FIDIC 1999 had assured the competence of the Engineer by
2. The Employer shall not able to operate the project for a about inserting a new paragraph in sub-clause 3.1 ‘‘Engineer’s Duties
three years after the completion date due to the incompletion and Authority” that ‘‘the Engineer’s staff shall include suitably quali-
of the High Voltage transmission lines, which shall prevent fied engineers and other professions who are competent to carry out
the project operation; therefore, the Employer refuses to take- these duties”.
over the project without the Contractor’s completion for minor FIDIC 1999 allows the Employer to replace the Engineer, if the
works. Engineer is not competent to administer the works in site; more-
3. The on-shore training for the Employer’s staff is not completed over FIDIC 1999 allows the Contractor to object on the intended
by the Contractor and hereby the Employer refrains to issue the replacement Engineer with reasonable supporting documents, by
Taking-Over Certificate till completion of such training. the new sub-clause 3.4 ‘‘Replacement of the Engineer” which was
not stated in FIDIC 1987.
The contractor alleges that such training shall not prevent the Therefore, FIDIC 1999 had settled such possible dispute
issuance of the Taking-Over Certificate as the Contractor shall between the parties.
operate the project for one year and during such year the Contrac- For the dispute referenced (2) above:
tor shall complete the on-shore training. FIDIC 1999 gives the Contractor the right to request the
Taking-Over Certificate for the works except for such minor
4. The As-Built drawing still not approved by the Supervision con- works which shall not substantially affect the use of the works
sultant and the Employer refrains to issue the Taking-Over Cer- pursuant to Sub-Clause 10.1 ‘‘Taking Over of the Works and Sec-
tificate for the project without the approval of the Supervision tions”, and hereby the Engineer pursuant to the same sub-clause
Consultant for the As-Built Drawings. shall issue the Taking-Over Certificate for the works except for
such minor works.
The Contractor alleges that the refusal of the Supervision Con- Therefore, FIDIC 1999 had settled such possible dispute
sultant is not a reason for the Employer to prevent the issuance between the parties.
of the Taking-Over Certificate as such approval shall not affect For the dispute referenced (3) above:
the operation of the project and the As-Built drawings can be FIDIC 1999 does not state any condition related to the Training,
approved during the operation period. therefore the dispute shall not be settled if the parties used FIDIC
1999 as the project contract.
5. Prior to the end of the completion date, The Employer sent a For the dispute referenced (4) above:
cumulative notice to the Contractor to apply deductions from FIDIC 1999 at Sub-clause 4.1.d ‘‘Contractor’s General Obliga-
the Contractor’s dues for events arisen from the start of the pro- tions”, make the submission of the As-Built documents by the Con-
ject till the notice date, such deducted amounts which crashed tractor is a condition precedent to proceed in Tests on Completion
the Contractor’s cash flow. to issue the Taking-Over Certificate, and FIDIC 1999 did not men-
6. The Engineer issued variations to the Contractor with additional tion that the Engineer’s and Supervision Consultant approval, for
scope of work for items has no rates or prices specified in the As-Built documents, are needed to issue the Taking-Over
Contract, the dispute was arisen about the percentage of the Certificate.
Contractor’s profit, whereas the Engineer decrease such per- Hereby the Engineer pursuant to Sub-clause 4.1.d shall issue the
centage and the Contractor refuse to perform the variation Taking-Over Certificate for the works regardless the Supervision
order with such decreased percentage. Consultant approval.
Therefore, FIDIC 1999 had settled such possible dispute
Due to the aforementioned disputes, the project is very close to between the parties.
be not completed and the contract may be terminated; further- For the dispute referenced (5) above:
more, the contract situation changed from win-win situation to pursuant to sub-clause 2.5 ‘‘Employer’s Claim”, the Employer
lose-lose situation. shall give notice to the Contractor and the Engineer shall deter-
If the parties used FIDIC 1999 or FIDIC 2017 as the contract mine the entitlements of the Employer regarding such claim, but
between the Employer and the Contractor instead of the existing there is no constraint time to the Employer to send such notice
contract, what shall be happened to such project? of claim which is not fair.

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D. Mohamed Abdel-Hamid and A.-R. Alaa El-Din Mostafa Ain Shams Engineering Journal 14 (2023) 101963

On the other hand, the Contractor is obligated to send a notice FIDIC 2017 had obligated both of the Contractor and the
of claim within 28 days after the Contractor become aware or Employer with the same procedures of claims, in contrary of FIDIC
should have become aware of the event or circumstance or the 1999 which obligated the contractor only to follow such proce-
Contractor, otherwise the Time for Completion shall not be dures and that was not fair.
extended, the Contractor shall not be entitled to additional pay- FIDIC 2017 had obligated the Employer to follow up the claim’s
ment, and the Employer shall be discharged from all liability in procedures pursuant to sub-clause 20.1 ‘‘Claims” or otherwise pur-
connection with the claim. suant to sub-clause 20.2 ‘‘Claims for Payment and/or EOT” the Con-
Therefore, the dispute shall not be settled if the parties used tract Price shall not be reduced, and the Defects Notification Period
FIDIC 1999 as the project contract. shall not be extended.
For the dispute referenced (6) above: Therefore, such dispute shall be avoided between parties.
FIDIC 1999 did not identify the percentage of the Contractor’s For the dispute referenced (6) above:
profit for the works; furthermore, FIDIC 1999 mentioned a general FIDIC 2017 had avoided such dispute, as FIDIC 2017 had men-
statement which shall make a dispute between the project parties, tioned that the percentage of profit to be written in the Contract
such statement is ‘‘reasonable profit”. Date; moreover, if it was not written, then the percentage of profit
Therefore, the dispute shall not be settled if the parties used shall be 5 % of the direct cost.
FIDIC 1999 as the project contract. Therefore, such dispute shall be avoided between parties.
Therefore, let’s assume that FIDIC 2017 is the used contract
for the project, then the following shall occur: [22]. 3.1.3. Recommendation
For the dispute referenced (1) above: Construction contracts in Egypt need improvement to deal with
such dispute shall be avoided pursuant to sub-clause 3.1 ‘‘The the rapid development of Egyptian construction field with its com-
Engineer” which contains a new paragraph not mentioned in FIDIC plicity and new requirements to avoid disputes and saving billions
1999, such paragraph states that ‘‘The Engineer shall be a profes- spent in arbitration courts.
sional engineer having suitable, qualifications, experience and compe- This paper recommends the use of FIDIC 2017 which almost
tence to act as the Engineer under the Contract” in addition to a new covers all major disputes in the Egyptian construction field and clo-
condition which is also not mentioned in FIDIC 1999 and states sely matches with the principle of Egyptian Civil Code, but the par-
that ‘‘the Engineer shall be fluent in the contract ruling language‘‘. ties shall add some particular conditions for some disputes not
Therefore, based on the new mentioned criteria in FIDIC 2017 covered by FIDIC 2017 and the Egyptian Civil Law, such as reduc-
most of possible disputes between parties due to the Engineer’s tion of the Performance Security value by a percentage equal to
performance shall be avoided. the value of the taken-over Parts/Sections of works which had
For the dispute referenced (2) above: completed its Defects Notification Period, whereas keeping the
FIDIC 2017 is similar to FIDIC 1999 in such matter, as FIDIC Performance Security with its full amount for all project, even for
2017 gives the contractor the right to request the Taking-Over Cer- the works which had completed its Defects Notification Period,
tificate for all the completed works except for such minor works incurs the contractors unnecessarily extra bank expense.
pursuant to sub-clause 10.1 ‘‘Taking Over the Works and Sections”.
Therefore, such dispute shall be avoided between the parties. 4. Results
For the dispute referenced (3) above:
FIDIC 2017 inserted a new sub-clause 4.5 ‘‘Training” which is Drafting the contracts of Egyptian projects based on the new
not stated in FIDIC 1999, such sub-clause obligated the contractor approach of disputes avoidance is an attractive solution to facili-
to carry out all trainings specified in the contract. tate the contract administration at execution phase and minimize
FIDIC 2017 expressly stated that ‘‘If the Specification specifies disputes between project parties which save billions of Egyptian
training which is to be carried out before taking over, the Works shall Pounds in arbitration courts.
not be considered to be completed for the purpose of taking over under Using suite of FIDIC 2017 contracts which follow the approach
Sub-Clause 10.1 [Taking Over the Works and Sections] until this of disputes avoidance and closely matches with the principle of
training has been completed in accordance with the specification.‘‘. Egyptian Civil Code is an ideal solution to mitigate all possible risks
FIDIC 2017 expressly mentioned in sub-clause 10.1.d ‘‘Taking of disputes as such suit of contract in addition to the Egyptian Civil
Over the Works and Sections” that ‘‘the Works shall be taken over Code mention more detailed clauses avoid the disputes from its
by the Employer when if applicable, the Contractor has carried out inception. In addition to the importance to select the most suitable
the training as described under Sub-Clause 4.5 [Training].”. contractor for the required work by the employer as recommended
Therefore, such dispute shall be avoided between parties. before by other studies and researches. [11].
For the dispute referenced (4) above: It is not good to use mysterious clauses or sentences in Egyptian
FIDIC 2017 inserted a new sub-clause 4.4.2 ‘‘As-Built Records” contracts, whereas more obvious well drafting contract using accu-
which is not stated in FIDIC 1999 which states that ‘‘The as-built rate words shall facilitate the contract administration during the
records shall be submitted to the Engineer for Review, and the Works execution stage and deliver the project to its completion date with-
shall not be considered to be completed for the purposes of out major disputes or damages which shall be a vital item to
taking-over under Sub-Clause 10.1 [Taking Over the Works and Sec- encourage investors for more secured investments.
tions] until the Engineer has given (or is deemed to have given) a
Notice of No-objection under sub-paragraph (i) of Sub-Clause 4.4.1 5. Conclusions
[Preparation and Review].”.
FIDIC 2017 expressly mentioned in sub-clause 10.1.b ‘‘Taking This paper confirmed that used contracts at Egyptian construc-
Over the Works and Sections” that ‘‘the Works shall be taken over tion industry need to be upgraded to the new contracts manage-
by the Employer when if applicable, the Engineer has given (or is ment approach of disputes avoidance. Also, it is preferable to use
deemed to have given) a Notice of No-objection to the as-built records FIDIC 2017 contracts which adapt such approach and closely
submitted under Sub-Clause 4.4.2 [As-Built Records].”. matches with the principle of Egyptian Civil Code which shall avoid
Therefore, such dispute shall be avoided between parties. huge number of major disputes between the parties of Egyptian
For the dispute referenced (5) above: construction industry.

6
D. Mohamed Abdel-Hamid and A.-R. Alaa El-Din Mostafa Ain Shams Engineering Journal 14 (2023) 101963

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