Introduction by Fernando Marcondes

Editor & Lead Author: Fernando Marcondes – L.O.Baptista- Sao Paulo

Editorial: Almedina- Brazil

 

Introduction by Fernando Marcondes

The proposition of reuniting tendencies and practices of contracting parties in the international environment of the Construction sector was made in 1997 [1], in a brilliant article which considered that due to the increasing infrastructure projects developed internationally, it would be necessary to go beyond laws and custom and usage. The adoption of international contract models and the practice developed during the execution of these projects had already created, at that stage, a collection of references that could not be ignored by the interpreters, whether they were judges, arbitrators, dispute boards members or even parties directly involved with the execution of these contracts and responsible for the decision-making throughout a project.

Molineaux said in his article that, “If there can be said to be a lex mercatoria for international traders, we should as well recognize that there are ‘construction law’ principles which, by reason of the activities of the multinational engineering firms (which draft contracts) and of the development banks (which standardize contract terms), already receive de facto recognition for international construction”.

The author also pondered that “To the extent that similar provisions are used in construction contracts in different countries, including their arbitration clauses, a consistent interpretation and application of such provisions would be valuable in establishing greater certainty, thereby promoting participation in construction internationally”.

In fact, in addition to some basic principles inherent to any contractual relationship (pacta sunt servanda, rebus sic stantibus, abuse of rights, culpa in contrahendo, good faith, nullity of contract due to the lack of consent, mitigation duty and many others), there are principles which, by virtue of the universal practice in the Construction environment, serve as guidelines on the interpretation of questions presented by the parties in a dispute.

Some of these specific principles of “Construction Law” mentioned by Molineaux are: Variations in price and deadline are expectable and do not derive from defects in the contract; the increased cost must be borne by the owner when there are eventuate physical site conditions more burdensome than those informed in tender documents and, a contrario sensu, better conditions than the expected must result in a credit to the owner; the constructive methods and the sequence of works must be defined by the contractor, except if there is a structural or other impact that is evident through a site investigation or noted in the tender documents (the principle encourages the contractor to work in the most efficient way possible, aiming to increase results); time extension claims must be made and addressed on time, and must be also analyzed and responded by the contractor timely; when the amount of losses could not be established with a certain level of certainty, the value must be fixed according to the prudent criteria of the judge; the parties must act promptly to negotiate and define the fate of the claims; a contractual clause that sets forth formal notice as a requirement for the validity of a claim may eventually be ignored and considered as an unnecessary formality when it is clear that the owner is aware of the facts and is informed that the claim is “on the way”.

It should be noted that the propositions are drawn from the practical day-to-day universe of an ongoing project and portray situations that are universally faced (in Brazil or in China, in England or in Africa, in the United States or in India). The problems are the same and there is a common sense about how they should be addressed and treated. It is, therefore, a true lex constructionis, a framework of contractual rules, custom and usage practiced throughout the world, regardless of whether it is inserted in a common law or a civil law environment.

This collective work sought to reunite doctrine from Brazilian Law professionals that, in fact, have practical experience in the peculiar Construction environment, as well as renowned foreign authors with varied experiences in the area. Richard Bailey presided Society of Construction Law for years and is an active British lawyer in the area; Doug Jones, professor, arbitrator and lawyer, is perhaps the most respected name in Construction Law in the world; Pierre Genton is a worldwide reference in FIDIC contracts and was one of the members of the dispute board in the iconic expansion work of the Panama Canal; Roger Peters is an experienced member of dispute boards in the United States and a great promoter of the tool; Albert Bates is also an experienced lawyer and claims manager in international projects; Juan Eduardo Figueroa is a Chilean lawyer, former president of Cámara Chilena de la Construcción, with huge historic background as a dispute board member, and professor of Construction Law in Universidad de Los Andes, who was also convened by the Supreme Court of Chile, for three years, as an appointed judge; Jose Andres Lamas is a Peruvian laywer exclusively dedicated to Construction Law, with academic degree in Construction Law from Strathclyde University (United Kingdom), and professor of this discipline at the Universidad del Pacífico.

All chapters seek to address, in a practical and didactic way, the most tormenting questions concerning the Construction environment, and, therefore, pursue to contribute to the effective consolidation of legal knowledge for practical application by contract operators, parties in relationships established for the execution of construction projects, and arbitrators, judges or dispute boards members.

This is what is meant by lex constructionis. As an organizer and co-author of this collective work, I hope to have achieved the objective of contributing to the consolidation of this vast universe of knowledge, much-needed to the pacification of conflicts resulting from an area of utmost importance for progress and social welfare. fm@baptista.com.br

[1] Charles Molineaux, ‘Moving Toward a Construction Lex Mercatoria – A Lex Constructionis’, Journal of International Arbitration, (© Kluwer Law International; Kluwer Law International 1997, Volume 14 Issue 1) pages 55 – 66.