THE NEW FIDIC CONDITIONS OF

CONTRACT (2017) FROM THE POLISH

PERSPECTIVE

1 June 2018
CONTENT

03 07
Modifications of the general
Key changes in the 2017 principles governing contractual
edition of the FIDIC liability for damages in FIDIC
conditions of contract contract templates (Paweł
(Krzysztof Kycia) Bartosiewicz)
13
The role of the contract
engineer in FIDIC contract
templates in resolving
disputes between the
employer and the contractor
(Magdalena Krajewska)

18
A taking-over certificate as
a document confirming the
completion of works (Anna
Kopania)
23
The obligation to keep
contemporary records – the
FIDIC Yellow Book and Red
Book 1999 and 2017 (Szymon
Sakowski)
27
Unilateral dissolution of a
contract for building works
based on the 1999 and 2017
versions of the FIDIC template
(FIDIC sub-clauses 15.2 and
16.2 in the light of Polish law)
(Mikołaj Strojnowski)

30
Notification of claims – the
deadline and the effects of its
expiry – some considerations
on the basis of the 1999 and
2017 versions of the FIDIC
Conditions of Contract
(Monika Leszko)
35
The binding force of decisions
issued by the dispute adjudication
board – FIDIC conditions of
contract: the 1999 and 2017
versions of the Yellow Book and
the Red Book (Piotr Olkowski)

02  | The New FIDIC Conditions of Contract (2017) from the Polish Perspective
KEY CHANGES IN THE 2017 EDITION OF
THE FIDIC CONDITIONS OF CONTRACT

www.dlapiper.com  |  03
 KRZYSZTOF KYCIA, DLA PIPER

In December 2017, the International Federation of Engineers-Consultants (the original

French name: Fédération Internationale Des Ingénieurs-Conseils, FIDIC) published the
long-awaited second edition of Conditions of Contract for Construction, Conditions of
Contract for Plant & Design Build and Conditions of Contract for EPC/Turnkey Projects,
i.e. the popular FIDIC conditions of contract. The second edition is meant to
be an updated and revised version of the first edition of the FIDIC books from
1999, however, the changes made are very far-reaching. Despite the fact that the
fundamental concepts and structures on which the former contracts were based have
been retained, new FIDIC contract templates regulate the procedures and contract
administration in much greater detail.

INTRODUCTION LONGER CONTRACTS – FEWER DISPUTES?

The main purpose of the changes is to make the FIDIC
general conditions of contract clearer, more transparent,
and as a result, to ensure legal certainty for both parties
to a contract. The list of definitions has been extended –
for the first time they are arranged in alphabetical order,
which is positive from the users’ perspective – and most
of the sub-clauses that presented some interpretation
problems have been expanded and made more specific.
A number of procedures have been added that regulate
the rights and obligations of the parties to a contract in
situations in which problems with the realisation of an
investment project typically occur. The second edition
of the general contract conditions is intended not only
to proportionally allocate the liability for particular risks
between the parties to the contract, but also constitutes
an instrument for proactive project management and
problem-solving at the earliest possible stage. From the
contractors’ perspective, the direction of the intended
changes are definitely positive. However, sometimes
doubts may arise as to whether the envisaged solutions
are appropriate for the realisation of the intended
purposes. It may require considerable effort to bring
the work of contractors, engineers, and employers into
compliance with the newly amended FIDIC general
conditions of contract.
The most conspicuous feature of the new FIDIC
general conditions is that they are much longer than
the previous version. Although they contain nearly the
same number of clauses (21 as compared to the previous
20 clauses), the new general conditions of contract for
the work designed by the employer (the so-called red
book) has 108 pages in the English version, whereas
the previous version had around 60 pages (depending
on the edition). The increase in length results partly
from the insertion of new procedural regulations
and, to a greater extent, from the expansion of the
existing sub-clauses in which particular issues have been
regulated more precisely. This is consistent with the
trend (which can also be observed on the Polish market)
of creating comprehensive contracts that regulate the
parties’ rights and obligations in excessive detail. The
assumption is that this approach will ensure greater
legal certainty and not create grounds for potential
disputes. However, it is questionable whether this is
the right direction for the development of contractual
practice. Firstly, such detailed documentation makes it
difficult for the parties to fully understand the contract
and use it in their everyday work. And, secondly, the
more complex the contract is, the greater the risk
that interpretation disputes related to its content will
occur. Misunderstandings are additionally aggravated by
defective translations of the contract templates from
foreign languages, and in particular from English, that
are used on the market. It must be loyally stated at the

04  | The New FIDIC Conditions of Contract (2017) from the Polish Perspective
beginning that the 2017 edition of the general conditions
of contract is even a more complex document than
the version used so far and will not make the above-
described problems disappear.
In addition, a characteristic feature of the new general
conditions of contract are the numerous cross-
references between particular clauses. This may make
it difficult to modify FIDIC templates with the use of
specific terms of contract, and experience shows that the
general conditions are subject to much greater changes
in Poland than, for example, in the United Kingdom.
Therefore, problems may occur, at least in the initial
period when the new general conditions start to be used,
in connection with insufficiently thought-out changes
made to the FIDIC templates and from the lack of
consistency among particular sub-clauses of a contract.
BALANCE BETWEEN THE PARTIES’ RIGHTS
AND OBLIGATIONS
An important direction of change in the new FIDIC
templates is the attempt to achieve a balance between
the employer’s and the contractor’s rights and
obligations. Starting from 2017, the duty of confidentiality
applies to the contractor and the employer in the
same way. Also, the rules concerning claims made by
the parties have been unified – in the 1999 edition the
employer’s claims were regulated in a separate sub-clause
2.5 in a manner more advantageous than the contractor’s
claims in clause 20, i.e. the employer was not bound by
strict deadlines for submitting claims on pain of their
expiry. In the new edition, the claims of both parties to
the contract are described in clause 20 and both parties
have to submit them by specified contractual deadlines.
Obviously, given Polish practice, the issue of whether the
provisions imposing obligations on the employer will not
be subject to modifications in the specific conditions of a
contract remains open.
PROACTIVE FORMALISM
As mentioned above, the changes in the FIDIC general
conditions are generally aimed at forcing the parties
to assume a more proactive attitude to contract
management. In particular, the new sub-clause 8.4
[Advance warning] requires the parties to inform each
other in advance about any circumstances or events
that might adversely affect the realisation of the
contract. It should be stressed that this duty also applies
to the employer and the engineer, which is another
manifestation of the effort to achieve a balance between
the parties in terms of their rights and obligations.
More stringent requirements concerning everyday
project management entail greater formalism in the
new general conditions of contract. The most striking
example is the question of notices, as the new sub-clause
1.3 stipulates a number of requirements that a letter
must meet to be considered as a valid and effective
notice under a contract. In particular, a letter must
expressly state that it is a notice and specify the sub-
clause of the contract under which it has been made.
The intention of this change is that the new formal
requirements should provide greater legal certainty
and eliminate the phenomenon of informal notices
contained, for example, in time schedules, monthly
reports, or records of the construction board’s meetings.
It should be remembered that notices are inherently
connected with the subject-matter of claims because if
the contractor does not effectively file a notice by the
prescribed deadline, then – pursuant to clause 20 of
the general conditions of contract – the claim expires.
In practice, the new regulations may actually be the
source of additional problems. For example, it is not
obvious what will happen in the situation where the
contractor sends a letter whose content corresponds
to the claim notice but which is not expressly called a
“notice” or where the letter which is called a “notice”
does not contain a reference to a specific sub-clause of
the contract. The question then arises as to whether
– in the event of a dispute before a state court of law
or before a court of arbitration – this kind of formal
flaw will be a determining factor leading to the dismissal
of the contractor’s claim. This may cause additional
complications in disputes relating to the effectiveness of
prescribing contractual deadlines for submission of claims
under Polish law.
Another expression of increased formalism is the
insertion of numerous deeming provisions under which
specific legal effects arise from the failure of the parties
to take actions by prescribed deadlines. One example
is the new sub-clause 20.2.1, pursuant to which if the
www.dlapiper.com  |  05
contractor makes a claim after the contractual deadline,
the engineer has to inform the contractor within 14 days,
by way of a notice, that the claim is late. If the engineer
fails to do so, the contractor’s notice of the claim is
considered to have been made in time. Likewise, under
the new sub-clause 3.7.5, a party that is dissatisfied with
a decision made by the engineer must submit a relevant
notice within 14 days. If the party fails to do so, the
engineer’s decision becomes final and binding on the
parties.
In practice, stricter formal requirements in the
realisation of contract may lead to a number of
consequences. One can expect an increased number
of claims because, from the legal point of view, it will
definitely be more prudent to make a claim by a
contractual deadline and then analyse its justifiability
afterwards. In order to comply with a number of the
new procedures, the parties to a contract may be forced
to cooperate even more closely with professional legal
advisors from the very beginning of the realisation of
the project. In extreme cases, it may happen that the
formalities and the observance of procedural rules will
require the use of a disproportionate amount of time
and resources in comparison to actually carrying out the
construction work. The response of the market to this
type of situation is unlikely to be enthusiastic.
NEW OBLIGATIONS OF THE ENGINEER
Significant changes have also been made in relation
to the role and duties of the engineer. In particular,
the requirement of sub-clause 3.7 that the engineer
must act neutrally in making decisions has caused much
controversy. It is undoubtedly desirable that the engineer
perform the role of a neutral, professional arbitrator in
disputes between the contractor and the employer, but
06  | The New FIDIC Conditions of Contract (2017) from the Polish Perspective
it should not be forgotten that the engineer is bound
by a separate contract for the provision of services
with the employer and, in principle, acts on its behalf
during the realisation of the contract. Therefore, it is
doubtful whether one may reasonably demand neutrality
from the engineer and the question arises as to what
neutrality could mean in this situation. At the same
time, it is not clear what consequences would follow
from the engineer’s partiality, and in particular whether
the engineer would be exposed to liability if damage
were caused to any of the parties to the contract in
connection with his lack of impartiality. Furthermore,
there are organisational challenges for contract
engineers connected with the changes in the FIDIC
general conditions of contract that should be taken into
account. The new procedures impose an obligation on
the engineer to take actions within short, strictly defined
deadlines, on pain of adverse legal consequences for the
employer, which will require engineers to react more
quickly to events taking place on the construction site.
Greater formalism in communication with the contractor
and the employer may make it necessary for firms
rendering contract engineer services to engage greater
resources in the service of projects.
The following articles discuss in greater detail some
selected institutions and clauses of the new FIDIC
general conditions of contract. We hope that the
analysis of these institutions and clauses in the context
of both domestic and international experience will help
clients to understand the implemented changes better
and contribute to the improvement of the practice of
applying FIDIC contract templates in Poland.
We invite you to read them!
MODIFICATIONS OF THE GENERAL PRINCIPLES
GOVERNING CONTRACTUAL LIABILITY FOR
DAMAGES IN FIDIC CONTRACT TEMPLATES

www.dlapiper.com  |  07
 PAWEŁ BARTOSIEWICZ, DLA PIPER

FIDIC contract templates regulate a broad range of issues related to liability for
damages of the parties to a contract in the event of a breach. However, the applied
constructions originate from foreign legal systems and, therefore, do not always
conform to the requirements of Polish law, including the provisions of the Civil Code.
Moreover, in particular conditions of contracts used by Polish employers, additional
regulations are inserted that contain stricter rules concerning contractors’ liability.
As a whole, this creates a complicated and non-transparent system of rules where
disputes on the interpretation of particular contractual provisions may arise.

INTRODUCTION
The second edition of Conditions of Contract for
Construction, published by FIDIC in December 2017,
introduces changes concerning the rules of contractual
liability of the parties to a contract, which will be
discussed in this article in the context of the existing
Polish experience. The Conditions of Contract for
Construction For Building and Engineering Works Designed
by the Employer (the FIDIC Red Book 2017) and the
Conditions of Contract for Construction For Building and
Engineering Works Designed by the Contractor (the FIDIC
Yellow Book 2017), which are of principal significance
for the Polish market will be discussed together. In the
confines of the issues addressed, the provisions of both
templates are for the most part the same and where any
differences appear, it has been each time pointed out in
the text.
To begin with, it must be clarified that in accordance with
the principle of freedom of contract, the parties have
a significant degree of freedom to modify the general
principles governing liability for damages as laid down
in the Civil Code. It is permissible to define the types
of categories of circumstances for which the debtor is
liable, to change the rules concerning causal relationship,
as well as to specify, on a quantitative basis, the amount
of the debtor’s liability. The most important limitation
regarding the scope of permissible changes is provided
for in Art. 473 § 2 of the Civil Code, whereby it is not
permissible to exclude or limit the liability of the parties
to a contract for wilful damage. Also, the content of
Art. 3531 of the Civil Code must be taken into account,
according to which freedom of contract is generally
restricted not only by the provisions of law, but also by
the character (nature) of the legal relationship and the
principles of social existence.
LIMITATION OF LIABILITY
In the 1999 FIDIC general conditions of contract, the
principal regulation concerning limitation of liability for
damages of the parties to a contract is contained in sub-
clause 17.6. In the 2017 edition, the provision governing
the limitation of liability has been moved to sub-clause
1.15 and its wording has been changed. However, its basic
assumptions and mechanism of operation have remained
the same. Pursuant to the new sub-clause 1.15, neither
party is liable to the other party for the damage resulting
from the loss of the possibility to use the works, the loss
of profit, the loss of any contract, or for any indirect or
consequential loss or damage which may be suffered by
the other party in connection with the contract, with the
exception of liability on the basis of a closed catalogue
of indicated sub-clauses. Subject to the exceptions
indicated in another closed catalogue of contractual sub-
clauses, the contractor’s liability toward the employer
may not exceed an aggregate maximum sum stated in
the contract, and if such a sum has not been expressly
stated, the amount of the accepted contract amount.
Also, the sub-clause stipulates that the limitation of

08  | The New FIDIC Conditions of Contract (2017) from the Polish Perspective
liability does not apply to any case of fraud, gross
negligence, deliberate default or reckless misconduct by
any of the parties.
In principle, the regulation discussed above is consistent
with the mandatory provisions of Polish law, as it
expressly provides for unlimited liability for damage that
is caused wilfully. However, it is not adjusted to Polish
legal constructions in many regards. The first part of the
sub-clause seems to be intended to exclude the parties’
liability for lost profits (lucrum cessans) in the meaning
of Art. 361 § 2 in fine of the Civil Code, but since FIDIC
does not use this expression, the exact scope of the
exclusion in particular factual states may give rise to
some doubts. For instance, such doubts may arise when
the parties’ liability in the event of the rescission of a
contract is considered. It should be noted that both sub-
clause 17.6 of the 1999 general conditions of contract and
the new sub-clause 1.15 provide for the possibility of the
contractor’s seeking lost profit from the employer under
sub-clause 16.4 [Payment after Termination by Contractor]1,
but the employer does not have the same right under
sub-clause 15.4 [Payment after Termination by Employer].
Therefore, the legal situation of the contractor is more
favourable because if the contractor effectively rescinds
the contract, it has an additional claim for redress of the
damage in the form of lost profits. On the basis of the
cited sub-clauses, the contractor may also defend itself
against the employer’s claim for payment of damages for
lost profits if the contract is rescinded by the employer.
Secondly, the construction of the concepts of indirect
and consequential loss may give rise to concerns. Under
English law, these concepts have the meanings established
in the prevailing judicial decisions and modify the
scope of the causal relationship such that they exclude
the debtor’s liability for objectively non-foreseeable
damage arising from the breach of a contract, even if
the parties could have subjectively foreseen them upon
the conclusion of the contract2 . Whereas in Polish law,
the debtor is liable, in principle, only for the normal
consequences of the action or omission that gave rise
to the damage (Art. 361 § 1 of the Civil Code) and,
in practice, it may be doubtful whether the indirect
and consequential loss formula changes this rule in
any way. By way of supplementary explanation, the
above-described limitation of liability of the parties was
originally introduced in Great Britain because the events
of indirect and consequential loss were not subject to
standard insurance cover3. Therefore, it does not seem
necessary in the Polish reality.
Thirdly, an issue that needs to be interpreted is the scope
of events that are not subject to limitation of liability,
i.e. fraud, deliberate default, or reckless misconduct.
In Polish law, fraud means a criminal offence under Art.
286 § 1 of the Criminal Code, but this term is not used in
civil law. It seems that in interpreting contracts governed
by Polish law, fraud should be construed simply as a
deliberate action. Therefore, limitation of liability will not
apply to damage caused wilfully or as a result of gross
negligence.
Save for the foregoing doubts, the default solutions in
the FIDIC general conditions of contract should be seen
as being consistent with the principles of contractual
balance and as being relatively favourable to contractors.
In addition to the above-mentioned issue of damages for
lost profits after the rescission of a contract, another
thing to be noted is that sub-clause 1.15 of the 2017
general conditions of contract provides for the unilateral
limitation of a contractor’s maximum liability for
damages, expressed as a sum, but not of the employer’s
liability. The authors of the 2017 new general conditions
of contract also proposed, as an option, a more specific
formulation of sub-clause 1.15 by introducing separate
sum limitations in respect of particular kinds of liability
under the subsequent sub-clauses of the contract4.
Certainly, such a modification would be favourable to
contractors, but it is doubtful whether it will be widely
used in Poland.
Polish practice concerning the limitation of liability in
contracts based on FIDIC templates is not uniform. In
the particular conditions of contract template currently
used by GDDKiA5, the entire sub-clause 17.6 of the

1
  EIC Contractor’s Guide to The FIDIC Conditions of Contract for Construction (The New Red Book), International Construction Law Review, 2003, p. 77.
²  J. Glover, Understanding the New FIDIC Red Book. A Clause-By-Clause Commentary, London 2009, point 17-032, p. 346
³  N. Bunni, The FIDIC Forms of Contract. Third Edition, London 2005, point 23.3.14, p. 532
4
  Conditions of Contract for Construction, second edition FIDIC 2017, Guidance on the Preparation of the Particular Conditions, pp. 16 – 18.
5
 General Directorate for National Roads and Motorways, template published on the GDDKiA’s web site https://www.gddkia.gov.pl/pl/1995/Wzorcowe-Warunki-Kontraktowe-WWK-dla-systemu-Projektuj-i-
buduj (accessed on 24 March 2018).

www.dlapiper.com  |  09
1999 general conditions of contract has been deleted in accordance with the strict reading of the model
and instead of the limitation of liability of the parties to a provisions of the FIDIC books, indemnities granted by
contract, a detailed list of contractual penalties contained the contractor and the employer cover, in principle, the
in sub-clause 8.7 has been added, providing for stricter consequences of the damage arising from the deliberate
liability of the contractor. In PKP PLK’s6 particular or negligent acts of the relevant parties. Indemnities in
conditions of contract, there are no changes to the a broader scope are granted only in respect of specific
wording of sub-clause 17.6 and therefore it remains in full damage.
force in railway contracts, subject to the above-described
New sub-clause 17.6 provides for the mutual reduction
doubts and potential problems.
of liability on the basis of indemnities in the event that
any circumstances attributable to the other party may
INDEMNITIES have contributed to the damage, which makes the
Considerable interpretation difficulties under Polish FIDIC contractual mechanism similar to the statutory
law may arise from sub-clause 17.1 of the 1999 general rules of recourse liability in Polish law. It must be noted
conditions of contract, which provides for mutual that in the event any third parties raise claims against
indemnities for the parties to a contract. Indemnities either party for damage incurred in connection with
is an instrument originating from common law legal performing a contract, mutual settlements between
systems, by which the parties to a contract undertake the employer and the contractor would be regulated
to release each other from liability for certain under the statutory model by Art. 441 § 2 and § 3 of
circumstances and to pay the costs of the claims that the Civil Code. On the basis of these provisions, the
may be raised by third parties on the basis thereof 7. parties would be entitled to pursue recourse claims
In particular, an indemnity may entitle a party to demand in proportion to the degree to which each of them
the repayment of the costs that would otherwise be contributed to the occurrence of the damage and their
non-refundable as they are not directly connected fault. It is not clear whether in the event of a dispute the
with the breach of the contract by the other party8. contractual indemnities would have an impact on the
In contracts governed by Polish law, sub-clause 17.1 is, application of the foregoing rule in the relations between
to a large extent, unclear and incomprehensible – the the contractor and the employer.
term indemnities has been inaccurately translated as Irrespective of the above doubts, particular conditions
damages and the phrase saying that the contractor will of contract drafted by Polish employers provide for
secure the employer has been inserted in the content the application of indemnity clauses. They contain
of the provision, and yet, it is not clear what security both general indemnities for any damage caused by
is meant in this context. In the event of a dispute as the contractor to anyone in performing a contract
to the construction of the provisions of the contract, (sub-clause 7.1 of GDDKiA’s particular conditions)
the contractor will be in a better position because any and detailed regulations concerning particular cases
doubts should be interpreted, in accordance with the of liability (sub-clause 7.1 of PKP PLK’s particular
contra proferentem construction rule, to the disadvantage conditions). For instance, in sub-clause 4.18 of its
of the party which has drafted the contract. This means particular conditions of contract, GDDKiA provides
that in contracts concluded under public procurement for the contractor’s obligation to release the employer
law, any unclear provisions should be interpreted to the from liability and to cover the costs arising from the
disadvantage of the employer9. This is a universal rule contractor’s breach of the obligation to repay the
that is also in force in foreign legal systems10. employer the costs incurred as a result of unplanned
In the 2017 FIDIC general conditions of contract, track closures and delays in train services, which results
the provisions on indemnities have been moved to from the specific nature of risks occurring in the railway
sub-clauses 17.4 and 17.5. It must be underlined that sector. The validity and effectiveness of indemnity clauses

6
  PKP Polish Railway Lines, specific conditions of contract in respect of contract No. 90/101/0036/17/Z/I and No. 90/101/0037/17/Z/I concluded by PKP PLK, as representative examples, have been analysed.
7
  E. Baker, B. Mellors, S. Chalmers, A. Lavers, FIDIC Contracts: Law and Practice, London 2009, point 7.58, p. 359.
8
  Conditions of Contract for Construction, second edition FIDIC 2017, Guidance on the Preparation of the Particular Conditions, p. 13.
9 
The judgment of the Supreme Court of 29 April 2016, Case No. I CSK 306/15, Lex No. 2032362.
10 
N. Bunni, The FIDIC…, op. cit., point 3.10, p. 68.

10  | The New FIDIC Conditions of Contract (2017) from the Polish Perspective
in contracts governed by Polish law should be evaluated
each time on the basis of their Polish wording and the
circumstances of the specific case. In particular, it is
doubtful whether the contractor would be obliged to
release the employer from liability and from paying for
third-party claims in the situation where such claims are
the result of actions for which the employer is at fault.
CONTRACTOR’S LIABILITY FOR DELAY
The question of the contractor’s liability for damages
for a delay in performing a contract has been regulated
in sub-clause 8.7 of the 1999 FIDIC general conditions
of contract and in the corresponding sub-clause 8.8
of the 2017 second edition titled [Delay Damages].
The obligation contained in those sub-clauses for the
contractor to pay the employer a specific sum for each
day of delay constitutes an example of a contractual
penalty under Polish law and, therefore, Articles 483
and 484 of the Polish Civil Code apply. In the default
FIDIC model, the possibility of the employer’s seeking
damages of an amount exceeding the amount of the
contractual penalties has not been provided for and,
therefore, it would be inadmissible on the basis of
Art. 484 § 1, sentence two of the Civil Code. In Polish
market practice, sub-clause 8.7 is subject to far-reaching
modifications in particular conditions of contract and
most often the employer reserves the right to seek
additional damages under general rules. Both GDDKiA
and PKP PLK decided to insert in their particular
conditions of contract a long list of contractual penalties
for a contractor’s delay in meeting the final deadline
and the milestones in the course of the realisation of a
project.
SUB-CLAUSES 1.9 AND 2.1 OF FIDIC –
PRACTICAL PROBLEMS IN POLAND
In the existing Polish judicial decisions, the issues of
interpretation of sub-clauses 1.9 and 2.1 of the FIDIC
general conditions of contract have acquired a particular
significance. Sub-clause 2.1 [Right of Access to the Site]
of the 1999 general conditions of contract contains a
11
 E.g. the judgment of the Court of Appeal in Warsaw of 25 May 2012, Case No. VI ACa 30/12, Lex No. 1267467; the judgment of the Court of Appeal in Warsaw of 14 March 2013, Case No. VI ACa
1151/12, Lex No. 1313443.
12
 The judgment of the Court of Appeal in Warsaw of 14 March 2016, Case No. VI ACa 207/15, Lex No. 2115408.
13
 The judgment of the Supreme Court of 29 April 2016, Case No. I CSK 306/15, Lex No. 2032362.
regulation concerning the effects of the contractor’s
failure to fulfil the obligation of timely delivery of the
site to the contractor. In this situation, the contractor
was entitled, firstly, to demand the extension of time
for completion and, secondly, the repayment of the
incurred costs plus reasonable profit, which were
included in the contractual price. The same legal
mechanism was included in sub-clause 1.9 [Delayed
Drawings or Instructions] in relation to the delays and
costs incurred by the contractor as a result of the delay
in receiving designs (the FIDIC Red Book) or as a result
of the contractor’s having complied with the employer’s
specification (the FIDIC Yellow Book). In the second
edition of the general conditions from 2017, the essence
of the contractor’s rights has remained unchanged.
It should be pointed out that these provisions are more
favourable to the contractor than the general rules of
the Civil Code, pursuant to which the contractor may, in
the event the employer fails to perform its contractual
obligations, seek (on the basis of Art. 471 of the Civil
Code) the payment of damages, which, however,
would not include a reasonable profit. In the contracts
concluded by GDDKiA in the past, point b) of the above-
mentioned sub-clauses was deleted from the particular
conditions of contract and, therefore, contractors had
no right to demand the refund of costs incurred in
connection with the delay caused by the employer.
In the older decisions of state courts, a view prevailed
that the deletion of point b) of the sub-clauses was
tantamount to the exclusion of the employer’s liability
for damage suffered by the contractor as a result of
delays within the limits permitted by law, i.e. save for any
damage caused intentionally11. However, in more recent
judicial decisions, a position has emerged according
to which, in the light of the principles governing the
construction of the statements of intent arising from Art.
65 § 1 and § 2 of the Civil Code, the deletion of point
b) of the sub-clauses, as such, does not constitute the
grounds for ascertaining that the parties modified the
principles governing general liability for damages arising
from Art. 471 and the following articles of the Civil
Code12 . In addition, the Supreme Court expressed its
www.dlapiper.com  |  11
view on this issue13. It presented a convincing justification judicature gives contractors the ability to demand that
that although – by deleting parts of the above-mentioned employers redress damage arising from the extension of
sub-clauses – the parties excluded the possibility of the time for the completion of a project.
increasing the accepted contract amount in the event
of the occurrence of certain circumstances, this is not
tantamount to the exclusion of the employer’s liability
for damages for the breach of its obligations under a
contract for building works. This concerns, in particular,
the events of breaching the principal obligations of the
employer arising from Art. 647 of the Civil Code, such
as ensuring timely access to the building site or delivering
a non-defective design. The newly established line of

12  | The New FIDIC Conditions of Contract (2017) from the Polish Perspective
THE ROLE OF THE CONTRACT ENGINEER IN
FIDIC CONTRACT TEMPLATES IN RESOLVING
DISPUTES BETWEEN THE EMPLOYER AND
THE CONTRACTOR

www.dlapiper.com  |  13
 MAGDALENA KRAJEWSKA, DLA PIPER

INTRODUCTORY REMARKS of particular importance to the financial settlements

between parties such as the evaluation of the employer’s
There is a popular saying in the construction sector
and contractor’s claims5 or the valuation of the works
that the key to the proper and efficient realisation
as at the date of rescission of the agreement6. The
of an investment project is a good contract engineer.
aim of this paper is to compare the abovementioned
This is because in the course of carrying out a project,
regulations, to identify the modifications in the provisions
the contract engineer has a wide variety of obligations
related to the role of the contract engineer in resolving
that often require taking a different approach towards
disputes, and to attempt to evaluate those changes.
the parties to the contract. Depending on the function
fulfilled by the engineer, its duties may be divided into
two classes: (i) those related to supervision for the SUB-CLAUSE 3.5 [DETERMINATIONS] AND
investor and (ii) those related to resolving disputes PRACTICAL PROBLEMS CONNECTED WITH
between the employer and the contractor. ITS APPLICATION

In carrying out the supervision for the investor, the Sub-clause 3.5 [Determinations] in the 1999 version of
engineer administers the contract and ensures its proper FIDIC7 contained a brief description of the engineer’s
technical performance. In this regard, the engineer duties as a mediator between the parties to a contract.
acts as the employer’s agent, being liable towards the In the event of any differences of opinion between
employer and receiving remuneration for performing the employer and the contractor, the engineer had
its tasks1. As for the arbitral function, it is assumed to follow a two-step procedure, i.e. firstly, to consult
that the engineer is neutral and acts independently of with the parties to the contract about the disputed
the employer and the contractor, as a quasi-mediator2 , issues in order to find a compromise solution and, next,
whose task is to resolve conflicts amicably without the if such a solution is not achievable, to make its own
need for applying any of the other forms of dispute determination, which he believes is fair, just and right in
resolution provided for in the FIDIC conditions of the light of all the relevant facts.
contract3. The reality of carrying out construction investment
The procedure for the engineer to follow in disputes projects revealed many flaws in the above regulation.
was regulated in sub-clause 3.5 [Determinations], which First of all, the assumption of the engineer’s neutrality
has the same wording in both the 1999 Red Book in trying to resolve a conflict between the employer
(“Build”) and Yellow Book (“Design and Build”) of the and the contractor was criticised for being artificial
FIDIC conditions of contract. However, in the 2017 and unfeasible due to the engineer’s contractual or
Red Book and Yellow Book, this regulation has been professional subordination to the employer8. In the
replaced with a much longer sub-clause 3.7 [Agreement opinion of construction work contractors, if the engineer
or Determination], which introduces a number of changes acts on behalf of the employer, carries out its orders, is
intended to enhance the position of the engineer as an liable towards it and receives remuneration from it, it
arbitrator and mediator. The procedure laid down in is impossible that in the event of a dispute the engineer
sub-clause 3.7 is of great significance – FIDIC refers to will come out on the side of the contractor against the
its application in as many as 25 cases4,including cases employer.

1
S ub-clause 3.2 of the 2017 FIDIC Red Book and Yellow Book: “Except as otherwise stated in the Conditions, whenever carrying out duties or exercising authority, specified in or implied by the Contract,
the Engineer shall act as a skilled professional and shall be deemed to act for the Employer.”.
2
Cf. Daniel Alcon, FIDIC Sub-Clause 3.5 [Determinations] Explained, published online at the FIDIC official website at http://fidic.org/content/fidic-sub-clause-35-determinations-explained-dalcon, p. 7.
3
Clause 21 [Dispute and Arbitration] the 2017 FIDIC Red Book and Yellow Book.
4
Cf. Daniel Alcon, FIDIC Sub-Clause 3.5…, p. 3-4.
5
S ub-clause 20.1 of the 2017 FIDIC Red Book and Yellow Book.
6
S ub-clause 15.3 of the 2017 FIDIC Red Book and Yellow Book.
7
S ub-clause 3.5 of the 1999 FIDIC Red Book and Yellow Book: “Whenever these Conditions provide that the Employer shall proceed in accordance with this Sub-Clause 3.5 to agree or determine any
matter, the Engineer shall consult with each Party in an endeavour to reach agreement. If agreement is not achieved, the Engineer shall make a fair determination in accordance with the Contract, taking
due regard of all relevant circumstances. (…)”.
8
Cf. Issaka Ndekugri, Nigel Smith, Will Hughes, The engineer under FIDIC’s conditions of contract for construction, Construction Management and Economics, July 2007, p. 792.

14  | The New FIDIC Conditions of Contract (2017) from the Polish Perspective
The way in which the 1999 FIDIC functioned also showed was expressed in just four sentences, has been replaced
that sub-clause 3.5 contained some loopholes. The with a much more detailed sub-clause 3.7, which is more
1999 FIDIC books did not forbid making the exercising than two pages long. As this paper is a brief presentation
of the engineer’s powers under the abovementioned of the subject-matter, only the most important changes
sub-clause dependent on the employer’s consent. introduced by sub-clause 3.7 will be reviewed.
For this reason, bearing in mind the significance of the
In discussing the proposed changes, the first thing that
engineer’s determinations, many employers inserted into
attracts our attention is the introduction of a principle
contracts the requirement for the engineer to obtain
according to which the engineer has to perform the
the employer’s consent before making agreements or
duties arising from the regulation in question “neutrally” 9,
determinations in the event of a dispute. As a result, such
but at the same time the regulation retains a provision
contractual provisions made the method of resolving
saying that the engineer has a duty to make “fair”
disputes dependent on the employer’s will and helped
determinations. Should the concept of “neutrality” be
to eliminate the engineer from the process, which
understood in the same way as “impartiality”? Although
completely distorted the sense of the institution of
sub-clause 3.5 did not expressly provide for the principle
determination set out in sub-clause 3.5.
of the engineer’s impartiality in resolving disputes
Another defect in sub-clause 3.5 indicated in legal between the employer and the contractor, the duty
literature was an insufficient differentiation between of the engineer to observe impartiality in the course
the agreement phase and the determination phase. of making agreements and determinations did not
For this reason, the engineer, who seemingly consulted raise any doubts due to the necessity of making “fair”
the parties to reach an agreement, in fact made its own determinations10. Therefore, since it has been decided to
determinations and developed its own resolution to a introduce an additional term defining the way in which
particular dispute. the engineer is to act in exercising its powers under
sub-clause 3.7, despite the express duty of the engineer
It is evident from the above that many practical problems
to give a “fair” determination, one may assume that the
occurred in relation to sub-clause 3.5, as a result of
previous meaning and the new meaning of that sub-clause
which the parties did not think it justifiable to insert it
differ.
into construction contracts without making appropriate
modifications. However, this conclusion is not confirmed by
the linguistic construction of the concepts under
SUB-CLAUSE 3.7 [AGREEMENT OR consideration. As stated in the PWN dictionary of Polish
DETERMINATION] – REVIEW OF THE language, a person who is “impartial”11 is a person who
CHANGES “follows the principle of objectivism”12 and objectivism
is understood, in turn, as “presenting and evaluating
The answer in the 2017 FIDIC contract templates to something in a way that conforms to the facts, regardless
the practical problems connected with the application of his own opinions, feelings and interests”. And the term
of sub-clause 3.5 [Determinations] is to be sub-clause 3.7 “neutral13” is applied to a person “who does not declare for
[Agreement and Determination]. The authors of the new any of the parties to a dispute “. Both terms under analysis
edition of the FIDIC conditions of contract approached are treated as synonyms14.
the task very seriously: the concise sub-clause 3.5, which
9
Sub-clause 3.7 of the 2017 FIDIC Red Book and Yellow Book: “The Engineer shall act neutrally between the Parties when carrying out his duties under this Sub-Clause. (…)”.
10
 It is worth mentioning that the obligation of the engineer to act with impartiality in performing its duties relating to the determination of disputes between the parties to a contract was stated
expressis verbis in the FIDIC Conditions of Contracts for Works of Civil Engineering Construction from 1987. In the 1999 Red Book and Yellow Book of the FIDIC conditions of contract, this
principle was not expressly stated, but the obligation to make fair determinations was introduced. In legal literature, the foregoing regulation was criticised on the grounds that, in effect, the 1999
FIDIC defined only the criteria which the engineer’s decision as such must meet, but did not provide for any conditions that the process of taking such decision should meet. However, contractual
practice developed the principle of the engineer’s impartiality in the course of exercising its powers under sub-clause 3.5, stating that without observing impartiality towards the parties to a
contract the engineer’s decision may be unfair. Cf. Issaka Ndekugri, Nigel Smith, Will Hughes, The engineer under FIDIC’s conditions (…), p. 795.
11
 The PWN dictionary of Polish language is available online at https://sjp.pwn.pl/; the term “bezstronny” (“impartial”) is available at https://sjp.pwn.pl/szukaj/bezstronny.html
12
  The PWN dictionary of Polish language is available online at https://sjp.pwn.pl/; the term “obiektywizm” (“objectivism”) is available at https://sjp.pwn.pl/szukaj/obiektywizm.html
13
  The PWN dictionary of Polish language is available online at https://sjp.pwn.pl/; the term “neutralny” (“neutral”) is available at https://sjp.pwn.pl/szukaj/neutralny.html
14
Dictionary of Synonyms.

www.dlapiper.com  |  15
Also, an analysis of sub-clause 3.7 leads to the conclusion POLISH PRACTICE
that the procedures for making agreements and
As a rule, public employers that conduct big and
determinations have been formalised and confined
important infrastructural investment projects make many
to strictly specified time frames. There is a clear
modifications to FIDIC’s standard conditions of contract,
differentiation in sub-clause 3.7 between the phase
most often deleting multi-step clauses contained therein.
of making agreements and the phase of making
However, sub-clause 3.5 is an exception. By way of
determinations15, introducing time limits in which the
example, in their contract templates that were in effect
contract engineer has to carry out consecutive activities.
until 2017, both GDDKiA 20 and PKP PLK 21 did not
In particular, sub-clause 3.7 expressly stipulates what
modify that clause at all – or only introduced technical
specific conditions must occur and what deadlines must
amendments, such as the possibility for the employer
expire in order for the contract engineer to be able to
and the contractor to carry out consultations in writing.
recognize that an agreement between the parties to a
At the same time, in many situations, both GDDKiA and
contract cannot be reached and that it may proceed to
PKP PLK required that the engineer obtain the prior
the phase of making determinations16. And if the engineer
consent of the employer to perform its duties defined in
does not meet the obligation of making a determination
sub-clause 3.5. The FIDIC-based templates of contracts
within the prescribed time limit, the matter or claim is
currently used by the abovementioned entities are still
deemed to be dismissed17. The engineer’s determination
based on sub-clause 3.5 of the 1999 FIDIC Red Book
is binding on the parties until it is challenged in the
and Yellow Book and they apply it in the same way, i.e.
procedure set forth in Clause 20.1 [Disputes and
without modification but, in specific cases, with the
Arbitration]18.
requirement that the engineer obtain additional consent
Finally, another change concerning the principles of how of the employer permitting it to make agreements and
the engineer makes agreements and determinations has determinations.
been introduced in sub-clause 3.2 [Engineer’s Duties and
Authority]. Under this sub-clause, it is forbidden to make EVALUATION OF THE REGULATION
the fulfilment of the engineer’s duties under sub-clause
3.7 dependent on obtaining the prior consent of the Sub-clause 3.7 of the 2017 FIDIC conditions of contract
employer19. introduces many significant changes in relation to sub-
clause 3.5 of the 1999 FIDIC conditions of contract.
The question then arises of how the above-described With regard to the criticisms raised in respect of sub-
modifications in the FIDIC templates should be clause 3.5, it must be stated that sub-clause 3.7 clarifies
evaluated. Is it possible that the proposed changes many of the issues and puts them in order. In particular,
will be introduced into the templates of contracts for the authors of the 2017 FIDIC conditions of contract
“Build” and “Design and Build” infrastructural investment took into consideration the requests of representatives
projects in Poland? Or have these solutions already been of the construction sector to distinctly separate the
implemented by Polish entities? procedures for agreements and determinations and
to formalise them in such a way that none of them
is omitted, and to introduce a ban on making the
exercise of the engineer’s powers under the sub-clause

15
 T his can be seen, for instance, in the change of the heading of the sub-clause from “Determinations” to “Agreement or Determination” and in the introduction of separate paragraphs regulating the
process of agreement and the process of determination, respectively.
16
 Sub-clause 3.7.1 [Consultation to reach agreement] of the 2017 FIDIC Red Book and Yellow Book : “(…) The Engineer shall proceed under Sub-Clause 3.7.2 [Engineer’s Determination] if: (a) no agreement
is achieved within the first time limit stated in Sub-Clause 3.7.3 [Time limits]; or (b) both Parties advise the Engineer that no agreement can be achieved within this time limit whichever is the earlier.”.
17
  Sub-clause 3.7.3 of the 2017 FIDIC Red Book and Yellow Book.
18
  Sub-clause 3.7.4 of the 2017 FIDIC Red Book and Yellow Book.
19
 S ub-clause 3.2 of the 2017 FIDIC Red Book and Yellow Book: “(…) There shall be no requirement for the Engineer to obtain the Employer’s consent before the Engineer exercises his authority under
Sub-Clause 3.7 [Agreement or Determination]. The Employer shall not impose further constraints on the Engineer’s authority. (…)”.
20
  Generalna Dyrekcja Dróg Krajowych i Autostrad (General Directorship of National Roads and Motorways).
21
Polskie Koleje Państwowe Polskie Linie Kolejowe S.A. (Polish State Railways Polish Rail Lines S.A.)

16  | The New FIDIC Conditions of Contract (2017) from the Polish Perspective
in question dependent on the prior consent of the The direction of the changes is, undoubtedly, desirable.
employer. They also underlined that the engineer has a However, the question remains as to whether these
duty to be impartial towards the parties to a contract modifications can actually finally eliminate the argument
in the course of making agreements and determinations, raised by contractors that the engineer’s relationship
introducing the principle of the engineer’s neutrality. with the employer means that it has a conflict of interest
when making agreements and determinations.
In the light of the presented modifications, it must be
stated that the role of the contract engineer in resolving
conflicts between the employer and the contractor
is increasing in significance. All the above-mentioned
solutions are undoubtedly intended to guarantee the
engineer’s autonomy in relation to the parties to a
contract in the course of resolving disputes between
them, and to achieve this end, the position of the
contract engineer as a mediator in disputes has also been
strengthened.

www.dlapiper.com  |  17
A TAKING-OVER CERTIFICATE AS A
DOCUMENT CONFIRMING THE COMPLETION
OF WORKS

18  |  Nowe warunki kontraktowe FIDIC z 2017 roku z perspektywy polskiej

 ANNA KOPANIA, DLA PIPER

The taking-over of works constitutes one of the key
phases of the performance of a construction project
because it confirms that the contractor has substantially
completed the works, which in turn leads to the handing
over of responsibility for the care of the performed
works, marks the beginning of the defects notification
period, allows for a partial release of the security, and
causes that the contractor’s liability for delay damages
ceases or can be reduced.
The taking-over provisions have not been significantly
modified in the new edition of the FIDIC conditions
of contract, both in the so-called FIDIC Red Book
and FIDIC Yellow Book. The 2017 edition mainly puts
in order and explains in greater detail the existing
provisions, improving their clarity and simplifying
the application of the conditions of contract. The
limited scope of changes also means that the way
of understanding the 1999 edition and the practice
developed on the basis thereof remain largely valid for
the new FIDIC edition. Therefore, it can be expected
that the current jurisprudence of Polish courts and other
adjudicative bodies will, to a large extent, determine the
interpretation of the new FIDIC conditions of contract
in respect of taking-over in construction projects carried
out under Polish law.
THE TAKING-OVER PROVISIONS IN FIDIC 2017
CONDITIONS OF CONTRACT – AN OVERVIEW OF
THE CHANGES
In the new edition of the FIDIC conditions of contract
the distinction between the taking-over of works
or sections (sub-clause 10.1) and the taking-over of
parts of works (sub-clause 10.2) has been retained,
the only difference being that the term “part” has
become a defined term1. The amendments made refer
mainly to formal issues. They introduce or modify the
requirements relating to the actions of participants in a
construction process in respect of the taking-over stage.
According to the new sub-clause 10.1, the principal
conditions for taking-over remain: the completion
of works in accordance with the contract (with the
exception of any outstanding minor work or defects),
the passing of the tests on completion, and the issuance
of a taking-over certificate. However, this sub-clause
has been expanded and now also includes conditions
of taking-over that were previously found in separate
clauses. Thereby, multi-level references to other
conditions of contract have been eliminated, which
undoubtedly facilitates the use of the new FIDIC edition2 .
Currently, sub-clause 10.1 clearly shows that the
conditions necessary for the taking-over of works are the
submission of the as-built records and the operation and
maintenance manuals, and the carrying out of training for
the employer’s personnel (if it was planned). Additional
condition is that the works may be taken over if the
engineer provides a so-called notice of no-objection to
the as-built records and the operation and maintenance
manuals (or if such a notice is deemed to have been
issued3). The lack of a notice of no-objection will not only
impede the actual issuance of a taking-over certificate by
the engineer, but also prevent the recognition that such
a certificate can be deemed as issued as a result of the
engineer’s failure to respond in time to the request for
its issuance. This change is a manifestation of a greater
formality in the construction process and stresses the
importance of the contractor’s preparing documents in
an accurate and timely manner. On the other hand, it also
confirms the need for the engineer to take monitoring
actions on an ongoing basis.
As regards the modifications concerning the deemed
issuance of a taking-over certificate (last paragraph of
sub-clause 10.1), it is worth pointing out that the deadline
after which the certificate is deemed to have been issued
has been shortened. Currently, if the 28-day time limit
for the issuance of a certificate expires without effect
(as a result of the engineer’s failure to respond to the

1
 oth in the FIDIC Red Book (sub-clause 1.1.58), and the FIDIC Yellow Book (sub-clause 1.1.58) a “Part” is defined as a part of the Works or Section, used by the Employer and recognised as having
B
been taken over on the basis of sub-clause 10.2 [Taking Over of Parts of the Works].
2
 Sub-clause 10.1 in the 1999 editions refers to sub-clause 8.2, which contains further reference to sub-clause 4.1 (d) concerning as-built documentation and the operation and maintenance manual
(the FIDIC Red Book) or to sub-clauses 5.5, 5.6 and 5.7 (the FIDIC Yellow Book) concerning, respectively, the training for the employer’s personnel, the as-built records, and the operation and
maintenance manuals.
3
 The procedure of giving notices of no-objection is regulated in sub-clause 5.2.2 (the FIDIC 2017 Yellow Book) and 4.4.1 (the FIDIC 2017 Red Book).

www.dlapiper.com  |  19
contractor’s request), the certificate is deemed to have
been issued on the 14th day of this period and not on the
last day (as was the case hitherto).
Changes related to contractual deadlines have also been
introduced to sub-clause 10.3. Under this modified sub-
clause, a delay of more than 14 days that prevents the
contractor from carrying out the tests on completion
can be calculated as one continuous period or the sum
of different periods which total more than 14 days.
In addition, the list of causes of delays resulting in
works being deemed as taken-over on the date when
the tests on completion would have been completed
but for the delay has been extended. In the new FIDIC
edition it is expressly stated that this sub-clause refers
to a delay by the employer’s personnel or by a cause
for which the employer is responsible. The new FIDIC
Yellow Book also adds that the list includes situations
where the performance test is not possible “due to
available operating conditions during trial operations”.
The intention of introducing this last point is not quite
clear; however, it seems to include situations in which
the carrying out of the final tests is not possible due to,
among other things, weather conditions.
In discussing the new shape of the conditions of contract
that relate to the taking-over of works, it is also worth
noting the aspects of the regulations that have not
changed. A source of numerous disputes relating to the
taking-over of works is the assessment of the scope of
outstanding works or defects that do not substantially
affect the use of the works for their intended purpose.
The new FIDIC conditions of contract have not
introduced a more precise definition of the concept
of “minor outstanding works and defects” that do not
prevent the taking-over of works. It has been added
that despite such outstanding works and defects, the
use (of the works or sections) by the employer should
be “safe”; however, this does not seem to constitute
a significant change. The provisions of the 1999 FIDIC
conditions of contract also give grounds for assuming
that in the previous wording of sub-clause 10.1 (a) it
was also required that the works should be performed
4
  Both in the FIDIC Red Book and FIDIC Yellow Book. In this regard, sub-clause 11.9 has not been changed in the new conditions of contract.
5 
As in the case of contracts performed under German law, see: Axel-Volkmar Jaeger, Götz-Sebastian Hök, FIDIC – A Guide for Practitioners, published in 2009, p.. 32 and next.
20  | The New FIDIC Conditions of Contract (2017) from the Polish Perspective
in such a manner as to ensure their safe use. However,
it is possible that the above-mentioned modification
will constitute the basis for taking a more restrictive
approach to assessing the conditions of taking-over.
Furthermore, there are no additional indications in sub-
clause 10.2 as to what use of the works by the employer
may not be recognised as temporary use, which means
that this issue has been left for the parties to regulate.
The so-called FIDIC golden principles, developed at
the same time as the new conditions of contract by
a special Task Group appointed by the International
Federation of Consulting Engineers, may be regarded as
a kind of limitation of the parties’ freedom in this regard.
According to one of the FIDIC golden principles, it is not
permitted to set special conditions that would change
the allocation of benefits and risks provided for in the
general conditions.
TAKING-OVER PROVISIONS FROM THE
PERSPECTIVE OF POLISH LAW
In construction projects performed under Polish law,
there are often disputes between the parties related
to the taking-over of works. Some problems arise as a
result of the fact that the FIDIC conditions of contract
originate from the common law system and therefore
the concept of taking-over differs from the concept
of acceptance known in the continental law system4,
including Polish law.
This gives rise to doubts concerning the relationship
between the taking-over certificate and the final
acceptance protocol, the latter being adopted in Poland
as the document stating that works have been performed
in accordance with good construction practices. The
reason for the difficulty in defining the relationship
between the two documents may be, among others, the
wording of sub-clause 11.9 of the FIDIC conditions of
contract5, under which the contractor’s obligations will
not be recognised as fulfilled until the engineer issues
the performance certificate. Based on the wording of
the above sub-clause, the performance certificate is the
only document which confirms that all the contractor’s
documentation has been delivered to the engineer
and that all the works have been completed (including
the rectification of all defects, which is an element
of the performance of the contractor’s obligations).
In consequence, the above could lead to the conclusion
that the issuance of the taking-over certificate does not
constitute a sufficient basis for declaring that the works
have been properly completed (and cannot be deemed
as an equivalent to the final acceptance protocol), but
it only marks the beginning of another phase of the
realisation of the construction project (i.e. the defects
notification period), after which the performance can be
confirmed.
However, the prevailing position adopted by Polish
courts and by legal practitioners is not so restrictive.
It is underlined that sub-clause 10.1 shows that the
purpose of the taking-over certificate is to confirm that
the works have been completed in accordance with
the contract. It is also indicated that the taking-over
certificate has a character of acceptance, and therefore
if the defects found prevent the use of the works for
their intended purpose, then it is justifiable to reject
a request for the issuing of a taking-over certificate. A
taking-over certificate and an acceptance protocol are
also said to have the following similar features: they
enable the investor to take possession of the subject of
acceptance and use it in accordance with its intended
purpose, they both confirm the submission of the as-built
documentation and the successful completion of the
works, and they cause that the claim for remuneration
becomes due and payable.
According to the position presented by the National
Chamber of Appeals (KIO), the taking-over certificate
may be recognised as a document that confirms the
completion of the works and is the equivalent of
the acceptance protocol, if the parties have decided,
applying the freedom of contract principle expressed in
Art. 3531 of the Civil Code, that the stage of performing
minor outstanding works and removing minor defects
should be included in the period for the notification
of defects and if the parties have recognised that
such outstanding works and defects do not prevent
the acceptance of a facility for use and the payment
of remuneration6. This approach has been adopted
many times in proceedings before the KIO in which
an assessment has been made as to whether a taking-
over certificate can be deemed to be a document
confirming the expertise and experience of a contractor
bidding for a contract7. The same position has also been
confirmed in the judgement of the Supreme Court
of 13 September 20178 in which the completion of a
contract and the extent of the parties’ claims were
assessed. In substantiating its position, the Supreme
Court stated that the date for the completion of works
is indicated in the taking-over certificate and only
minor outstanding works are performed in the defects
notification period. The Supreme Court also indicated
that although it is the performance certificate that finally
confirms the acceptance of works as being properly
performed, this performance certificate, first of all,
refers to the events pertaining to the defects notification
period.
The above judgments do not give grounds for recognising
that in every case where works are realised based on
FIDIC conditions of contract, the taking-over certificate
must be recognised as being equivalent to the works
acceptance protocol. The decisive factor here is the
principle of the freedom of contract and the agreements
between the parties. Thus, if the parties wish to avoid
any doubts, it is advisable to add certain clauses to
the contract stipulating, among other things, that the
taking-over certificate has to be prepared in accordance
with the principles governing the issuance of works
acceptance protocols. This also applies to contracts that
will be concluded pursuant to the new FIDIC conditions
of contract, because in the 2017 FIDIC edition the
essence of the taking-over provisions remains unchanged.

6 
Judgment of the National Chamber of Appeals of 27 July 2011, KIO 1507/11; Judgment of the National Chamber of Appeals of 24 May 2016, KIO 782/16;
7
 This subject-matter is currently regulated in § 2, section 4, point 1 of the Ordinance of the President of the Council of Ministers of 26 July 2016 on the types of documents that the employer may
request from the contractor in the matters of awarding procurement contracts: to prove that they meet the conditions or criteria related to technical or professional capability, contractors have to
submit documents showing that works were performed duly, among others – in accordance with the provisions of building law, and completed properly.
8
Judgement of the Supreme Court of 13 September 2017, IV CSK 578/16.

www.dlapiper.com  |  21
22  | The New FIDIC Conditions of Contract (2017) from the Polish Perspective
THE OBLIGATION TO KEEP CONTEMPORARY
RECORDS – THE FIDIC YELLOW BOOK AND RED
BOOK 1999 AND 2017

www.dlapiper.com  |  23
 SZYMON SAKOWSKI, DLA PIPER

INTRODUCTION Neither the Polish nor the English language version of

the FIDIC Yellow Book and Red Book 1999 accurately
Infrastructure investments carried out on the basis of
defines what is meant by saying that records must
the FIDIC conditions of contract often last several years,
be kept contemporarily. In foreign jurisprudence2 ,
consist of many stages, and involve many entities in their
an interpretation has been presented according to
implementation. For this reason, with the passing of
which contemporary records are source documents
time, it is difficult to reconstruct certain events. Also,
or copies thereof, prepared on an ongoing basis or
the evidence that a party to a contract may need to
without delay, constituting the grounds for filing a
collect in order to effectively pursue its claim may be
claim. Moreover, it has been underlined, for instance,
hard to obtain. This potential problem was noticed by
that witness testimonies prepared in writing after the
the creators of the FIDIC Yellow Book and Red Book,
lapse of a period of time following the occurrence of
who imposed an obligation on contractors to keep
the circumstances giving rise to a claim may not be a
contemporary records of events that may be relevant
substitute for contemporary records.
in the course of a potential dispute. In the 2017 FIDIC
Books, the duty to keep contemporary records is In this way, a number of doubts appeared around the
regulated in clause 20, which applies both to the claims concept of contemporary records that may hinder the use
of the contractor and of the employer. As a result, the of this institution. The latest version of the Yellow Book
employer will also have to keep contemporary records, and the Red Book resolves some of them. According to
which will constitute the principal material confirming sub-clause 20.2.3, contemporary records means records
the circumstances described in any submitted claims. that are prepared or generated at the same time, or
immediately after, the event or circumstance giving
DEFINITION OF CONTEMPORARY RECORDS rise to the claim. Thus, the adopted definition is largely
similar to that presented earlier in jurisprudence.
The concept of contemporary records in the FIDIC Yellow
Book and Red Book 1999 has been translated into
THE DUTY TO KEEP CONTEMPORARY
Polish as “bieżące zapisy” (“current records”). As the legal
RECORDS
literature relating to this issue1 indicates, the following
are recognised as examples of contemporary records: The contractor’s duty to keep contemporary records
entries in the construction log, records of surveys stems directly from the function of such records, which
or inspections, complaint/guarantee notifications and is to document a submitted claim. It is, first of all, in
protocols, invoices or other confirmations of incurred the interest of the party that has a claim to properly
costs, notes from meetings, and external and internal keep contemporary records. Yet, it must be underlined
correspondence (in both electronic form and hard that clause 20 of the Yellow Book and the Red Book
copies). Given such an interpretation of contemporary of the 2017 FIDIC does not apply to the contractor’s
records, the Polish translation of the concept does not claims only, but also to the employer’s claims. As a
seem to fully render the meaning attributed to it by the consequence, the duties relating to the keeping of
creators of the FIDIC conditions of contract. Moreover, contemporary records will apply both to the contractor
the Polish translation may misleadingly suggest that only and the employer.
current entries in the construction log or in monthly
construction reports should be kept.

1
 Jane Jenkins, International Construction Arbitration Law. Second revised edition., Kluwer Law International BV, 2014, s. 95; J. Al-Dine Nassar, Claims, disputes and arbitration by virtue of the “Conditions
of Contract for Works of Civil Engineering Construction (Red Book)”, Fourth Edition, 1987; and the “Contract for Construction (New Red Book)”, First Edition, 1999. Issued by the International Federation of
Consulting Engineers “FIDIC”, International Journal of Arab Arbitration 2009, Vol. 1, Nr 1, pp. 95 – 132; D. Chappell, Building Contract Claims, Blackwell Publishing, edition 5, point 10.2.1.
2
 Judgement of the Supreme Court for the Falklands of 14 March 2003, in the case: Attorney General for the Falkland Islands v Gordon Forbes Construction (Falklands) Limited.

24  | The New FIDIC Conditions of Contract (2017) from the Polish Perspective
Pursuant to sub-clause 20.1 of the FIDIC 1999, the
contractor has to keep contemporary records in
the manner that is necessary to substantiate claims
submitted on the basis of that sub-clause. These records
should be prepared and kept at the construction site
or at another place agreed with the engineer. Finally,
the engineer may, without recognising the employer’s
liability, after receiving a notice of a claim, monitor the
contractor’s keeping of such records and instruct the
contractor to keep additional contemporary records.
At the same time, the contractor has to give the engineer
access to all contemporary records and, if required,
submit copies of such records to him.
In the 2017 FIDIC, the duties related to the keeping of
contemporary records and the corresponding powers
of the engineer remain, to a large extent, unchanged.
One provision has been added, according to which
the engineer may inspect the records kept only during
normal working hours, if not agreed otherwise. Also,
such an inspection or instructions given by the engineer
concerning the records kept do not mean that the
engineer has accepted the records in terms of their
accuracy or completeness.
The duty to make contemporary records when the
parties enter into a contract based on the FIDIC
constitutes a contractual obligation. Non-observance of
the obligation may have serious consequences for the
claimant in the proceedings determining the justifiability
of the claim. The remarks below apply, in particular,
to proceedings before dispute adjudication boards or
a court of arbitration, in which adjudicating panels pay
great attention to the intent of the parties expressed in
the concluded contract.
It is evident from the unequivocal FIDIC conditions of
contract that a party may not draw up documentation
at a later time specifically for the purpose of a dispute
or substitute the records with other evidence. Such
evidence may only be supplementary. An adjudicating
panel may take the position that the party filing the claim
has not performed its obligation and, as a consequence,
recognise that the claim has not been proved due to the
3
  Judgement of the Supreme Court for the Falklands of 14 March 2003, in the case: Attorney General for the Falkland Islands v Gordon Forbes Construction (Falklands) Limited.
lack of relevant evidence in the form of contemporary
records. A similar position has been expressed in
foreign jurisprudence, according to which the lack of
contemporary records proving the justifiability of a claim
should result in the dismissal of the claim3. Any evidence
from witnesses or written witness testimonies prepared
at a later time may only indicate in what circumstances
and at what time specific contemporary records were
made. For this reason, it is necessary that the party
intending to pursue a claim ensures that the obligation to
keep contemporary records is fulfilled in compliance with
the FIDIC conditions of contract.
THE PURPOSE AND FUNCTION OF
CONTEMPORARY RECORDS
The authors of the FIDIC 1999 conditions of contract
linked contemporary records to the contractor’s claims
submitted on the basis of sub-clause 20.1. On the one
hand, the keeping of such records is meant to help
the contractor in completing relevant documentation
substantiating the pursued claim. On the other hand,
they are meant to provide evidence material to the
engineer, which will allow it to evaluate a submitted claim
as thoroughly and objectively as possible.
As already indicated, sub-clause 20.1 in the FIDIC Yellow
Book and the Red Book 1999 specifies that contemporary
records substantiate submitted claims. In the 2017 FIDIC,
the function and significance of keeping contemporary
records are underlined by indicating in sub-clause 20.2.4
of the FIDIC Yellow Book and Red Book that the party
filing a complete, detailed claim must attach to that claim
all the contemporary records to which it refers.
In addition, the function of contemporary records in the
longer-term perspective should be noted. In the reality
of construction investments, some part of the claims
submitted by one of the parties will remain unsatisfied
until a common court of law or a court of arbitration
issues a final decision. In such an event, the keeping of
contemporary records, also understood as the archiving
www.dlapiper.com  |  25
thereof, considerably facilitates and expedites the work their management as future evidence material in legal
on a possible statement of claim and increases the odds or arbitral proceedings may be of great significance for
of winning the dispute. the effectiveness of a submitted claim or the eventual
winning of a dispute.
SUMMARY
The FIDIC contract templates use the concept of
contemporary records, which constitute the substantiation
of submitted claims. In the 2017 FIDIC Yellow Book
and Red Book, an extended regulation of that concept
has been introduced by adding a definition and putting
the employer and the contractor on an equal footing
as entities obligated to keep contemporary records,
if either of them has a claim against the other. The
proper keeping of records on an ongoing basis and

26  | The New FIDIC Conditions of Contract (2017) from the Polish Perspective
UNILATERAL DISSOLUTION OF A CONTRACT
FOR BUILDING WORKS BASED ON THE 1999
AND 2017 VERSIONS OF THE FIDIC TEMPLATE
(FIDIC SUB-CLAUSES 15.2 AND 16.2 IN THE
LIGHT OF POLISH LAW)

www.dlapiper.com  |  27
 MIKOŁAJ STROJNOWSKI, DLA PIPER
SUB-CLAUSES 15.2 AND 16.2 IN THE 1999
FIDIC TEMPLATE
Model sub-clauses 15.2 and 16.2 of the FIDIC
Books 1999 (Red and Yellow) relating to the unilateral
termination of a contract were inconsistent with
the Polish legal system. As a result, in the situations
where they had not been appropriately adjusted to the
requirements of the Civil Code, the actions taken on the
basis of those sub-clauses were ineffective. This was a
result of the mechanism of termination used in the FIDIC
template (irrespective of the Polish translation of the
English term termination), because under Polish law, the
only proper way to unilaterally dissolve a contract for
building works is rescission1.
In the light of the mandatory provisions of the Civil
Code, the effective rescission of a contract is subject to
specific requirements. If a rescission is to be based on a
provision of a contract, it is necessary to insert in that
provision the deadline for the exercising of that right
(Art. 395 § 1 of the Civil Code). The lack of this element
automatically results in the invalidity of the provision2 .
This was the case with model sub-clauses 15.2 and
16.2 of the 1999 FIDIC.
In court decisions where the 1999 FIDIC sub-clauses
15.2 or 16.2 were found to be invalid, the courts often
recognised a party’s declaration based on one of them
as its intention to rescind a contract on the basis of the
provisions of the Civil Code. Such an interpretation
could lead to having the rescission recognised as
effective, but only when statutory requirements have
been met – in particular those set out in Art. 636 § 1 of
the Civil Code in conjunction with Art. 656 § 1 of the
Civil Code or Art. 491 § 1 of the Civil Code3. It should
be remembered that rescission on the basis of the
above-mentioned provisions is effective only if, prior to
that, the other party is called upon to correct, on pain
of rescission, the way in which it performs the contract
and if an adequate deadline is set for that party to do
so. Therefore, the circumstances of a given case were
1
This is directly evident from the provisions of Art. 649(2) § 2 of the Civil Code, Art. 649(4) § 1 of the Civil Code, Art. 656 § 1 of the Civil Code, and Art. 657 of the Civil Code.
2
E.g. the judgment of the Supreme Court of 11 August 2005, V CK 86/05, Lex no. 371463.
3
Judgment of the Court of Appeal in Wrocław of 28 September 2016, I ACa 907/16, unpublished.
4
Judgment of the Regional Court in Warsaw of 20 July 2016, XXV C 1492/14, the Portal dedicated to decisions of common courts.
28  | The New FIDIC Conditions of Contract (2017) from the Polish Perspective
decisive in assessing whether the party properly called
upon its contractor, before submitting a declaration of
rescission, to comply with the contract and whether the
deadline was appropriate.
As an alternative, in the event of the invalidity of sub-
clause 15.2 of the 1999 FIDIC template, the provision of
Art. 635 of the Civil Code in conjunction with Art. 656
§ 1 of the Civil Code was also submitted to the courts
for consideration. This provision establishes a right for
the investor to rescind a contract if the contractor is late
in commencing or completing the works to the extent
that makes it unlikely that they will be completed by the
agreed time4.
SUB-CLAUSES 15.2 AND 16.2 IN THE 2017
FIDIC TEMPLATE
In the latest version of the FIDIC template from 2017,
sub-clauses 15.2 and 16.2 are still inconsistent with
Polish law, and specifically with Art. 395 § 1 of the Civil
Code. In order to make these provisions effective, it
is necessary for the parties to specify the deadline for
exercising the rescission right. If the parties do not do
so, the sub-clause may be declared invalid.
Courts may try to classify the investor’s actions taken on
the basis of the non-modified sub-clause 15.2 as statutory
rescission, but – as in the case of the previous FIDIC
version – this will not always be effective. This is because,
despite the fact that in accordance with sub-clause 15.1
in the event of any irregularities the contractor should
be called upon to correct its behaviour by a reasonable
deadline, in the light of the Civil Code the call should be
made by the investor and not by the contract engineer
as stipulated in the model clause. It could be claimed
that the call made by the engineer is actually made on
behalf of the investor; however, this is where the first
element of risk appears (after analysing the specific
legal relationship, the court may consider otherwise). In
turn, the call by the investor related to its intention to
rescind the contract, made in accordance with model
sub-clause 15.2.1, is connected with the requirement to
first call upon the contractor to correct its performance;
however, the deadline of 14 days for the contractor
to remove any irregularities (sub-clause 15.2.2) will be
adequate only in certain situations (and the meeting of
that deadline is an absolute requirement under Art. 636
§ 1 of the Civil Code in conjunction with Art. 656 § 1
of the Civil Code and Art. 491 § 1 of the Civil Code).
An adequate deadline is a deadline by which a particular
action is able to be taken, and therefore everything
depends on the circumstances of the case. If the deadline
is not adequate, then the rescission – as premature – will
not be effective. Moreover, in certain cases, a prior call
under model sub-clause 15.2.1 is not required at all (in
the situations mentioned in points f, g, and h), whereas
the Civil Code does not provide for any exceptions to
the obligation to call upon the contractor in advance to
change the manner of carrying out the contract.
Also, there is an inconsistency between Art. 83 of the
Bankruptcy Law and Art. 225, section 1 and Art. 247 of
the Restructuring Law with sub-clause 15.2.1, point g of
the FIDIC Books 2017 (Red and Yellow) relating to the
prerequisite to create the investor’s right to rescind a
contract in the event any bankruptcy or restructuring
proceedings are conducted against the contractor. Also
in this case, the consequence is the invalidity of the
provision.
The foregoing comments apply accordingly to model
sub-clause 16.2 of the 2017 FIDIC template on the
contractor’s right to dissolve a contract unilaterally. It is
worth adding that owing to the nature of the investor’s
obligations (such as issuing documents and payment),
the setting by the contractor of an additional period
of 14 days, in accordance with sub-clause 16.2.2, for
bringing its performance into compliance with the
requirements of the contract, may more often be an
adequate deadline than in the reverse relationship where
the investor calls upon the contractor to take specific
steps.
CONCLUSIONS
The parties responsible for the content of a contract
should strive to adjust the FIDIC template to the
requirements of Polish law. This applies to sub-clauses
15.2 and 16.2 in the context of Art. 395 § 1 of the Civil
Code. However, if the provisions under consideration
have not been appropriately modified, then, in the
situation where it is necessary to unilaterally break off
the cooperation, the rescission should be based on
statutory grounds, which means that all the requirements
in this regard provided for by the Civil Code must
be met.
www.dlapiper.com  |  29
NOTIFICATION OF CLAIMS – THE DEADLINE
AND THE EFFECTS OF ITS EXPIRY – SOME
CONSIDERATIONS ON THE BASIS OF THE 1999
AND 2017 VERSIONS OF THE FIDIC CONDITIONS
OF CONTRACT

30  |  Nowe warunki kontraktowe FIDIC z 2017 roku z perspektywy polskiej

 MONIKA LESZKO, DLA PIPER

CONTROVERSIES AROUND SUB-CLAUSE LEGAL NATURE OF THE 28-DAY DEADLINE

20.1 OF THE 1997 FIDIC CONDITIONS OF FOR NOTIFYING CLAIMS
CONTRACT
The basic problem for the Polish legal system regarding
In all projects based on FIDIC conditions of contract (not the 28-day deadline for notifying a claim is how sub-
only complex, multi-stage construction processes with clause 20.1 fits in the framework of Polish civil law and
a multi-step management structure), one of the most what the legal nature of this clause is.
controversial stages is the contractor’s notification of
The 28-day deadline from sub-clause 20.1 of the 1999
claims, either for extra money or for extra time.
FIDIC conditions of contract relates only to the notice of
Among many of the issues connected with the procedure a potential claim that may arise in the future and is not a
of notifying claims discussed in the legal doctrine and by deadline for the final notice of a claim and the presenting
state courts, one of the most problematic is that related of the supporting evidence. However, if this deadline
to the setting of a deadline for notifying a claim and expires without any effective action having been taken,
the effects of the expiry thereof. This issue stems from sub-clause 20.1 of the 1999 FIDIC conditions of contract
sub-clause 20.1 of the 1999 FIDIC conditions of contract provides for a drastic consequence, i.e. “the discharge
and the controversy surrounding it remains unresolved from any liability” in connection with the event or the
to date. Although state courts had developed a fairly circumstance giving rise to the claim2 .
definitive position on the invalidity of this provision under
Under Polish law, the 28-day deadline for notifying
Polish law, the Supreme Court issued a decision1 on its
claims is quite clearly classified by Polish legal doctrine3
admissibility, at the same time proposing legal remedies
and state courts4 as a limitation of a claim by “a final
enabling the contractor to effectively pursue a “late”
(preclusive) contractual deadline”. However, contrary to the
claim on the basis of sub-clause 20.1.
English concept5, in Polish practice the problem is seen as
Despite great expectations, the most recent version of related to (as described in sub-clause 20.1 of 1999 FIDIC
the FIDIC conditions of contract from 2017 does not conditions of contract) the effect, i.e. the expiry of the
close the discussion on the admissibility of sub-clause claims. According to the legal doctrine6, in the case of
20.1 and its impact on the employer’s liability. In fact, property claims that are subject to statutory limitation
the introduced modifications (in particular those relating periods, it is inadmissible to set a final contractual
to the same claim notification procedure for both the deadline that causes the expiry of the claims because
employer and the contractor) complicate concepts this breaches the statutory prohibition on shortening
already developed in practice. limitation periods (Article 119 of the Civil Code).
This prohibition constitutes an absolute guarantee for
all of the parties to be able to pursue their claims until
the expiry of the statutory limitation period – which is
three years for enterprises in respect of building work
contracts.

1
Judgement of the Supreme Court of 23 March 2017, case no. V CSK 449/16.
2
A . Szlęzak, Krytycznie o koncepcji umownych terminów zawitych jako naruszających zakaz kontraktowej ingerencji w terminy przedawnienia, Przegląd Prawa Handlowego, December 2017,
p. 22-28.
3
For instance, A. Stangret-Smoczyńska, Umowne terminy zawite, PS 1/ 2011, p. 58-59.
4
For instance, a judgment of the Regional Court in Warsaw of 11 June 2012, case no. XXV C 567/11.
5
A reservation discharging the employer from liability on the condition that the contractor does not give notice of a claim by a relevant deadline (“condition precedent”) is permissible if it stipulates a
specific deadline and a definite effect such as the expiry of the claim, N. Gould, Making claims for time and money – Understanding the impact of notice provisions, www.fenwickelliott.co.uk.
6
Cf. A. Stangret-Smoczyńska, Umowne terminy zawite, Przegląd Sądowy, January 2011, p. 59; P. Drapała, Commentary to Art. 647 of the Civil Code [in]: Kodeks cywilny. Komentarz. Tom IV.
Zobowiązania. Część szczegółowa, (ed.) J. Gudowski, 2nd edition. Wolters Kluwer Polska, 2017, LEX.

www.dlapiper.com  |  31
THE EFFECTS OF THE FAILURE TO
COMPLY WITH THE 28-DAY DEADLINE FOR
NOTIFYING CLAIMS
Given the above standpoint expressed in the legal
doctrine, a problem appeared under Polish law
concerning the effects of the contractor’s failure to
comply with the 28-day deadline for notifying claims
under sub-clause 20.1 of the 1999 FIDIC conditions of
contract. Two opposing standpoints were presented by
Polish state courts.
The prevailing view developed by Polish state courts7
(at least until 2017 when the Supreme Court issued a
judgment in case no. V CSK 449/16) is the standpoint
based on the impermissibility of setting a final deadline
that causes the expiry of a claim before the lapse of
its limitation period. In cases in which state courts
recognised that the contractor had actually missed
the 28-day deadline for notifying its claims, they
usually recognised sub-clause 20.1 as invalid on the
basis of Article 119 in conjunction with Article 3531 in
conjunction with Article 58 § 1 of the Civil Code and, as
a result, recognised that the employer’s rejection of such
a claim was groundless.
As an argument in favour of that standpoint, the state
courts indicated – among other things – that the claims
would expire if the relatively short deadline for notifying
them was not met. As a consequence, in many cases,
such claims would expire before the occurrence of other
circumstances resulting in the occurrence of claims. For
example, such a scenario might occur when a claim for
additional payment expires (due to sub-clause 20.1 of the
1999 FIDIC conditions of contract) before the contractor
incurs the additional costs justifying the claim8. Further,
the state courts indicated that the time limit for notifying
claims was reserved only for the contractor, which is
contrary to the principle of freedom of contract (Article
3531 of the Civil Code) and the principle of equivalence
of performances (Article 487 § 2 of the Civil Code), and
that therefore Article 58 § 2 of the Civil Code could be
applied accordingly9.
The other standpoint of the judicature was based on
the position in the legal doctrine that the setting of a
final contractual deadline is, in principle, permissible on
the grounds of the freedom of contract (Article 3531
of the Civil Code)10. A judgment of the Supreme Court
concerning deduction was indicated as an argument
in support of that standpoint11. As a result, further
judgments were issued which permitted the employer
to reject a claim if the deadline for notifying claims
was missed. The courts indicated that such setting of
a deadline was not contrary to Article 119 of the Civil
Code because the effects and functions of final deadlines
and limitation periods are different12 .
THE JUDGMENT OF THE SUPREME COURT
OF 23 MARCH 2017, CASE NO. V CSK 449/16
Taking the above into consideration, the first13 conclusion
of the Supreme Court in a case concerning additional
payments under a building works contract based on
the 1999 FIDIC conditions of contract (case no. V
CSK 449/16) came as a surprise. Despite the different
standpoints of the state courts of the first and second
instances, on 23 March 2017 the Supreme Court issued
a judgement14 in which it recognised that in the contract
based on the 1999 FIDIC conditions of contract, the
parties to the dispute were entitled to insert sub-clause
20.1 containing a final contractual deadline for the
contractor to perform an act of diligence by notifying the
employer of the circumstances justifying the demand for
the remuneration for additional work, on pain of losing
that right in the event of non-compliance.
However, this controversial judgement, even after the
seemingly well-established line of decisions taken by state
courts, did not end all discussions about the effects of

7
 f., for instance, the judgment of the Regional Court in Warsaw of 11 June 2012, case no. XXV C 567/11; the judgment of the Regional Court in Warsaw of 11 July 2012, case no. XXV C 647/11; the
C
judgment of the Regional Court in Gdańsk of 17 December 2013, case no. XV C 1956/12; the judgment of the Court of Appeal in Warsaw of 29 April 2013, case no. VI ACa 1183/12; the judgment
of the Court of Appeal in Warsaw of 20 March 2013, case no. VI ACa 1315/12; the judgment of the Court of Appeal in Gdańsk of 23 July 2014, case no. I ACa 238/14; the judgment of the Regional
Court in Gdańsk of 17 December 2013, case no. XV C 1956/12.
8
The judgment of the Court of Appeal in Warsaw of 14 March 2013, case no. VI ACa 1151/12.
9
The judgment of the Court of Appeal in Warsaw of 4 July 2016, case no. VI ACa 569/15.
10
B . Kordasiewicz [in:] (ed.) Z. Radwański, System Prawa Prywatnego, vol. 2, Prawo cywilne – część ogólna, Warsaw 2008, p. 697; A. Stangret-Smoczyńska, Umowne terminy zawite, PS 2011/1, p. 54 and
next; R. Strugała, Umowne terminy zawite – kwalifikacja prawna oraz dopuszczalność ich stosowania, PPH 2016/3, p. 46 and next.
11
T he resolution of the Supreme Court of 22 June 2016, case no. III CZP 19/16; a critical gloss: A. Szlęzak, Glosa to the Supreme Court’s judgement of 22 June 2016, case no. III CZP 19/16, OSP
10/17, p. 3-12.
12
For instance, the judgment of the Regional Court in Warsaw of 30 April 2013, case no. XXV C 355/10.
13
T he judgment of the Supreme Court of 19 March 2015, case no. IV CSK 443/14 concerned the issue connected with the non-carrying out of a pre-court procedure before the arbitration board.
14
Judgment of the Supreme Court of 23 March 2017, case no. V CSK 449/16.

32  | The New FIDIC Conditions of Contract (2017) from the Polish Perspective
non-compliance with the 28-day deadline for notifying
claims. On the contrary, although the Supreme Court
recognised (in the factual circumstances of that specific
case) that sub-clause 20.1 of the 1999 FIDIC conditions
of contract was valid, at the same time it provided the
contractors with a number of arguments against the
employer that rejected such “late” claims as “time-
barred” under sub-clause 20.1.
Firstly, the Supreme Court indicated that the
effectiveness of such a contractual provision in respect of
a particular claim is, each time, subject to examination in
the light of the terms of Article 3531 in conjunction with
Article 56 of the Civil Code15. As a result, if the employer
has been notified in any way of the grounds for the claim
(for example, the necessity to carry out additional work),
to recognise that the contractor’s right to be paid has
expired because of its non-compliance with the
28-day notification period would be inconsistent with
the purpose and nature of sub-clause 20.1 as well as
with the principles of social coexistence16.
Secondly, the Supreme Court stated that the expiry
of the right to pursue claims on the basis of sub-
clause 20.1 of the 1999 FIDIC conditions of contract
does not deprive the contractor of the possibility to
pursue – under Article 405 of the Civil Code – the
return of undue benefits that the employer obtained
at the contractor’s cost as a result of, for instance, the
performance of additional work. The Supreme Court
indicated that sub-clause 20.1 does not imply that in
the event of non-compliance with the 28-day deadline,
the employer’s liability is excluded on the basis of the
regulations on undue benefits. Regulations on undue
benefits constitute a separate, statutory, non-contractual
basis for liability and its exclusion by contract (based on
Article 473 of the Civil Code) would have to be clear and
unambiguous.
Thirdly, another possibility of defence against the
employer’s charges as indicated in the gloss to the
decision of the Supreme Court17 is reference to the
argument that a deadline is deemed not set (by analogy
to Article 94 of the Civil Code). This argument might
be used in the situation where deadlines in complex
construction processes are too short18 or the notification
formula is too elaborate, which makes it difficult for the
party to notify claims.
Fourthly, and finally, an obvious solution is also reference
to Article 5 of the Civil Code in order to prove that the
employer’s claiming the expiry of the contactor’s “late”
claim in the circumstances of a specific case constitutes
an abuse of law19. In particular, this is so in the context
of the lack of equivalence of performances between the
parties, since the notification of claims by the employer is
not subject to the same rigour20.
As a consequence, there are – in practice – many
possibilities for the contractor to defend itself against the
employer’s charges regarding its failure to comply with
the deadline for notifying claims under sub-clause 20.1 of
the 1999 FIDIC conditions of contract.
SUB-CLAUSES 20.1 AND 20.2.1 OF THE 2017
FIDIC CONDITIONS OF CONTRACT AND
THE EXISTING STANDPOINT IN PRACTICE
The 2017 version of FIDIC conditions of contract
introduced an identical procedure for notifying claims for
extra money and extra time for both the employer and
the contractor in the existing sub-clause 20.1 of the 1999
version (currently, sub-clause 20.2.1 of 2017 version).
In fact, it has equalised the severity of the consequences
for both parties to a contract for the failure to comply
with the 28-day deadline.
As a result, if the contractor fails to comply with the
deadline to notify a claim, some arguments that have
been raised to date by the state courts21 lose their
significance. This refers in particular to those connected
with the breach of the principle of equivalence (Article
487 § 2 of the Civil Code) and, as a consequence, the
possibility of applying Article 58 § 2 of the Civil Code22 in
relation to sub-clause 20.1 of the 1999 FIDIC conditions

15
 f. judgment of the Supreme Court of 19 March 2015, case no. IV CSK 443/14.
C
16
Cf. J. Al-Dine Nassar, Claims, disputes and arbitration by virtue of the “Conditions of Contract for Works of Civil Engineering Construction (Red Book)”, Fourth Edition, 1987; and the “Contract for
Construction (New Red Book)”, First Edition, 1999, International Journal of Arab Arbitration 2009, Vol. 1 Issue 1) s. 95 – 132 and C. Seppala, Contractor’s Claims under the FIDIC Contracts for Major
Works, (2005) 21(4) Construction Law Journal, p. 287; cf. M. Mortimer-Hawkins, Clause 20, Dispute resolution, http://fidic.org/sites/default/files/24%20CLAUSE%2020%2C%20DISPUTE%20
RESOLUTION.pdf.
17
A . Szlęzak, A gloss to the judgment of the Supreme Court of 23 March 2017, case no. V CSK 449/16, Glosa, 2018.
18
GDDKiA in Special Conditions shortens the deadline for the notification of claims from 28 to 14 days.
19
The introduction of a deadline as such may constitute abuse of law, cf. A. Stangret-Smoczyńska, Umowne terminy zawite, Przegląd Sądowy, January 2011, p. 59.
20
The above issue is also pointed out by European International Contractors (EIC), cf. EIC Contractor’s Guide to the FIDIC Conditions of Contract for Construction, 2002, p. 20.
21
Cf. Judgement of the Court of Appeal in Warsaw of 4 July 2016, case no. VI ACa 569/15.
22
Judgement of the Court of Appeal in Warsaw of 4 July 2016, case no. VI ACa 569/15.

www.dlapiper.com  |  33
of contract. However, if the employer – in particular It should also be noted that while the controversial
under the Public Procurement Law – decides to modify standpoint of the Supreme Court in its judgment
sub-clause 20.2.1 of the 2017 version for its own benefit of 23 March 2017 (on the permissibility of setting
only, the position developed so far by the state courts a final contractual deadline causing the expiry of
will remain valid. the contractor’s claims) has been mitigated by the
development of the concept of defence in the event
The same considerations apply to the effectiveness of
of the contractor’s failure to comply with the 28-day
reference to the abuse of law by the employer (Article
deadline for notifying claims, the new wording of sub-
5 of the Civil Code). In particular, if the employer
clause 20.1 of the 2017 FIDIC conditions of contract
decides in specific conditions to shorten the deadline
makes most of the arguments used to date insignificant.
for notifying claims for the contractor only, then the
arguments raised in the judgment of the Supreme Court As a result, as early as at the stage of implementing
23
and in the gloss to that judgment24 will also lose their 2017 FIDIC-based construction contracts, the parties
significance. should act with even greater care in making and notifying
claims in order to prevent the situation where the
SUMMARY courts recognise the expiry of such claims for formal
reasons only.
To sum up, in the practice of performing construction
contracts based on FIDIC conditions of contract –
regardless of the version – the contractor should treat
the formal aspects of the claim notification procedure
under clause 20 with due diligence. It is important to
note that in the 2017 FIDIC conditions of contract, the
same rigour has been imposed on the employer.

23
Judgement of the Supreme Court of 23 March 2017, case no. V CSK 449/16.
24
A. Szlęzak, A gloss to the judgment of the Supreme Court of 23 March 2017, case no. V CSK 449/16, Glosa, 2018.

34  | The New FIDIC Conditions of Contract (2017) from the Polish Perspective
THE BINDING FORCE OF DECISIONS ISSUED BY
THE DISPUTE ADJUDICATION BOARD – FIDIC
CONDITIONS OF CONTRACT: THE 1999 AND
2017 VERSIONS OF THE YELLOW BOOK AND
THE RED BOOK

www.dlapiper.com  |  35
 PIOTR OLKOWSKI, DLA PIPER

INTRODUCTION LEGAL NATURE AND BINDING FORCE

OF DECISIONS ISSUED BY THE DISPUTE
The parties to contracts for the performance of
ADJUDICATION BOARD
large, complex infrastructure projects are becoming
increasingly aware of the likelihood of disputes arising in Model contract clauses do not always stipulate that
the course of their cooperation. Mainly for this reason, decisions issued by dispute adjudication boards are
multi-stage contractual clauses defining the procedure binding on the parties. However, if such provisions are
to follow in the event of a dispute have become popular. contained in a contract and a party fails to comply with
The insertion of a multi-stage litigious procedure the decision, it is generally recognised that the breaching
clause in a contract often allows the parties to find a party is liable for the failure to perform or the improper
compromise at an early stage of the dispute and prevent performance of the contract (breach of contract)2 .
its escalation. Proceedings before a dispute adjudication
Nevertheless, there is also no doubt that decisions
board, as one of the stages of dispute resolution, is a
of dispute adjudication boards cannot be treated as
common solution that appears in construction contract
decisions of courts of law or of courts of arbitration3.
templates used in various regions of the world. Also,
Proceedings before a dispute adjudication board are only
international arbitration organisations have developed
an interim stage of a litigious procedure4 – the last stage
model contractual clauses providing for dispute
being proceedings before a court of arbitration or a state
adjudication boards1.
court. As a consequence, it is not possible to ascertain
The role of the dispute adjudication board members is the enforceability of the decisions of dispute adjudication
simply to analyse the cases referred to them and present boards on the basis of national laws5 or on the basis
the results of their analysis to the parties to the dispute. of the New York Convention on the recognition and
The conclusions reached by the dispute adjudication enforcement of foreign arbitral awards.
board may constitute non-binding recommendations
A party that is dissatisfied with the decision of a dispute
that the parties decide to recognise, at their own
adjudication board may challenge the decision by the
discretion, as binding, or they may reject them in full.
deadline stipulated in the contract by filing a notice
The conclusions reached by the dispute adjudication
of dissatisfaction6. In this context, significant practical
board may also take the form of binding decisions.
questions arise: (i) what does it mean that a decision
The question then arises about the effect of such
is binding as of its issuance if, in accordance with the
decisions: what does it mean in practice that a decision of
contract, such a decision is not final and a complaint
a dispute adjudication board is binding on the parties?
may be lodged against it? and (ii) what actions may the
As the construction contract templates that are most beneficiary of the decision take in this situation?
often used in Poland are FIDIC conditions of contract,
the considerations presented below will concern the
1999 and 2017 versions of the FIDIC Yellow Book
(“design and build”) and the FIDIC Red Book (“build”).

1
 he American Arbitration Association (AAA) published Dispute Review Board Guide Specification in December 2000. Documents related to the dispute board have also been prepared by the
T
International Chamber of Commerce (ICC) – the set comprising Dispute Board Clauses, Dispute Board Rules and Model Dispute Board Member Agreement was first published in September 2004.
2
Jane Jenkins, International Construction Arbitration Law. Second revised edition., Kluwer Law International BV, 2014, p. 60.
3
Jane Jenkins, International Construction Arbitration Law. Second revised edition., Kluwer Law International BV, 2014, p. 115. The FIDIC Red Book and Yellow Book 2017 expressly state that proceedings
before a dispute adjudication board are not arbitral proceedings (sub-clause 21.4.3).
4
C ompared to proceedings before a court of arbitration, proceedings before a dispute adjudication board are much simpler (in principle, the entire procedure must be as quick as possible) and
most of the rules of procedure applicable in arbitral proceedings do not apply.
5
In Polish law, the provisions on the recognition and enforcement of foreign arbitral awards are contained in Part V of the Civil Procedure Code (Court of arbitration) in Art. 1212 – 1217.
6
T he FIDIC conditions of contract provide for a 28-day deadline as of the date of service of the board’s decision on the party.

36  | The New FIDIC Conditions of Contract (2017) from the Polish Perspective
WHAT CAN BE DONE WITH A DISPUTE
ADJUDICATION BOARD’S BINDING
DECISION THAT IS NOT FINAL?
(the Persero I and Persero II cases)
The 2017 versions of the FIDIC Yellow Book and
Red Book expressly state that a decision of a dispute
adjudication board is binding on both parties and they
should promptly comply with it, irrespective of whether
either party has filed a notice of dissatisfaction with
respect to the decision7. Although there was no such
clear provision in the 1999 versions of the FIDIC Yellow
Book and Red Book, the binding force of the decision
of the dispute adjudication board was understood in
the same way on the basis of the provisions of the 1999
version.
In the practice of applying the 1999 version of the FIDIC
conditions of contract, a question has arisen of how the
binding force of a non-final decision issued by the dispute
adjudication board can be enforced and what the proper
procedure for it is. If, as stated above, the failure to
comply with the board’s decision constitutes a breach of
contract, then, one of the solutions would be to start the
whole procedure of settling a dispute under a contract
once again (in FIDIC contracts, the procedure starts
with serving a notice on the contract engineer). Another
possible solution would be to submit the case, covering
only the issue of non-compliance by the other party with
the board’s decision, directly to arbitration. The choice
between the first and second solution did not seem clear
a couple of years ago.
The problem under discussion was the subject of conflict
in state courts and courts of arbitration in Singapore
in the years 2009 – 2015, in the well-known Persero I
and Persero II cases. The construction contract, which
7
S ub-clause 21.4.3 of the FIDIC Yellow Book and Red Book 2017: “The decision shall be binding on both Parties, who shall promptly comply with it whether or not a Party gives a NOD with respect to such
decision (…)”.
8
The Indonesian company PT Perusahaan Gas Negara (Persero) TBK
9
The Indonesian company CRW Joint Operation
10
T he court of arbitration may, in this situation, issue an award ordering the parties to perform the board’s decision, which, as a consequence, may result (after deciding that the award is
enforceable) in the enforcement of the adjudicated performance.
was the basis for the cooperation between parties,
was based on the FIDIC Red Book 1999. The dispute
was referred to a dispute adjudication board, which
issued a binding decision and obligated the employer8 to
pay approximately USD 17 million to the contractor9.
The employer made an effective complaint against the
decision by filing a notice of dissatisfaction and thus the
decision did not become final. Next, the contractor
applied to the court of arbitration to ascertain the
effectiveness of the dispute adjudication board’s decision
and the ICC court of arbitration in Singapore issued an
award stating that the binding decision – despite the fact
that a notice of dissatisfaction had been filed against it –
should be promptly enforced and the employer should
pay approximately USD 17 million to the contractor.
The arbitral award was appealed against by an application
to set aside (the so-called Persero I case) and in this way
court proceedings were initiated, which lasted until
2015. Finally, in the judgment in the so-called Persero II
case, the state court in Singapore (the Court of Appeal)
found that there was no reason for the party that was
the beneficiary of the board’s decision to go through
the entire procedure once again and once again raise
the issue of the other party’s non-compliance with
the decision. This court took a clear position that it
is permissible to directly submit a case relating to the
non-performance of a dispute adjudication board’s
decision to separate arbitration10. The interesting thing
is that the Singapore court of appeal was aware that the
case was still to be examined on its merits by a court
of arbitration, but despite that – due to the contractual
clause providing for the immediately binding nature
of the decision of the dispute adjudication board – it
issued a judgment ordering the relevant party to make
the performance. This judgment regulated the situation
between the parties only temporarily; the situation
www.dlapiper.com  |  37
could change completely after the conclusion of the main are final and binding only if both parties so decide15.
arbitral proceedings on the merits of the dispute if the Therefore, the decisions issued by a dispute adjudication
court of arbitration issued a different decision than that board under GDDKiA contracts are non-binding
of the dispute adjudication board. recommendations in nature. If either party does not
agree with the decisions of the board, the other party
The decision in the Persero II case was generally approved
has no legal way of enforcing the decision – the only
by the international arbitration milieu11. Due to the
remedy is to conduct proceedings on the merits of the
controversies surrounding the effectiveness of decisions
case in the arbitration court.
of dispute adjudication boards that occurred in the
Persero I and Persoro II cases, on 1 April 2013 the
FIDIC organisation issued a supplement12 to the 1999 SUMMARY
version of the FIDIC Red Book, Yellow Book and Silver The FIDIC conditions of contract give the parties an
Book. According to this supplement, if one party has opportunity to use a model clause on dispute resolution.
not complied with the binding decision of the dispute If the parties use the model reading of that clause,
adjudication board, the other party that obtained the then, in concluding a contract, they should consider in
positive decision may apply directly to the court of particular the issue of the binding force of a decision
arbitration for the issue of an award obliging the non- of the dispute adjudication board. The parties should
compliant party to respect the decision of the board13. assess whether it is acceptable that a non-final decision
The same solution has been adopted in the model of the dispute adjudication board can be the basis for
reading of the 2017 FIDIC Yellow Book and Red Book14. issuing an interim arbitral award (e.g. adjudicating a
pecuniary performance) or can constitute the basis for
DISPUTE ADJUDICATION BOARDS – granting interim measures (by a state court or court of
POLISH EXPERIENCE arbitration) even if the main arbitral proceedings are only
at an early stage.
In Polish practice, the discussed issues have limited
importance due to the general phenomenon of deleting Certainly, from the perspective of Polish companies, the
multi-stage dispute resolution clauses envisaged in issues discussed in this article are of greater relevance
the FIDIC conditions of contract. This is especially in relation to commercial investments not financed out
the practice of public ordering parties, who remove of public funds. With respect to such investments, the
from their contract templates provisions on dispute parties may freely define the content of the provisions
adjudication boards and courts of arbitration and of a contract – it is possible to introduce a mechanism
replace them with a jurisdiction clause indicating Polish allowing prompt enforcement of a decision of the dispute
state courts as having jurisdiction. An exception is the adjudication board (in accordance with the model reading
General Directorate for National Roads and Motorways of the FIDIC contract template) or to intentionally forgo
(GDDKiA), which has provisions on dispute adjudication such a solution.
boards and a clause on arbitration courts in its currently
used contract templates. Under GDDKiA contracts,
the decisions issued by dispute adjudication boards

11
E .g. Christopher R Seppälä, An Excellent Decision From Singapore Which Should Enhance the Enforceability of Decisions of Dsipute Adjudication Boards – the Second Persero Case before the Court of
Appeal, Construction Law Review, Issue 7 (2015), p. 367, Frédéric Gillon, Persero II: “Pay now, argue later” in the context of DAB decisions – what approach best advances the purpose of the FIDIC’s
security of payment regime?, The International Construction Law Review, 2015, p. 26.
12
FIDIC’s Guidance Memorandum for Users of the 1999 Conditions of Contracts, dated 1 April 2013.
13
The new reading of sub-clause 20.7 adopted by FIDIC on 1 April 2013.
14
Sub-clause 21.7 of the 2017 FIDIC Yellow Book and Red Book.
15
Sub-clause 20.4 of the GDDKiA conditions of contract (https://www.gddkia.gov.pl/pl/1995/Wzorcowe-Warunki-Kontraktowe-WWK-dla-systemu-Projektuj-i-buduj)

38  | The New FIDIC Conditions of Contract (2017) from the Polish Perspective
CONTACT DETAILS
Krzysztof Kycia
Partner, Head of Litigation and Anna Kopania
Arbitration Associate
Attorney-at-law Advocate
T  + 48 22 540 74 09 T  + 48 22 540 74 16
krzysztof.kycia@dlapiper.com anna.kopania@dlapiper.com

Piotr Olkowski Szymon Sakowski

Counsel Associate
Advocate Advocate
T  +48 22 540 74 58 T  +48 22 540 78 07
piotr.olkowski@dlapiper.com szymon.sakowski@dlapiper.com

Mikołaj Strojnowski Magdalena Krajewska

Senior associate Associate
Attorney-at-law Trainee attorney-at-law
T  +48 22 540 74 20 T  +48 22 540 74 16
mikolaj.strojnowski@dlapiper.com magdalena.krajewska@dlapiper.com

Monika Leszko Paweł Bartosiewicz

Senior associate
Associate
Attorney-at-law
Trainee attorney-at-law
T  +48 22 540 74 11
T  + 48 540 74 12
monika.leszko@dlapiper.com
pawel.bartosiewicz@dlapiper.com

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