A NZ property developer “PROFIT” proposed to develop an office building in Beijing, The Republic of China. This requires the use of FIDIC Conditions of Contracts for Construction (i.e. the 1999 Red Book) which is different in the dispute resolution mechanisms compare to the local NZS 3910:2003 Conditions of Contract.
The first objective of this report is to compare the difference in the dispute resolution mechanisms between the 1999 Red Book and the NZS 3910:2003 Conditions of Contract. The second objective is to give critical comments to the dispute resolution mechanisms in these 2 standards.
Tables and flow charts
There are many differences in the dispute resolution mechanisms between the 1999 Red Book and the NZS 3910:2003 Condition of Contracts. Figure 1 and Figure 2 shows the flow of structure for dispute in both 1999 Red Book and NZS 3910:2003. The figures show that the general flow path between the two acts is similar. For both acts, the engineer that is responsible for the contract is always the first person (party) to be referred to. If the engineer cannot solve the dispute, both acts recommend a method of dispute resolution (by a neutral third party) before referring to arbitration. Arbitration is the last method of dispute resolution that can be used for both acts, the decision from arbitration is call an award and binding and enforceable to both the clients and the contractors.
There are 5 major differences between 1999 Red Book and NZS 3910:2003. The differences are listed on table 1.
The first difference is the difference in engineer’s position and engineer’s response. In the 1999 Red Book, the engineer is an employee of the client. The response of the engineer can be regard as the response of the client to the contractor (Cl 20.1). In the NZS 3910:2003, the engineer is a third neutral party responsible for the contract. The decision of the engineer...