UK: IChemE Launches International Forms Of Contract

In November 2007 the Institution of Chemical Engineers launched a suite of standard form process plant contracts for use internationally.

The International Forms of Contract have been drafted in response to the growing number of process plants that are being constructed overseas. They are based on and are a development of the existing domestic IChemE contracts that were first published in 1968.

Prior to the publication of these contracts and in addition to bespoke contracts drafted for such schemes, several standard forms of contract already existed that were suitable for the design and construction of process plants overseas. These include: the FIDIC Conditions of Contract for Plant and Design-Build (Yellow Book), the ENAA Model Form International Contract for Process Plant Construction, and newly published ICC Model Turnkey Contract for Major.

So why the need for a new suite of contracts? IChemE’s take is that process plants have particular needs and therefore require a specialist contract that is different from those other more established international turnkey contracts. Only time will tell whether the new IChemE form finds favour internationally and becomes a serious rival to the other forms. According to IChemE, the response from the industry to its consultation edition has been positive.

A comparison of some of the key provisions in the IChemE International Red Book for lump sum contracts and the FIDIC Yellow Book is available by clicking here

This article was written for Law-Now, CMS Cameron McKenna's free online information service. To register for Law-Now, please go to www.law-now.com/law-now/mondaq

The original publication date for this article was 17/12/2007.