Research On The Dispute Resolution Of EPC Contract

"Conditions of Contract for EPC /Turnkey Projects", which is published by FIDIC in September 1999, is often called"silver book". The EPC project general contracting mode is different from previous construction general contracting mode, which design, procurement, construction in project implementation process is by the general contractor has overall responsibility for the owners .The advantage of EPC is to achieve the design, procurement and construction stages of a reasonable cross and well-coordinated, therefore, to achieve the savings investment, shorten the construction period and improve the quality objectives. EPC gradually become the mainstream of the international engineering construction modes. However, EPC projects generally have long construction period, the subject matter of the contract is large, involving extensive and complex issues, coupled with the EPC contract involves parties from different countries, cultural, customs and legal systems are different, controversy are inevitable. This article from the characteristics, nature and the legal relations of related subject of the EPC contract analyzes the characteristics and causes, and on this basis, researching the DAB mode in EPC contract dispute resolution procedures of FIDIC.This article is divided into four chapters, the first chapter introduces the concept, types and characteristics of EPC contract. EPC contract is engineering general contract which is the signed by the owner and contractor, the general contractor is responsible for organizing the design, procurement, and construction, the salient feature is the greater risk which commitments by the contractor and the cancellation of consulting engineers . Secondly, the author introduces the related subjects and the legal relations of the EPC contract. EPC contract has changed the traditional tripartite model which is Owners - Engineer - Contractor, appearing the behalf of the owners. These make the relationship between "the owner and contractor" clear and simple, highlighting the dominant responsibility of EPC contractor. Finally, the author analyzes the nature of the EPC contract and the applicable law. EPC contract is the simple sum of the design contract, the procurement contract and construction contract, the design contract and procurement contract which are construction contracts, the essence is the contract for processing; procurement contract is the contract of sales which subject matter is special, in the whole project, living in an important connecting position. Application of law must respect the choice of the parties, but in practice due to the mandatory law restrictions of the country where the project is, usually they will choose the laws of the country as the law applicable to the contract.The second chapter analyzes the EPC contract dispute with the characteristics and common types of disputes in the first place. The subject of EPC contract dispute is the bilateral party , that owners and contractors , the controversy has largely focused on the economic interests between them , the continuous cycle of the EPC contract is generally longer, involved more legal relations, contractual disputes has a high probability of occurring. In practice, the common EPC contract disputes including range of disputes is not clear, period delay disputes, procurement disputes, the disputes of contract file error, terminate the contract disputes. Second, it analyzes the performance of the EPC process, the various causes of EPC contract disputes. Generally, the causes of EPC contract dispute include contract range large, involved broad and complex issues ; the period of construction is longer , and more uncertainty ; in the implementation process EPC project has more stakeholders and complex engineering environment; it is impossible to know everything and the allocation of risk in the contract dispute is one of the important reasons.The third chapter introduces the dispute resolution process of EPC contract prepared by the FIDIC, eliciting the widely used way of DAB in the international engineering contract dispute. Second, the author discusses the dispute resolution on DAB from concept, production, content and procedures, values and the main functions, characteristics of DAB. DAB is short for Dispute Adjudication Board, which original form is Dispute Review Board (DRB). Compared with other dispute resolutions, the values and main features of DAB include: coordination of interests and promote bilateral cooperation; just resolution of disputes and reduce litigation risk; more rationality based on the legitimacy .DAB method has strict procedures and requirements, has timely, impartial, scientific, security, effectiveness and other characteristics.The fourth chapter discusses the legal issues of DAB. This chapter first analyzes the nature and legal relations of the DAB. DAB is a non-statutory, informal, contractual nature of private dispute resolution, contractual nature is its essential characteristic .In the legal relationship of DAB, the commission contract relationship between the DAB members and owners and contractors, the relationship between the owner and the contractor is engineering contract. Second, the author discusses the jurisdiction and the law applicable of the DAB. Only disputes between owners and contractors, and the production of dispute must be related to the construction contract or project, to be part of the jurisdiction of DAB. With the applicable law of the DAB, the author analyzes the DAB agreement, DAB procedure law, DAB substantive law from three aspects. The third chapter discusses the legal effect of the DAB decision. DAB decisions have determined force, shall not be altered. While its effect is conditional, final effect need go through the opposition period of 28 days. The power of DAB implementation of the decision is also weaker than arbitration, can not be directly enforced. Finally, the author analyzes solution means after the failure of the DAB—arbitration. The author discusses one view from the reasons of arbitration better than the litigation, a point for attention of arbitration, comparison of DAB and arbitration.EPC contract as the current in the field of international project contracting and widely influenced the application of FIDIC Conditions of Contract series , it includes the concept of "design, procurement and construction integration" has great inspiration to reform the mode of Chinese engineering contract . To research the nature of EPC contract, characteristics, and dispute resolution, enabling to solve problems fairly and effectively in project implementation, EPC engineering contract for the participation of Chinese enterprises is of great significance.