NORDIC GERMAN LAW SEMINAR 2019
Programme 15:00 – 15:05: Welcome and introductions 15:05 – 15.35: ”The Prague Rules”, by Hans Bagner, Morssing & Nycander 15:35 – 16:00: ”Delay damages in offshore logistics”, by Rósing Rasmussen and Bo Sandroos, WSCO 16:00 – 16:30: Break, with coffee and snacks 16:30 – 16.55: ”Bills of Lading in the tramp trade ”, by Jesper Windahl, WSCO 16:55 – 17.30: ”Insurance, contracting and claims experience in offshore wind projects”, by John Croucher and Miles Wakefield, The Standard Club UK Ltd 17:30 – 18:30: Beverages and canapés 2
Presentation by Hans Bagner in Hamburg on 10 April 2019 TAKING O OF E EVIDENCE ENCE IN I INTER TERNA NATI TIONAL AL ARBI BITR TRATI TION AND ND TH THE E PRAGUE E RULES OF D OF DECEMBER 2 2018
Back ckgroun und • International Arbitration • Competition between two or more national procedural rules • Arbitration – not litigation
IBA R A Rul ules • 1999 IBA Rules on the Taking of Evidence in International Arbitration (IBA Rules) • 2010 Revised version of IBA Rules • IBA Rules: compromise of the common law and the civil law different systems and procedures on the taking of evidence. • IBA Rules successfully influenced the practice of international arbitration • Critique of the IBA Rules : dominance of the common law traditions • Creeping Americanisation of international arbitration e.g. use of written witness statements, lengthy cross examination of witnesses, extensive document production. • Time and cost efficiency - has it been achieved?
Prague gue Rul ules es • The result of discussions since April 2017; a working group presented the new Rules – adopted in December 2019 in Prague (www.praguerules.com) • “Rules of the Efficient Conduct of Proceedings in International Arbitration” • Favoring the civil law tradition • An inquisitorial approach (rather than an adversarial ) – proactive role of the AT • Reducing time and costs • AT and the parties shall in principle avoid production of documents including e-discovery (Art 4.2)
Summ mmar ary • Prague Rules bridge gaps • Parties from civil law countries (Continental Europe, Latin America, Middle East, Asia) would feel more comfortable • Attractive to Disputes comprising a limited amount • One size does not fit all
Delay Damages in Offshore Logistics Nordic German Law Seminar Hamburg 10 April 2019 Rósing Rasmussen & Bo Sandroos WSCO law firm
Introduction – delay damages Two legal constructs • “Delay”; and – “Damages” – The purpose is to provide insight into some of the legal • disputes and potential pitfalls regarding “Delay”, in particular the Programme and the significance of critical paths; – Programme float; and – and to highlight practical issues causing delays in offshore logistics, – and illustrate how typical issues may be resolved in the contract 9
Introduction - Danish offshore markets Offshore oil and natural gas • Exploration since 1962, production since 1972; – Operators include Total, Ineos, Hess; – Awards in 8th oil and gas round imminent; – Denmark has been self-sufficient in oil and gas since 1994 (2018: – 98%) Offshore wind • Production since 1991; – Operators include Ørsted, Vattenfall, Eon; – Horns Rev III and Kriegers Flak offshore wind parks being developed; – Ca. 50% of electricity production in Denmark is from wind – 10
Danish construction law on delay Freedom of contract • Delay; – Float; – Damages – Case law • Danish ordinary courts; – Danish Arbitration Board for Building and Construction – (Voldgiftsnævnet for Bygge- og Anlægsvirksomhed) deciding on standard onshore contracts, including especially AB 92 and AB 18 • ABT 93 • 24/04/2019 11
Danish construction law on delay ( cont.) A delay will have occurred where works are not completed by the • contractually agreed delivery date Completion date for the entirety of works; – Completion dates for milestones – Different contract, different terms • Delivery Date (NEWBUILDCON, SAJ); – Time for Completion (FIDIC); – Completion Date (NEC, LOGIC) – Contractual delay mechanisms • Extension of time; – Requirements to give notice in connection with request for extension – of time; Obligation to progress the works prior to completion date; – Recovery of time-related cost in certain circumstances and associated – notice provisions 24/04/2019 12
Delay and causal link requirements Danish law: right for an extension of time if the occurrence • actually causes the works to exceed a date for the completion of the works or – a milestone on a critical path – Pursuant to FIDIC, the Contractor is entitled to an extension • of Time for Completion if delay caused by e.g. a Variation; – a cause of delay giving an entitlement to an extension of time under a – Sub-Clause of the Contract; or a delay, impediment or prevention attributable to the Employer – If an occurrence does not fall on a critical path or does not • in itself cause a delay: no right for an extension of time 13
Float – definition and challenge Float defines • the period between the finalization of the works and the agreed upon – delivery date during which no works are scheduled to be performed; and The period between individual activities scheduled under the – Programme, e.g. on a critical path. a prolongation of the execution of the works on a critical • path caused by the Employer may not in itself affect the Taking Over of the Works or the agreed milestones. “if all float is being consumed by the Employer and the Contractor has an incident that causes an actual delay exceeding the date for completion, the question of what party is entitled to consume (or revoke) the float arises“ 14
Float – legal issues Float may belong to: • the Employer – the Contractor; or – the Project as such – Enrichment considerations • Contractor entitled to consume the float for delays that he himself has – caused first Contractor will not be entitled to an extension of time if the Employer – causes a prolonging of the Works that may covered by unconsumed float The legal position is therefore (probably) that unconsumed • float belongs not to the Parties, but the project Exceptions? • 15
What can cause a delay in offshore logistics and construction? Working methodology changed, by the Employer • Weight, dimensions of item to be transported/installed not • as agreed Employer supplied items, e.g. barge, not available to • Contractor on time Unforeseen circumstances, requirements, requests • Foundations, monopiles, transition pieces not available to • installation Contractor Weather downtime • 16
Contract clauses to govern causes of delay, for illustration 5.0 LIMITED DURATIONS The Execution Plan and Compensation are subject to the limited duration(s) for time spent or lost for various activities as further detailed in this Clause 5.0. If the subject durations exceed(s) the time indicated for the applicable activity, Contractor shall be entitled to a Variation Order in accordance with Clause 30 of the Conditions of Contract. (i) Nil (0) hours for delay due to permits, certificates, approvals, authorisations, consents, licences, interface coordination, etc., which shall all be provided by Employer. (ii) Nil (0) hours for delays and cost associated with the removal of any debris or other obstructions, not caused by Contractor. Removal of any debris, not caused by Contractor, may be removed at the applicable day rates, however can only be executed if within the capability of the ROV. [ (iii) – (xii) ] The Compensation and Execution Plan are subject to the condition that Contractor is allowed to work twenty-four (24) hours per day and seven (7) days per week. Contractor shall be entitled to a Variation Order in accordance with Clause 30 of the Conditions of Contract for any deviation to these working practices due to decision(s)/instructions of Employer or in accordance with any applicable law, state, regulation or otherwise from an authority having jurisdiction. Weather Downtime shall mean any situation, other than a Force Majeure event, where the Weather Downtime Marine Spread is prevented to perform the Work in a safe manner due to weather conditions, such as swells, currents, waves, visibility (both underwater and above water) and wind. 17
Damages Starting points • Contractual regulation – Danish law conditions for damages/calculation – Mitigation – limitation of losses – Often liquidated damages • Milestones – Catch-up? – Indirect and consequential damages • ”Global” liability (?) • ”Disruption” (?) • 18
Recommendations Establish and update Schedule(s)/Programme(s) • Set out provisions for what constitutes delay • Set out provisions for what entitles the contractor to a • variation order Regulate ”float” between the parties • 19
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Break
Bills of Lading in the tramp trade Bills of Lading in the tramp-trade - The Nordic perspective Jesper Windahl, advokat, partner Nordic German law seminar 22
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