In international construction projects, it is standard practice for the Employer to request guarantees to secure the performance of the Contractor. The most frequent guarantees are the bid bond, the advance payment bond, the performance bond and the warranty bond. Let’s see the features of each of them and then the form that they usually have in the practice.
Bonds in international construction contracts: what they are.
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International Construction
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International Construction Project: ANCE Report 2016
The 2016 Report from the Italian Association of Contractors shows that international construction projects are a big portion of their revenues. The Report highlights also that this is a trend which involves not only the big companies but also the SME companies.
The analysis of the domestic and international revenues has been conducted on 38 Italian companies (with turnover between €50 Million and above €500 Million) and
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International Construction
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How to subcontract in International Construction Projects
In mid-big sized projects, it is a crucial to understand how to subcontract part of the works especially in an international construction project. The various issues involved in subcontracting part of the works can determine the success or the failure of a project and/or can massively increase the financial risks and/or losses for either the Employer or the Contractor.
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International Construction
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Subcontractor selection in Construction Projects and the FIDIC Books
In international construction projects, the Employer (and certainly the Contractor) may suffer the consequences of a wrong selection of the Subcontractor and this may have an impact on the timing for completion or on the quality of works executed.
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International Construction
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How to obtain an interim measure in Italian arbitration proceedings
Article 818 of the Italian Civil Procedural Code provides that the arbitral tribunal cannot grant “[…] seizure orders and any other precautionary measures […]”. This provision still comes from the old dis-favor of the Italian legislator for the arbitration compared with the State Court proceedings and accordingly the party will have recourse to Courts for any requests of interim measures during the arbitration proceedings.
The matter is highly debated in Italy for several reasons.
In general terms there are precautionary measures which may affect third parties and that therefore could be of prejudice for the third party who is not a party in the arbitration. There are however also precautionary measures which are directed only to one of the parties of the arbitration and there would be no reason to prohibit the granting of precautionary measures against them.
An additional distinction has then to be made in respect of precautionary measures which requires for their own nature an enforcement or in any event a judicial modification of the status quo.
The arbitrators can be considered as entitled to grant all the precautionary measures addressed to one of the parties who can be voluntarily complied with or those measures which do not imply in themselves any judicial modification of the status quo. The failure to comply voluntarily with measures adopted by the arbitrators can be certainly sanctioned with monetary fines. Such an approach is exactly the one adopted for instance by Italian National and International Chamber of Arbitration of Milan Rules and Italian Arbitration Association (AIA) Rules.
The fact that the arbitrators do not have enforcement powers would certainly jeopardise (some) precautionary measures eventually granted by the arbitrators. It must be however considered that the parties voluntarily decided to refer their future disputes to arbitration and in principle there should be no reason to fear that the parties would not voluntarily comply with interim measures ordered by the arbitrators.
It is widely accepted in Italy that the arbitrators should have been expressly granted the power to issue interim measures as it happens in many jurisdictions and as it is well provided in the UNCITRAL Model Law. Certainly the provision (contained in the Model Law) of security in case of interim measures would have limited the possible negative impact of the granting of such measures and, at least, the Italian Civil Procedural Code could have provided for a second level control to be carried out by the State Courts, maybe similar to the provisions contained in the Model Law.
* This article published by BDA Studio Legale is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
The matter is highly debated in Italy for several reasons.
In general terms there are precautionary measures which may affect third parties and that therefore could be of prejudice for the third party who is not a party in the arbitration. There are however also precautionary measures which are directed only to one of the parties of the arbitration and there would be no reason to prohibit the granting of precautionary measures against them.
An additional distinction has then to be made in respect of precautionary measures which requires for their own nature an enforcement or in any event a judicial modification of the status quo.
The arbitrators can be considered as entitled to grant all the precautionary measures addressed to one of the parties who can be voluntarily complied with or those measures which do not imply in themselves any judicial modification of the status quo. The failure to comply voluntarily with measures adopted by the arbitrators can be certainly sanctioned with monetary fines. Such an approach is exactly the one adopted for instance by Italian National and International Chamber of Arbitration of Milan Rules and Italian Arbitration Association (AIA) Rules.
The fact that the arbitrators do not have enforcement powers would certainly jeopardise (some) precautionary measures eventually granted by the arbitrators. It must be however considered that the parties voluntarily decided to refer their future disputes to arbitration and in principle there should be no reason to fear that the parties would not voluntarily comply with interim measures ordered by the arbitrators.
It is widely accepted in Italy that the arbitrators should have been expressly granted the power to issue interim measures as it happens in many jurisdictions and as it is well provided in the UNCITRAL Model Law. Certainly the provision (contained in the Model Law) of security in case of interim measures would have limited the possible negative impact of the granting of such measures and, at least, the Italian Civil Procedural Code could have provided for a second level control to be carried out by the State Courts, maybe similar to the provisions contained in the Model Law.
* This article published by BDA Studio Legale is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
Topics:
International Construction
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