What are the FIDIC Golden Principles?

FIDIC Golden Principles are the essential features of a FIDIC Contract that make the risk/reward allocation fair and balanced.

On FIDIC’s request, the Contracts Committee set up a special Task Group (TG15) in order to identify which contractual principles of each form of FIDIC contract FIDIC considers to be inviolable and sacrosanct. These principles are referred to as the “FIDIC Golden Principles” (GPs).TG15 was also requested to consider and suggest possible ways to prevent, or at least limit, misuses of FIDIC conditions of contracts.

This document was prepared by TG15 to set out:

• FIDIC’s Golden Principles;
• The reason(s) why such principles are considered to be GPs;
• Guidance as to how users should draft PCs (Particular Conditions) and the other documents of a contract based on FIDIC’s GCs (General Conditions) so as not to violate or deviate from FIDIC’s Golden Principles.

FIDIC strongly recommends that the Employer, the Contractor and all drafters of the Special Provisions take all due regard of the five FIDIC Golden Principles, which are included in Guidance section of 2017 Contracts and are as follows:

“THE FIDIC GOLDEN PRINCIPLES“

GP1: The duties, rights, obligations, roles and responsibilities of all the Contract Participants must be generally as implied in the General Conditions, and appropriate to the requirements of the project.

GP2: The Particular Conditions must be drafted clearly and unambiguously.

GP3: The Particular Conditions must not change the balance of risk/reward allocation provided for in the General Conditions.

GP4: All time periods specified in the Contract for Contract Participants to perform their obligations must be of reasonable duration.

GP5: Unless there is a conflict with the governing law of the Contract, all formal disputes must be referred to a Dispute Avoidance/Adjudication Board (or a Dispute Adjudication Board, if applicable) for a provisionally binding decision as a condition precedent to arbitration.

These FIDIC golden principles are described and explained in the publication FIDIC’s Golden Principles (http://fidic.org/books/fidic-golden-principles-2019), and are necessary to ensure that modifications to the General Conditions:

• Are limited to those necessary for the particular features of the Site and the project, and necessary to comply with the applicable law;
• Do not change the essential fair and balanced character of a FIDIC contract;
• The Contract remains recognisable as a FIDIC contract.

Please go through the all sections (1 to 7) in the FIDIC GPs First Edition 2019 document including:

• General Considerations underlying the GPs.
• FIDIC Golden Principles
• Reasons for GPs.
• Guidance for Drafting PCs.

References:

1. 1. FIDIC Golden Principles First Edition 2019
   2. http://fidic.org/node/23379

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