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Eastern European rail contract dispute

Facts

Client: Government authority

Region: Eastern Europe

Industry: Transport (rail)

Issues:

A dispute arose, under an amended version of the FIDIC Yellow Book, between an Eastern European government authority and its contractor over the electrification and upgrade of a railway line. The contractor issued a notice of termination and sought an amended contract reducing the scope of works and adjusting the price. There were also potential funding issues with the European Investment Bank, if the authority had to retender the remaining works.

Solutions

Fenwick Elliott devised a strategy for the authority enabling the authority to understand the strengths and weaknesses of both parties’ claims and counterclaims. We then led negotiations on behalf of the authority to achieve a settlement, which included drafting amendments to the contract setting out a new scope of works and amending the payment agreement.

Benefits

The contractor was retained to finish a section of the works on agreed terms. The settlement included setting out new scope of works and amending the payment agreement.

Not only did the government authority avoid protracted arbitration proceedings, it also obtained a significant reduction in the scale of the contractor’s claims.