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Transit Oil Pipeline, CIS Region

Facts

Client: Government corporation

Region: CIS region

Industry: Oil and gas

A number of potential disputes arose during the construction of a transit/trunk oil pipeline and pumping station. The sums in dispute were some US$200million. Fenwick Elliott was asked to advise the employer on the merits of its position in relation to the performance of the EPC contractors.

Issues & solutions

Working with local lawyers, we undertook a detailed review of the entire suite of contract documentation, including the EPC Contract terms and major supply contracts.

We were then able to advise the client on legal issues arising in connection with the project, including assistance with key contractual correspondence, advice on key contract terms, as well as working with the in-house team on the preparation of claims against the contractor.

It was also necessary to review the merits of the contractor’s claims for an extension of time and/or to claim additional direct or prolongation costs. This necessitated investigation into the provisions of the contract determining entitlements to additional time and cost, including procedural and notice requirements. We also needed to consider the existence of any float in the contract programme and/or whether there was any concurrent delay. In particular, it was suggested that delay resulting from employer interference had resulted in critical delay to subsequent procurement and construction activities.

Benefits

Once the client was in the position to fully appreciate its overall position, we were able to assist the client in round table negotiations to bring about a settlement.