FIDIC White Book: What Makes The Choice Of Background Law Important?

• Published date: 15 January 2024
• Subject Matter: Corporate/Commercial Law, Real Estate and Construction, Contracts and Commercial Law, Construction & Planning
• Law Firm: Kromann Reumert
• Author: Trine Gydemand Bielefeldt, Mia Thulstrup Gedbjerg and Cecilie Anthony Berno Hald

FIDIC White Book (FWB) is a set of rules offering an international counterpart to the Danish General Conditions for Consultancy Services for Building and Construction Works (ABR18). FWB is used in construction law in connection with consultancy agreements involving foreign parties. In this article we'll take at look at what you need to know in relation to background law (choice of law) if you wish to use or will be contracting under FWB.

What is FIDIC White Book?

FIDIC, short for Fédération Internationale des Ingénieurs-Conseils, has issued international standardised contracts, predominantly for the construction industry, since 1957. The FIDIC contracts are among the most frequently used standard contracts internationally in construction law.

FWB is a so-called "Model Services Agreement" and consists of general clauses (General Conditions ("GC")) and special clauses (Particular Conditions ("PC")). From the FWB foreword, we see that the authors intended for the GC to apply in more or less any contract, whereas the PC are provisions governing matters that will have to be decided on a case-by-case basis.

What makes the choice of background law important?

If you and your organisation want to use FWB, an internationally applied set of rules, it is important that you define the background law. That is, you define what law will apply if the standard FWB contract does not adequately regulate a given issue.

If you choose a background law other than Danish law, we recommend that you involve a local lawyer from the country whose background law you intend to use. That way your organisation and the parties involved under FWB will be sure to have the right understanding of the terms and concepts. The rules on limitation, for example, vary from one jurisdiction to the other and may potentially have a huge impact on your rights and claims. There are jurisdictions in which the rules on limitation in relation to defects are more favourable to clients than is the case in Denmark.

Differences in the interpretation of the terms and concepts in the individual clauses

FWB is first and foremost a contractual instrument. This means, for example, that the courts, when interpreting the parties' agreement, must apply national rules of interpretation on FWB and on the contract as such.

Example of the challenge of applying national interpretation rules

One example that amply illustrates the problem is the use of the term 'good faith' in FWB, GC clause 1.16. At first glance, the...