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Insight: RomaniaInternational focus on countries and sectors Issue 01, 2011Arbitration (Sub-Clause 20.6) – Animportant, although not obvious, changeas been introduced by the new conditionsof contract in relation to the arbitrationclause. Although Sub-Clause 20.6 has notbeen amended per se, Sub-Clause 1.4has been amended to the effect that thelanguage for communications under theContract is now Romanian. In practice,this means that by virtue of paragraph(c) of Sub-Clause 20.6, the language tobe used in any arbitration proceedingsis also Romanian unless this paragraph isamended.delay damages that have been paid shallbe reimbursed.Payments under the Contract shall notexceed 110% of the Accepted ContractAmount – regardless of the causes leadingto the additional costs (except in the eventof a price adjustments resulting from Sub-Clauses 13.7 [Changes in Legislation] and13.8 [Changes in Costs]).Delayed payment - The Contractor isdeemed to have waived its right to intereston late payment if no invoice is issuedwithin two months and the Employer is alsogiven an additional 45 days (in addition tothe 56 days from the Engineer’s certificate)before having to pay the Contractor.The Contractor’s right to suspend workhas been significantly restricted (Sub-Clause 16.1) – This can only be done after183 days from the Employer’s notificationas opposed to 21 days.Termination by Employer (Sub-Clause15.2) and by Contractor (Sub-Clause16.2) – Conscious that the exceptionallyhigh number of termination cases clearlyaffected the completion of major roadprojects in Romania, a solution wasfound by the Ministry of Transport withthe following amendment to Sub-Clause16.2: termination will only take effectafter having obtained a final and bindingDAB (which is unlikely to happen as theEmployer will undoubtedly issue a noticeof dissatisfaction) or an arbitral awardconfirming the Contractor’s entitlementto terminate and the effectiveness ofsuch termination. This means that theContractor is completely deprived inpractice from its right to terminate theContract as the Contractor will be requiredin the meantime, under the new conditionsof contract, to comply with its obligationsunder the Contract irrespective of its noticeof termination and the Employer’s failures.The above changes introduced by thenew FIDIC conditions of contract haveso drastically modified the original FIDICconditions of contract that one can nolonger describe them as either fair orbalanced. The pressure exercised recentlyby European contractors and organizationsrepresenting them for a rapid change inlegislation is a welcome move. Until thena number of experienced contractors nowrefrain from tendering for road projectsin Romania. This is obviously not in theinterest of Romania and certainly not of theEU which is financing a very large portionof these projects.Frederic Gillion, PartnerFenwick Elliott+44 (0)207 421 1986fgillion@fenwickelliott.com