MIDDLE EAST E-BULLETIN

NEW FIDIC MODEL REPRESENTATIVE

AGREEMENT
For a number of years, the International
Federation of Consulting Engineers ("FIDIC") has
produced standard forms for international
construction and engineering contracts. It has
recently expanded its range of contracts by
publishing a new Model Representative
Agreement, colloquially known as the "Purple
Book".

12 FEBRUARY 2014
Doha, Qatar

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The Model Representative Agreement is intended to be used where a consulting firm (referred to as the
"Consultant") appoints a representative (referred to as the "Representative") to perform certain services (referred to
as the "Representative Services") on its behalf in a foreign country. The Representative Services might be general
marketing and business development-related services or project-specific services, or both.
It may appear curious that FIDIC considered it necessary to complement its suite of construction and engineeringfocused contracts with the relatively focused Model Representative Agreement. However, the continuing growth of
the international construction market means that many consulting firms may be looking to promote themselves, and
ultimately win and conduct work, in jurisdictions in which they have no presence or in which they may face
difficulties in establishing a local presence. Such firms are likely to enter into arrangements with local firms for the
latter to represent them and assist them in:
identifying business opportunities;
bidding for projects; and
possibly, performing some services in connection with successful bids.
The Purple Book would be suitable for such arrangements.
In addition, FIDIC has included anti-corruption provisions in the Model Representative Agreement. These
provisions are intended to assist a Consultant in ensuring that it complies with the anti-corruption legislation in its
home jurisdiction, although they appear to have been drafted with the more onerous requirements of the UK
Bribery Act in mind (as opposed to the more traditional, but still stringent, legislation which continues to apply in
many jurisdictions in the West).

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The Model Representative Agreement is a simple document, although this does not detract from its utility. Its main
features (in its unamended form) are:
1. The Consultant appoints the Representative to perform the Representative Services in a specific country
for a fixed term.
2. The Representative Services are divided into two parts: "Normal Representative Services", which relate
to general business development services; and "Project-Specific Representative Services", which cover
services to be performed in connection with specific projects. Of course, additional services may be
added by the parties.
3. The Representative is expressly stated not to be an agent of the Consultant.
4. The Representative's remuneration is calculated by reference to the work done in connection with each
project, up to a maximum percentage of the Consultant's total fees on that project. However, the
Agreement includes a pay-when-paid clause, meaning that the Consultant is only obliged to pay the
Representative when it is successful on a bid and subsequently paid by its client. Although there is
provision for the Representative to be paid for work done in anticipation of a bid being accepted, such
payments must then be deducted from future invoices.
5. The Representative must comply with the Consultant's "integrity policy" and "code of conduct" (templates
for which have been included by FIDIC). It is also required to comply with all applicable laws, is prohibited
from offering any bribe or facilitation payment and is subject to various other anti-corruption provisions.
6. The Representative must obtain the Consultant's permission before engaging any subcontractor or
employee for the specific purpose of performing any of the Representative Services.
7. The Representative must not act for any competitor of the Consultant or for its own benefit in connection
with any specific project.
8. Any dispute which cannot be resolved at a meeting held in good faith must be referred to mediation and
then, if the mediation is unsuccessful, to ICC arbitration.
In conclusion, the new FIDIC Purple Book may be helpful for consulting firms seeking to appoint representatives in
foreign markets. However, the remuneration structure and extensive anti-corruption provisions, which go beyond
what is required in many jurisdictions, are unlikely to be acceptable to many potential representatives and may
require significant amendment.

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CONTACTS
Neil Brimson (Managing Partner)
Energy and Infrastructure, Qatar
T +974 4429 4101
M +974 6695 3071
neil.brimson@hsf.com

James Bremen (Partner)

Construction, Qatar
T +974 4429 4002
M +974 6698 6203
james.bremen@hsf.com

Joanna Addison (Partner)

Energy and Infrastructure, Qatar
T +974 4429 4102
M +974 5581 2619
joanna.addison@hsf.com

Mark Grasso (Senior Associate)

Dispute Resolution, Qatar
T +974 442 94015
M +974 3349 2629
mark.grasso@hsf.com

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Herbert Smith Freehills LLP 2014
The contents of this publication, current at the date of publication set out above, are for reference purposes only. They do not
constitute legal advice and should not be relied upon as such. Specific legal advice about your specific circumstances should
always be sought separately before taking any action based on the information provided herein.
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