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27 Int'l Bus. Law. 212 (1999)
Infrastructure Projects: Interlinked Contracts and Interlinked Arbitration

handle is hein.journals/ibl27 and id is 214 raw text is: Infrastructure Projects: Interlinked Contracts and Interlinked Arbitration? Contracts within the network as separate agreements Although all the contracts are geared to the realisation of the project, the individual contracts themselves are negotiated and concluded between the contracting parties and, therefore, remain legally separate contracts. The fact that sometimes there are explicitly agreed links between contracts concerning certain points does nothing to alter their fundamental status of being legally separate. The fundamental status of the contracts as separate legal agreements is also not altered by the fact that parties to contracts may sometimes take the form of a number of companies legally joined together as consortia, joint ventures or similar for the purpose of the performance of the given contract. Here too we are in the presence of a two- party contract, with one party represented by a number of associates united by the consortium agreement to form one contracting party. The problem In infrastructure projects, deviations from the performance of the project as originally planned are the most frequent source of disputes between contracting parties. As such disturbances typically affect the contractual relations of a number of different participants, the question arises whether the issue of responsibility among the various parties might not be settled via multi-party arbitration. Before we turn to this procedural question, we must first determine to what extent contracts pertaining to an infrastructure project are legally separate or interconnected. A network of complex long-term contracts The multiplicity of contractual relations are interlinked by the joint objective of realising the project. They form a network of complex long-term contracts. Given this connection, the idea suggests itself that contracts concluded in the framework of such a project should also be legally interlinked. Reasons for the status of legally separate contracts (1) The contract model underlying the law is based on a two-party contract. According to this model the two parties with their conflicting interests will arrive at a fair result, ie contractual justice. And the interests of third parties are legally not affected by such bilateral contracts, since the contract parties cannot oblige third parties. (2) An extensive legal connection between the large number of such project contracts would not be in line with the intentions of the contracting companies: because the items regulated in the individual contracts (works to be performed, payment, risk allocation, etc) are too diverse to be standardised; * because the companies involved in the project have knowledge only of the contract(s) they themselves have concluded so that a state of confidentiality exists in connection with the contractual relations obtaining within the network of contracts which corresponds to the intentions of the parties involved. International Business Lawyer May 1999

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