Construction Joint Venture Agreement

On February 6, 2020, Craig Shepherd, Global Head of Contentious Construction and Infrastructure, Head of Finance in Japan, Keith Gamble, and Resolution Dispute Associate, Victoria Green, held a seminar for members of the Overseas Construction Association of Japan on how to avoid joint venture litigation. In this month`s construction newsletter, we offer a summary of the main conclusions of this seminar and highlight the issues to consider when concluding a joint venture. This Agreement shall remain valid unless it is revoked in writing in writing with the signature of both parties. The Management Board shall approve all contracts prior to performance by authorised representatives of the Contracting Parties. Certain parts of a contract may be expressly awarded to one party or only one party (paragraph 8.4). Where a party has exclusive control of a contract, it is that party, not the joint venture, that is liable for cost overruns, unless this is due to the fault of the other party or circumstances beyond that party`s control (see clause 20 Force majeure). Note, however, that between the parties and a customer, both parties are jointly and severally liable to the customer (see notes to clause 4.3). This clause contains a number of standard boiler plate sub-clauses common to most commercial contracts (e.g. B prior agreements or warranties outside the agreement must be replaced/excluded, fluctuation agreements, exclusion of any rights a third party may have to enforce the agreement). The two companies or organisations wishing to join forces to jointly promote and implement engineering or construction projects should find this joint venture agreement useful for the construction project.

Tenders and contracts. There will be a procedure for the opening of tenders to the Board of Directors and for the award of contracts, and then for the performance of these contracts. The funds contributed to each contract are decided by the Board of Directors. In addition, a project manager is normally appointed to lead each joint venture project. Both parties present themselves as joint ventures for the purpose of carrying out and carrying out construction projects. Finally, it is essential for unregistered joint ventures to determine how the joint venture partners share responsibility for the owner`s claims. For example, is this attributed to each of the joint venture partners in proportion to their participation or should it be awarded on the basis of fault? There are many reasons why contractors may try to create a joint venture. In some cases, this is simply a business decision, as it allows a contractor to share the risk and increase its purchasing capacity, either with respect to a particular project or more generally. In other circumstances, it is necessary where contractors with particular skills or experience need to seek partners with other skills to demonstrate the breadth of experience indicated in the tender documents or where local legal requirements require contracting authorities to have specific local representation. .