Engineer, procure and construct contract

EPC (engineering, procurement and construction) contracts are frequently drafted to be turnkey agreements—the contractor builds the works and all the employer has to do is turn the key to the finished plant. The employer's aim in such contracts is to pass almost all of the potential risks inherent in the project to its EPC contractor with the contractor pricing the contract accordingly. Nevertheless, the contractor can still make claims under turnkey contracts in specific circumstances. This Practice Note considers the types of claims that EPC contractors can make, the procedure for bringing a claim or resolving a dispute regarding a claim and the points to consider when negotiating the contract in relation to such potential claims. Possible claims EPC contracts are generally drafted so that the majority of the risks rest with the contractor. There are good commercial reasons for this—price escalation can cause financing difficulties if funding for the project is insufficient to cover substantial price increases. Equally, the employer may have entered into agreements that require project completion by a certain date, eg where

EPC contracts are normally set up so that the contractor accepts much of the risk inherent in the project. The employer simply wants the project to be delivered on time and to perform according to specification, and leaves it to the contractor to work out how this should be done. The employer will usually have to pay a higher contract price as a result of this decision to pass most of the risks of the project onto the contractor. Having contracted to pay a premium price for the works, the employer will want to be sure that the project is actually completed on time and that it does perform according to the specification. The employer will want to be able to take action to ensure these things happen or to recover its losses if they do not. This Practice Note looks at the remedies the employer may have under the terms of an EPC contract. Delays to completion Under the terms of almost all EPC contracts the contractor will have a specific number of days in which

The concept of 'handover' under an EPC contract is of fundamental importance. It determines when the main obligations and duties of the EPC contractor come to an end and when the EPC contractor's potential exposure to delay damages ceases. It also delineates when the employer takes possession of (and usually responsibility for) the site and, often, when the facility is able to commence its commercial operations. Closely related to the concept of handover are those of testing and commissioning. The existence of such requirements under an EPC contract will, however, depend very much on the type of facility being constructed. If the facility involves infrastructure (be it a road or bridge) it is less likely that detailed testing and commissioning provisions will be required. On the other hand, if the facility includes complex mechanical and electrical equipment, testing and commissioning will be a necessity. In respect of power plants and multifaceted structures such as hospitals these concepts are therefore of great significance. Indeed, the more innovative and sophisticated the machinery or plant, the more

This Practice Note provides guidance on exclusions and limits of liability relevant to engineer, procure and construct (EPC) contracts. It should be read alongside Practice Note: Limiting liability in construction contracts, which provides more detailed information on limits of liability in general. A key consideration when reviewing any type of limitation or exclusion of liability clause in an EPC contract is the law applicable to the contract. This will often have a significant impact on both the interpretation and enforceability of the clause in question. It is outside the scope of this note to consider the various implications that may arise depending on the chosen jurisdiction, and references throughout this note will be to the implications under English law, unless otherwise specified. In drafting any type of limitation or exclusion of liability clause it is important that clear and unambiguous wording is used. Most EPC contracts include provisions limiting liability for the following reasons: • EPC contracts are frequently used for major infrastructure and complex facilities. As a result, there are usually huge financial implications

The European Payments Council (EPC) has launched a public call for interest to participate in the Single European Payments Area (SEPA) Payment Account Access (SPAA) scheme tactical pilot. This initiative is aimed at asset holders—ie account-servicing payment service providers (ASPSPs)—and asset brokers—eg payment initiation service providers (PISPs) or account information service providers (AISPs). Submissions of intent to participate are sought by 24 June 2024.

The European Payments Council (EPC) has launched a call for interest inviting Directory Service Providers to collaborate on routing verification for its verification of payee (VOP) scheme. Providers with BIC, National ID, or IBAN directory data are asked to apply by 18 July 2025. The initiative aims to test options for the IBAN-to-BIC mapping algorithm needed for accurate VOP request routing and verify the availability of the required dataset (Account Holding BICs) to ensure secure configuration of the EPC Directory Service (EDS) in line with EPC requirements.

The European Payments Council (EPC) is consulting on Single Euro Payments Area (SEPA) Request-to-Pay (SRTP) scheme rulebook change requests, and on change requests for all five EPC payment scheme rulebooks. Responses to all are sought by 9 June 2024.

The European Payments Council (EPC) has launched a public consultation to explore ways to support and facilitate the use of the Single Euro Payments Area (SEPA) instant credit transfer (SCT Inst) scheme at the point of interaction (POI). The consultation seeks feedback from stakeholders on using, offering, developing, and operating SCT Inst scheme-based payment solutions at the POI. This follows amendments to the SEPA Regulation by the Instant Payments Regulation to require the majority of payment service providers (PSPs) in the EEA to adopt SCT Inst by July 2027. Responses to the consultation are sought by 30 May 2025, with individual feedback to be provided by October 2025.

The European Payments Council (EPC) has launched the extended pilot phase of its EPC Directory Service (EDS) in the test environment. This phase is open to all Verification of Payee (VOP) scheme participants and qualified Routing and/or Verification Mechanisms (RVMs), and will run until the end of August 2025. Eligible Payment Service Providers (PSPs) and RVMs have been notified via email using the contact details provided in their VOP adherence documents or RVM agreements. The EPC intends to launch the EDS in Live (pre-production) mode in early September 2025, ahead of the VOP scheme’s entry into force on 5 October 2025. PSPs and RVMs participating in the pilot will be recognised in the Live platform without needing to re-register. The EPC intends to provide further information on the use of data entered during the pilot phase in due course.

The European Payments Council (EPC) has launched its first simplified homologation process for the SEPA Request-to-Pay (SRTP) scheme. This follows the 2024 change management cycle and market demand to streamline the SRTP scheme adherence process, particularly the homologation process. Under the Trust and Security Framework (TSF), Annex I of the SRTP rulebook, the EPC must ensure that all participants in the scheme possess the technical, operational, security and business continuity capabilities required to exchange SRTP messages. When an applicant submits adherence documents, the EPC verifies eligibility, confirms identity and determines whether homologation is required, and if so, which type applies. Payment service providers (PSPs) using a Referenced Technical Solution Provider (RTSP) are exempt from homologation.

The European Payments Council (EPC) has announced the opening of the adherence process for the Verification Of Payee (VOP) scheme. All current and future Single Euro Payments Area (SEPA) Credit Transfer (SCT) and SEPA Instant Credit Transfer (SCT Inst) scheme participants affected by the amended SEPA Regulation provisions on VOP must adhere to the VOP scheme, register into and fund the EPC Directory Service (EDS). The EPC has introduced three adherence waves to ensure a smooth process before the 5 October 2025 deadline, encouraging participants to start preparations early to avoid last-minute overload. The EPC has also published a toolkit for new VOP scheme participants.