Construction Law/Performance Bond


In our Fidic red book contract we have a
Performance Security (Bank Guarantee) requirement as follows:

Procurement Reference No:

WHEREAS (hereinafter called “the Contractor”) has taken, pursuant to Contract No. dated  to supply (hereinafter called “the Contract).

AND WHEREAS it has been stipulated by you in the aforementioned Contract that the Contractor shall furnish you with a security issued by a reputable guarantor for the sum specified therein as security for compliance with the Contractor’s performance obligations in accordance with the Contract.
AND WHEREAS the undersigned, legally domiciled in [insert complete address of Guarantor], (hereinafter called the “Guarantor”), have agreed to give the Contractor a security.

Question is what do you mean by legally domiciled in and domicile in which country, is it in the Country where the project is executed?

There is also a write up in the special conditions as follows:

A foreign Bank providing the security shall have a correspondent Bank located in the country.

What do you mean by a correspondent Bank? What will this bank's responsibility?

Hello Wong,

Thank you for your question.

Firstly, as per definition   "Country" means the country in which the Site (or most of it) is located, where the Permanent Works are to be executed.

Legally domiciled is where the bank of another entity is seated/ registered.

Correspondent Bank is a local bank that has a partner bank in the Country.

Hope that answer your queries.

Construction Law

All Answers

Answers by Expert:

Ask Experts




Questions related to Civil Engineering Contracts, using FIDIC or other Conditions of Contract, concerning Procurement procedures and documents (pre-qualification, tendering and contracting) and Services/ Works Contracts implementation matters including Determinations, Payments, Time Extensions, VOs, Claims/Disputes. Additionally, questions related to dealing with International Financing Institutions. Can also answer questions in Romanian. Can not answer improperly formulated questions.


Over 20 years of experience in the field of design, works supervision, construction, management of aid funds and technical assistance for various types of contracts implementation, including severe conflictual contractual situations leading to Claims and disputes. Claims/ Contract management, Disputes adjudication, Arbitration.

Member of Romanian Professional Association of Roads and Bridges; Listed on President's List of Adjudicators of Romanian Association of Consulting Engineers Former member of the Disputes Resolution Board Foundation (DRBF) of United States – nominee on DRBF President’s Disputes Board Members List and of DRBF Chapter for Eastern Europe Former member of Polish Association of Consulting Engineers (SIDiR) – nominee on SIDiR President’s Disputes Board Members National List Member of “” volunteers pool Member of the "Constructions Disputes Resolution Services” International Panel of Construction ADR Specialists" of United States

- Graduate in 1994 the Construction Institute - Graduate of several FIDIC,Procurement and other courses - Graduate of first Disputes Board Members Mentoring Scheme ( - FIDIC Accredited Adjudicator

Past/Present Clients
- Several State organisations/Ministries , such as Ministry of Transport, National Admistration of Roads, Ministry of Regional Development (former Ministry of European Integration), Public Works and Housing, Central Contracting and Financing Unit in Romania and also in Turkey, Croatia and Macedonia - Numerous Western based private consultancy companies - full CV and other relevant information available at

©2016 All rights reserved.