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Streetwise Answers

I have belatedly taken responsibility for a contract and I am concerned about the current contractual position.

The job is approx. 45% complete and was scheduled to be handed over July 2011 and is now c. 6 months late. I believe that a claim had been submitted for EOT several months ago and failed, which is astonishing given the circumstances and will have to look into the detail.

The issue would appear to have been left to fester and has remained unchallenged for months.

Currently we have no revised contract programme or agreed end date from the main contractor as he is claiming he can't produce one until he gets clarification from the client (which is an invalid reason as far as I am concerned, our contract is with the MC) and are working from what I can see to piecemeal unofficial sectional programmes and are basically at the mercy of the MC and spending the money.

We have not been paid any prelims since last February, not one variation has been agreed and the job is therefore effectively at large.

I believe that at one point we exercised our suspension rights under the contract (FIDIC with some domestic conditions) and withdrew our labour. This did not gain us anything and at best put us further behind in terms of the available access instead of keeping tight.

Clearly we need to get order back into proceedings, therefore any advice you can offer would be greatly appreciated.

Gordon Hill Qatar


In order to advise you fully about this problem we will need some more information.

However, here are some initial thoughts, which are based on the assumption that the Form of Contract is a standard un-amended FIDIC 1999 Red Book, with “…domestic conditions…” added as mentioned.

 Please note the following:

1)     Time for Completion is clause 8.2 where the Engineer (in this case the Main Contractor) gives Notice of Commencement and (presumably) a Date or timeframe wherein Completion is intended.

2)     This is (as we are told) July 2011 based upon a ‘schedule’ for hand-over.

3)     The responsibility for submission of a programme (and any revisions) is with the Contractor, therefore if his own work is genuinely delayed by reason of an act of prevention by the Engineer (Main Contractor) or other expressly stated impediment, those would be cause to extend the Time for Completion and issue a revised Programme for the Contractor’s Works.

4)     Under clause 8.4 reasons for the giving of an Extension of Time are stated as (a) to (e) and include a variation, a cause of delay, exceptionally adverse weather conditions, unforeseeable shortages of personnel or goods and any delay caused by the Engineer (Main Contractor).

5)     Contractor has to claim under clause 20.1 to be granted an EOT, since this is not deemed an automatic result arising from the same reasons for the Extension of Time to be awarded.

6)     Clause 20.1 requires the Contractor to submit any claim within 28 days of the event arising or the time for Completion “…shall not be extended…” – a condition precedent.

7)     Submission should provide to the Engineer (Main Contractor) sufficient details of the cause and effect, meaning substantiation of ‘fact’ and demonstration of any period for which the Contractor is not culpable, showing concurrent delay where necessary.

8)     Following submission of detailed particulars within the 42 days, the Engineer (Main Contractor) must respond with a view / opinion.

If the above have been followed then several possibilities exist:

(a) the reason to grant an Extension of Time was insufficient, or

(b) the Notice was not given within the 28 days following the event arising, or

(c) the submission could not demonstrate with sufficient detail and supporting evidence a need to extend the Time for Completion.

 

Suspension, is a facility firstly of the Engineer (Main Contractor) under clause 8.8 and for the Contractor under clause 16, however the reasons for a legitimate suspension by the Contractor are where the Engineer (Main Contractor) has failed to carry out specific duties and these are limited to

(a) failure to certify

(b) failure to comply with clause 2.4

(c) failure under 14.7 (Payment).

 

Unless expressly stated there is no facility for suspension due to failure to grant an extension of time, so withdrawal of labour has effectively caused you to be partially culpable for the current delay.

Resolution of that delay would necessitate the remedy for claims under clause 20.1 where a failure by the Engineer (Main Contractor) to determine under clause 3.5 or clause 8.4 has not occurred and a dispute is the consequence.

That dispute under clause 20.2 will need to be sent to a Dispute Board or whatever other form of dispute resolution exists under the Contract, for determination.

My suggestion is that someone looks at all the paperwork surrounding this matter and especially the timing of the event and the corresponding timetable of the 28 days (Notice) and 42 days (provision of substance). If the Engineer (Main Contractor) has genuinely failed, one possible solution is to present a claim as a dispute under 20.2 and ask for an adjudicator to be appointed, although the downside is the withdrawal of labour in disputed conditions.

Depending on the law of the Contract (probably the Laws of Qatar) there may be civil remedy, although the law of any dispute is usually not the same and may well be under ICC or similar – this needs to be checked for a risk analysis of possible win/loss potential.

I would not agree (at this stage) the project ‘time’ is at large.

The Law in Qatar is civil, based upon the Sharia and the Courts will not usually be sympathetic towards Contractor’s claims when they have not followed the Contract, therefore a full review is required by an expert in this field with local (Gulf Region) knowledge and experience.

Prepared by Graham Cowley

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