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TABLE OF CONTENTS
 
Table of Contents...
Introduction...
  
Literature Review.....
 
Need for Contract and Regulations...
Construction Contracts and Claims ....
  
Conclusion
 
Objectives...
 
Methodology.
 
 
Data Collection & Analysis
CLAUSES THAT ENTITLE CONTRACTORS TO CLAIM AGAINST EMPLOYERS...... 10
1.9 Delayed Drawings or Instructions ....
  
 
2.1 Right of Access to Site.
 
 
 
  
  
4.7 Setting Ot. cnnnnnnnnnneninnininninininnnnnninnnninnninnnniennnnennie 4
4.12 Unforeseeable Physical Conditions ......00 15
4.24 Fossils... 16
7.4 Testing 7
8.4 Extension of Time for Completion .. 18
8.9 Consequences of Suspension... 19Page |2
10.2 Taking Over of Part of the Works. 20
 
1033 Interference with Tests on Completion...
 
13.1 Adjustment for Change in Legislation
16.1 Contractor's Entitlement to Suspend Work 22
 
17.4 Consequences of Employer's Risk sone
18.1 General Requirements for Insurances. 24
 
19.4 Consequences of Force Majewte....
CLAUSES THAT ENTITLE EMPLOYERS TO CLAIM AGAINST CONTRACTORS... 27
4.19 Electricity, Water and Gas 27
 
4.20 Employer's Equipment and Free-Issue Materials
7.5 Rejection 29
7.6 Remedial Works.
 
8.6 Rate of Progress...
 
8.7 Delay Damages 31
9.4 Failure to Pass Tests on Completion...
 
11.3 Extension of Defects Notification Period 32
11.4 Failure to Remedy Defects.
 
 
15.4 Payment after Termination ......
 
18.1 General Requirements for Insurances. 34
PROCEDURE OF HOW A CONTRACTOR CAN MAKE A SUCCESSFUL CLAIM ove 36Page
PROCEDURE OF HOW AN EMPLOYER CAN MAKE A SUCCESSFUL CLAIM
PROCEDURE OF HOW ARBITRATION CAN BE COMMENCED ivsinsssnnsntnsest
Conelusions
Recommendations.
Bibliography
 
 
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38
40
41Page |4
INTRODUCTION
 
In most construction contracts issued in Trinidad and Tobago, the FIDIC line of Contract
Conditions is vastly utilitized. That is provided a company does follow their own tailored
construction contract format, These FIDIC contracts outline measures and procedures that all
parties entering the contract shall abide by to ensure said contract is executed fairly,
transparently and effectively.
This report analyses some key aspects of one of the FIDIC Conditions of Contract, namely; The
1999 FIDIC Red Book: Conditions of Contract for Construction, The elements being analysed
related to claims; that is, what conditions are required for either Contractor or Employer to make
a claim to the other party, how do said parties go about making the claim, and provided a dispute
arises, what is the process of settling the dispute.
Claim — “A demand or request for something considered one’s due”
-Osford Dictionary
The statement above is a simple but accurate definition of a claim under the FIDIC Conditions of
Contract. Once the Employer or the Contractor for any reason feel entitled to compensation
(money and/or time) for any events imposed onto them this can be described as one’s due. At
this point, either party must now follow the procedure given in the FIDIC book and proceed to
make such claim, The FIDIC Conditions of Contract however outline in its many sub-clauses,
under what circumstances either party becomes entitled to compensation; once the conditions are
met, only then can the claiming party be compensated. A further analysis on these clauses and
procedures for claiming shall be presented in the report.LITERATURE REVIEW
 
Need for Contract and Regulations:
‘© Australian mining companies are linked to hundreds of deaths and injuries in Africa, which can
go unreported at home.
‘+ Inall, reporters counted more than 380 employees, subcontractors and community members in
13 countries who died in accidents or incidents linked to the companies since the beginning of
2004
© "There is a very strong perception that when Australian mining companies come here they take
every advantage of regulatory and compliance monitoring weaknesses, and of the huge disparity
in power between themselves and affected communities, and aim to get away with things they
would’ even think of tying in Australia," Tracey Davies, attorney with the Centre for
Environmental Rights in Cape Town.
Will Fitzgibbon, Companies Accused of Taking Advantage of Regulatory Weakness’, 2015
The above extracts were taken from an online article which goes on to discuss the negative effects
Australian Mining Companies are having on the people and environment of Africa, were a number of
these mining companies are located. The article highlights that many incidents occur, as a result of the
mining companies and their subcontracted companies taking advantage of the lack of proper regulation in
Africa and their lack of ability to ensure compliance. This breach resulted in a number of the incidents in
which the mining companies distanced themselves from liability.
This article suggests the importance of having some legal authority to clearly define who accepts liability
for certain aspects of works when entering into a contract. Together with this, it is also important to have
a body willing to enforce the regulations of the contract. In so doing, parties shall be more encouraged to
execute their aspect of the contract in a more fair and lawful manner; and if not it will ensure fair relief is
due to the other affected party.Page |6
Construction Contracts and Cl
 
“4 construction contract is a mutual or legally binding agreement between two parties
based on certain policies and conditions generally recorded in documentation form. The two
parties involved are one or more owners, amd one or more contractors.”
Wikipedia
The FIDIC suite of Conditions of Contract is a vasily utilized form of construction contract.
According to Jeremy Glover’s, “FIDIC an overview: the latest developments, comparison,
claims and a look into the future", these books were developed by the organization FIDIC.
Originally as one book resembling the English construction law conditions, the contract was
   
eventually made into more in 1963. This was so to accommodate cases where the Contractor did
designs together with works for the Employer. As time progressed, more books were introduced
to cover different dimensions of construction and procurement.
The 1999 suite of FIDIC Conditions of Contract books now allocates risks and responsibilities to
both parties entering into the contract in a fair manner. The contracts go on to give conditions
where either party becomes entitled to compensation due to the action or inaction of the other
party or extemal sources. It also describes the procedures that shall be adhered to in making a
lait
  
n for the compensation. This report goes on to analyse these procedures and claims
“A claim is a request for compensation not anticipated in the terms of the original
contract.”
The National Academy of Science, Reducing Construction Costs: Uses of Best Dispute
Resolution Practices by Project Owners, 2007Page |7
The authors of the book sought to reduce the amount of claims and disputes occurring in the
construction industry in the United States as it takes up time; is very costly; and is
counterproductive. In doing so they thought it best to determine the leading causes for disputes in
an attempt to sought the answer to reducing disputes. Through a survey done, the results yielded
that the primary drivers of claims were:
# Increased profit pressure on Contractors
# Poorly developed contracts
# Increasing risk allocated to Contractors
© Inadequate owner involvement
Overly aggressive schedules
Conclusion
Although there is a need for contracts and regulations to exist between parties entering into an
 
agreement to ensure proper performance, the contract may possibly lead to numerous disputes
and claims in various ways.
This report is geared into analyzing the FIDIC 1999 Conditions of Contract for Construction:
Red Book. In so doing, it shall analyse the grounds on which either party entering into the
agreement shall be able to claim, how they go about claiming and provided a dispute arises, their
possible options of settling it.Page |8
OBJECTIVES
 
To analyse and discuss the grounds in which Contractors shall be entitled to claim against
Employers as per the sub-clauses in the FIDIC 1999 Red Book: Conditions of Contract
 
for Construction.
To analyse and discuss the grounds in which Employers shall be entitled to claim against
 
the Contractors as per the sub-clauses in the FIDIC 1999 Red Book: Conditions of
Contract for Construction.
To examine various construction law cases in an attempt to verify some of the sub-
clauses mentioned above
To outline the procedure for a Contractor to make a successful claim and produce a flow
chart to represent this procedure.
To outline the procedure for an Employer to make a successful claim and produce a flow
chart to represent this procedure.
To outline the procedure required to commence arbitration and produce a flow chart to
represent this procedure.Page |9
METHODOLOGY
 
‘The FIDIC 1999 Conditions of Contract for Construction: Red Book shall be read
 
and all clauses which gives the Contractor or the Employer entitlement to claim shall be
selected, analysed and discussed.
Cases relevant to the sub-clause shall be sought, analysed and included in the discussion
where applicable.
Sub-clauses 20.1(Contractor’s Claim) and 2.5 (Employer's Claim) shall be analysed;
subsequently the process for either Contractor or Employer to make a successful claim
shall be outlined by bullet points and a flow chart.
Sub-ciauses 20.4 (Obtaining Dispute Adjudication Board's Decision) and 20.5 (Amicable
Settlement) shall be analysed and the process for commencing arbitration shall be
outlined ad represented in a flow chart.10
~
DATA COLLECTION & ANALYSIS
 
a) Examine a FIDIC 1999 Conditions of Contract (state clearly which Form you are usin;
 
FIDIC 1999 RED BOOK: CONDTIONS OF CONTRAC FOR CONSTRUCTION
i. Identify the clauses under which the Contractor may be entitled to claim against the
Employer. Analyse and discuss in respect of each clause the grounds under which the
Contractor is entitled to claim
CLAUSES THAT ENTITLE CONTRACTORS TO CLAIM AGAINST EMPLOYERS
The following is a tabulated list of all the sub-clanses under which the Contractor is entitled to
claim against the Employer:
‘Table 1 listing the sub-clouses in the FIDIC-1999 Red Book, in which a Contractor is entitled 1 claim against an Employer
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Sub-Clause Clause Title Page No.
19 Delayed Drawings or Instructions 7
2 Right of Access to the Site 89
47 Setting Out 15
42 Unforeseeable Physical Conditions 16-17
424 | Fossils 20
74 Testing 24-25
84 Extension of Time for Completion 77
8.9 ‘Consequences of Suspension 29
10.2 Taking Over of Parts of the Work 31-32
13.7 | Adjustment for Change in Legislation 39
16.1 ‘Contractor's Entitlement to Suspend Work 8
17.4 | Consequences of Employer's Risk 2
18.1 Insurance
19.4 | Consequences of Force Majeur 37uu
~
1.9 Delayed Drawings or Instructions
 
Description: The Contractor has not been issued drawings, specifications or instructions, etc. as
 
yet and as a result foresees that this may delay or disrupt the scheduled programme of the works.
The Contractor at this point shall give notice to the Engineer within reasonable time to inform
him/her that the delayed passing over of the relevant information will incur a delay on the works.
This notice shall be accompanied by documents giving evidence to how the lack of information
will delay the works and to what extent. The supporting documents shall also inform the
engineer of what specific drawings, specs and instructions are required and shall further specify a
time in which it should be handed over.
Should the Engineer fail to hand over the information by the time specified in the initial notice
given by the Contractor, and the Contractor incurs delays or costs as a result of the this, the
Contractor shall then give notice to the Engineer claiming as per Sub-Clause 20.1 (Contractor's
Claims).
Entitlement: The Contractor shall be entitled to an extension of time for completion for all
delays incurred as per Swb-Clause 8.4 (Extension of Time for Completion). The Contractor shall
also be entitled to payment of any cost plus reasonable profit. The cost shall be stated in the
Contract Price
If failure in submitting the documents was as a result of any error due to the Contractor however,
the claim now becomes void. The Contractor can no longer claim for time, cost or profit,
Analysis: As can see in the description above, a Contractor must give notice beforehand stating
that delayed documents will adversely affect the progress of the works. It cannot be that after the
delay or disruption has affected the Contractor can he now then claim for losses. It must be2
~
shown to the Engineer, with a notice and documents to support, how and to what extent the delay
will affect the works. This then emphasizes the necessity for Contractor’s to keep records while
works are progressing.
“The most common reason why a contractor is unable to obtain an extension of time or recover
additional costs for delays and disruptions to a project is that there is insufficient evidence to
support its claim, While it may be possible to support a claim with evidence created after the
event, such as witness statements and retrospective analysis, these will be of little help if they
are not based on contemporaneons records of whst happened at a particular time.”
 
“In AG Falkland Islands v Gordon Forbes, the term ‘contemporary records’ was held 10
mean “original or primary documents, or copies thereof, produced or prepared at or about the
time gi
 
g rise to a claim, whether by or for the contractor or employer”
The above two (2) quotes were taken from a commentary done by Herbert Smith Freehills LP's
Emma Kratochvilova, 2009, United Kingdom about the importance of record keeping. Records,
whether pictures, invoices, progress reports, letters, etc., shall always be kept up to date with the
 
progress of the works. Without it, the Contractor's claim becomes void.
Furthermore, the Contractor cannot delay the process of receiving the documents in an attempt to
ensure the Engineer misses the deadline date set; if such is the case the claim can also be voided.
2.1 Right of Access to Site
Description: The Contractor has not been given access to the site, plant, equipment or particular
area(s) of site as had agreed upon in before a time and in a manner stated in the contract; and if
no time was stated in the contract, delivered at a time where it affected the progress of the works.1B
~
If at this point the Contractor then suffers delays and/or incurs additional cost due to late
possession of site to the fault of the Employer, the Contractor is now entitled to claim. The
ineer and claim under Sub-Clause 20.1 (Contractor's
  
Contractor shall give notice to the E
Claims).
Entitlement: The Contractor shall be entitled to an extension of time for completion for all
delays incurred as per Sub-Clause 8.4 (Extension of Time for Completion). The Contractor shall
also be entitled to payment of any cost plus reasonable profit. The cost shall be stated in the
Contract Price,
If the delay in gaining access to site is, however, at fault of the Contractor, he/she is no longer
entitled to claim.
 
‘is: The Employer must deliver the site as agreed in the Contract. The only grounds on
which the Employer can withhold the site are provided he/she does not receive the Performance
Certificate or whether another agreement was made. This clause applies also for all equipment
and plant the Employer has due for the Contractor as per the Contract.
In this clause, the Employer has to hand over the site and/or all equipment, plant and material
 
due to the Contractor as per the contract. A deadline date is usually provided in the contract for
when this is to be done by: if a date is not given, this shall be done by a date and time that will
not affect the scheduled programme of works. If the Employer fails to hand over the site, or
hands over the site at a time where the programme is affected, and delays and costs are incurred
onto the Contractor, only then can he/she claim. This is unless of course the reason for the delay
of hand over of the site is due to the Contractor, such as late submission of Performance
Certificate, ete.4
~
The Contractor shall give notice to the Engineer of all intention to claim at this point. The
Contractor is entitled to claim back for time, cost and reasonable profit,
4.7 Setting Out
Descriptior
 
‘The Contractor shall perform all works using all Lines, levels and references set by
the Employer. The Contractor shall also be responsible for correcting any errors seen in the
levels and references. These errors are still however the responsibility of the Employer.
Provided that the Contractor experiences delays or incurs cost as result of erroneous levels and
references, where the errors are such that an experienced Contractor could not notice the error
and resolved it him/herself; the Contractor is entitled to claim as per Sub-Clause 20.1
(Contractor's Claims). Notice shall be given to the Engineer
Entitlement: The Contractor shall be entitled to an extension of time for all delays incurred as
per Sub-Clause 8.4 (Extension of Time for Completion). The Contractor shall also be entitled to
payment of any cost plus reasonable profit, The cost shall be stated in the Contract Price
The Engineer shall determine whether or not the error could have been reasonably discovered.
Analysis: The Contractor is responsible for checking the lines, levels and references before
proceeding with works. If delays and cost incurs due to wrong reference information, the
Contractor can only claim if the error could not have been reasonably seen by the Contractor.
‘The Engineer shall make this determination, Hence the Contractor shall always make an effort to
correct all errors if present.~
a
4.12 Unforeseeable Physical Conditions
Physical Conditions:
* Natural Physical Conditions
Manmade Physical Conditions
+ Pollutants
* Subsurface and Hydrological Conditions
Description: If the Contractor encounters any physical conditions on the site that have not been
foreseen, he shall immediately give notice to the Engineer. This notice shall describe the
conditions met with, how the condition may be deemed as being unforeseeable and how it may
affect the progress of works. The Engineer shall then instruct the Contractor how to move
forward with the works to suit the physical conditions. All works not affect by the physical
conditions shall proceed as before. Any variation from the Contracted works shall be treated
under Clause 13 (Variations). All works proceeding shall be carried out in a safe manner
considering the effects of the physical condition.
If dealing with the unforeseeable physical condition, as per the Engineer’s instruction, incurs
additional cost and delay to the Contractor, he/she shall then give notice to the Engineer and
claim as per Sub-Clause 20.1 (Contractor's Claim). This is wuless the Contractor is at fault for
the delay and/or cost.
Entitlement: The Contractor shall be entitled to an extension of time for all delays incurred as
pet Sub-Clause 8.4 (Extension of Time for Completion). The Contractor shall also be entitled to
payment of any cost. The cost shall be stated in the Contract Price16
~
The Engineer shall be responsible for determining whether the condition can be deemed as
unforeseeable or not. The Engineer shall also determine to what extent the works have been
 
affected by the condition,
Provided multiple aspects of the works have to be altered due to the physical condition, and
cheaper alternative methods can be employed to perform the works, this savings can be used to
offset the increased cost in other aspects. The new cost, however, shall not reduce the total
project cost to a sum less than the original project cost.
Analysis: Based on commentary done by Herbert Smith Freehills LLP's Mark Lloyd-Williams,
Ann Lovin and David Nitek, 2014, on the case “Obrascon Huarte Lain SA v Attorney-General for
Gibraltar” where a Contractor encountered a chemical pollutant on site, the Contractor was
found not entitled to claim for time, cost or profit. This was so as the Contractor is responsible,
before tendering, to determine all reasonable foreseeable physical conditions. Furthermore, a site
investigation report done by the Employer stated that the site may have contained some
contaminated material, This statement passed the responsibility onto the Contractor to make an
intelligent assessment of the site and cater for it when developing the tender price. The physical
condition in this event will now be termed foreseeable.
Asa result, Contractors must make a concerted effort to inspect sites and insure to determine all
present physical conditions.
4.24 Fossils
Description: Any artifacts found on site that may pose any geological and/or archaeological
ive
 
interest shall be placed under the care of the Employer. The Contractor shall immediately g
notice to the Engineer of the find and shall further ensure, within reason, that all its personnel7
~
and other persons do not damage or remove the findings. The Engineer shall then instruct the
Contractor on how to proceed. Once the Contractor experiences any delays or cost incurrence
due to the instruction given by the Engineer, he/she shall give notice to the Engineer and claim as
pet Sub-Clause 20.1 (Contractor's Claim). If the delays ot costs are of the Contraetor’s fault,
then the Contractor is not entitled to make the claim.
Entitlement: The Contractor shall be entitled to an extension of time for all delays incurred as
per Sub-Clause 8.4 (Extension of Time for Completion). The Contractor shall also be entitled to
payment of any cost. The cost shall be stated in the Contract Price
Analysis: The Contractor is only entitled to claim if he/she experiences delay or incurs cost from
following the instructions given by the Engineer on how to proceed after finding the artifact.
This shall include if the Contractor has to provide additional security for the artifact or special
thee artifact. This shall also include whether the
 
equipment for extracting and securi
Contractor has to adopt any special methods to continue with construction in a manner not to
endanger the artifacts. The Contractor is, however, entitled to claim for time and cost incurred:
no profit can be claimed for. This is because no breach in Contract was done by either party.
Since the site is the Employer's own, however, they are responsible for the artifact and as such
must then reimburse the Contractor for all additional provided in dealing with the artifact.
 
: This clause states that the Contractor is responsible for providing all required
equipment for performing the tests, including personnel. The Contractor and the Engineer shall
agree on the location where testing shall occur. The Engineer shall give the Contractor 24 hours’18,
~
notice before attending all tests. Once notice is given, even if the Engineer is not present, the
Contractor may proceed with tests unless the Engineer gives other instructions,
If these new instructions from the engineer causes the execution of the tests to be delayed, and
this delay incurs cost and delays on the Contractor, he/she shall give notice to the Engineer and
claim as per Sub-Clause 20.1 (Contractor's Claim)
Entitlement: The Contractor shall be entitled to an extension of time for all delays incurred as
pet Sub-Clause 8.4 (Extension of Time for Completion). The Contractor shall also be entitled to
payment of any cost and profit incurred. The cost shall be stated in the Contract Price.
Analysis: The Contractor shall only be able to claim, in this case where after a date and location
is agreed upon by both parties, if the Employer does anything that offsets the execution of the
testing and delay and/or cost are incurred on the Contractor. Employer’s fault can include but is
not limited to any instruction given by the Engineer to change location, time, etc. If the
instruction does not incur cost or delay, the Contractor is no longer entitled to claim. If the delay
and cost incurred in response to the Engineer’s instruction is the fault of the Contractor, they will
no longer be entitled to claim.
8.4 Extension of Time for Completion
Description: The Contractor shall be entitled to claim for an extension of time as per Sub-Clause
20.1 (Contractor's Claim) for multiple cases as follows’
a) Variation (unless an adjustment to time for completion is agreed upon for the Variation)
b) A cause of delay which entitles the Contractor to and extension of time as stated in
various sub-clauses in the FIDIC book.
©) Exceptionally bad climate19
~
d) Unforeseeable shortages in personnel or equipment and material required to complete
works due to epidemic or governmental actions
¢) Any delay caused by action or inaction of the Employer or personnel under the
Employer's care,
Entitlement: The Contractor shall give notice to the Engineer and be entitled to an extension of
time for completion.
Anal
 
sis: The Contractor shall only be entitled to an extension of time if the above mention
occurs and causes a delay in the work that could not have been foreseen, prevented or overcome.
This includes all of the sub-clauses indicated in this report which entitles the Contractor to claim.
In the case of “Obrascon Huarte Lain SA v Attorney General Gibraltar", the Contractor claimed
 
that an extension of time for completion should be granted on the premise that the adverse
weather (rain) had delayed the works. The claim was however denied as no notice was given
within 28days of being affected by the rain. The Contractor argued that a letter stating that the
rain was upholding the works was sent to the Employer. The decision however ruled that the
letter cannot be considered as giving notice as it showed no intention of claiming.
As such the Contractor shall always be aware of limiting time bars as they may be the reason for
losing out on one’s entitlement.
8.9 Consequences of Suspension
Description: The Engineer has the right to suspend work has seen fit as per Sub-Clause 8.8
(Suspension of Work). If the Contractor incurs cost and/or delays due to the suspension of works,
the Contractor shall give notice to the Engineer and claim as per Sub-Clause 20.1 (Contractor's
Claim)20
~
Entitlement: The Contractor shall be entitled to extension of time as per Sub-Clause 8.4
(Extension of Time for Completion) and payment of all cost incurred.
Analysis: The Contractor shall only be entitled to claim provided the suspension of work
instruction was not given due to fault done by the Contractor. If the Contractor is at, fault, he
shall no longer be entitled to claim.
10.2 Taking Over of Part of the Works
 
Description:
 
When works or a section of works are completed, the Employer has to ‘take over”
the works via a certificate issued by the Engineer, If for whatever reason the Employer takes
over and uses that aspect of the works prior to the issuing of the certificate and the Contractor
incurs cost as a result of this, he/she can claim. This is so unless it is stated in the contract that
the Employer is allowed to use that aspect of works without the issuing of the certificate, The
Contractor at this point shall give notice to the Engineer and claim as per Sub-Clause 20.1
(Contractor's Claim).
Entitlement: The Contractor shall be entitled to payment of all costs incurred plus reasonable
profit. All of which shall be stated in the Contract Price.
Anal
 
jis: The Employer should know beforehand of any intention to use an aspect of the works
prior to the issuing of the contract. This is so that the Employer can include in the contract
provisions for use of the part of works immediately afier construction. The Contractor shall be
entitled claim if no such condition was included in the contract and the Employer uses the works
before the take over certificate is issued and incurs additional cost on the Contractor.
In the case of Doosan Babcock Limited v Comercializadora de Equipos y Materiales Mabe
Limitida (2013) The Employer, Mabe, contracted Doosan to supply two (2) boilers. Doosan hadPage |21
to give two (2) performance guarantees in the form of bonds which could have expired by a letter
from Mabe stating that Doosan had not met its obligations. The bonds could also have expired on
the issue of the Take Over Certificate, which ever had occurred first. Mabe had then sought to
claim on the bonds for some miss—hap when Doosan appealed for an injunction to withhold the
claim. This was on the premise that Doosan had already delivered the boilers and it had already
been put to use and as such a take over certificate should have been issued causing the bond to
expire. The expired bond would mean Mabe can no longer lay claim to payments from it.
Mabe however responded stating that there was a clause in the contract which allowed for their
temporary use of the boilers before issuing the certificate, Doosan ultimately led the court to
believe that Mabe’s use of the boilers were not temporary: and as a result the ruling finally led to
the court awarding Doosan the interim injunction on Mabe to claim for payment.
In this issue, while the Employer had a clause in the contract to support its use of the works
before issuing the take over certificate; it was found that it had gone beyond what was allowed
for. Ultimately the claimant (Contractor) was given favor over the Employer.
10.3 Interference with Tests on Completion
 
Description: If the contractor is prevented from performing the Tests on Completion for more
 
than 14days by the action or inaction of the Employer, The Employer is said to have “taken
over” the works, As such the Engineer must then issue a “take over” certificate and the
Contractor shall then perform the tests on completion as soon as possible after a 14 day notice
given by the Engineer instructing so. If the Contractor experiences any delays or costs as a result
 
of the delayed testing, he/she shall give notice to the Engineer and claim as per Sub-Clause 20.1
(Contractor's Claim).2
~
Entitlement: The Contractor shall be entitled to an extension of time and costs with reasonable
profit
13.1 Adjustment for Change in Legislation
 
Description: Provided any laws of the country in which the contract is based are altered, the
contract price shall be adjusted to suit. If the Contractor endures any delays or incurs cost as a
result of these changes in law or interpretation of the changes, he/she shall give notice to the
Engineer and shall be entitled to claim as per Sub-Clause 20.1 (Contractor's Claim).
Entitlement: The Contractor shall be entitled to extension of time and payment of cost, no
profit, This shall be reflected in the contract price,
16.1 Contractor’s Entitlement to Suspend W,
If the Contractor fails to get payment in a manner as agreed upon by fault of the Employer as per
(Sub-clause 2.4 Employer's Financial Arrangemems or Sub-clause 14.7 Payment) ot the
Engineer as per (Sub-Clause 14.6 Issue of Interim Payments), the Contractor has right, after
giving 21 days notice, to slow down or suspend works. This can be done until termination of
contract or until payment and/or reasonable evidence of payment has been given to the
Contractor, at which point work shall immediately recommence. If the Contractor experiences
delays and/or incurs cost as a result of the suspended or slow works, he/she shall give notice to
the Engineer and shall be entitled to claim as per Sitb-Clause 20.1 (Contractor's Claim).
Entitlement: The Contractor shall be entitled to extension of time and payment of cost and
reasonable profit. This shall be reflected in the contract price,
Analysis: According to case “NH International (Caribbean) v NIPDEC’ NH Intemational
(NHIC) was contracted by NIPDEC to build the Hospital in Scarborough, Tobago. NHICPage |23
suspended the works due to that fact that reasonable evidence of payment was not presented
when requested as per Sitb-Clause 2.4. This claim, together with others which would not be
referenced, had reached to the arbitration stage after and impasse between the two. The ruling
was in favor of NHIC where the arbitrator ruled that NHIC rightfully terminated the contract as
reasonable evidence to payment was not provided by NIPDEC. NIPDEC carried this claim to a
higher level which was the High Cout where they appealed to remit the arbitrator's ruling
stating that they believed that they had given NHIC reasonable evidence that payments could be
made.
NIPDEC’s appeal to remit was on the grounds that a letter sent to NHIC dated in 2005 stating
simply that the government of Trinidad and Tobago was “in full support of the project” and fully
capable of making payments, however cabinet’s approval had not yet been given. NIPDEC also
appealed that the arbitrator erred in his interpretation of Sub-Clause 2.4 and requires too much of
 
what supposed to be “reasonable evidence”. The High Court ultimately ruled that they had
agreed on the arbitrator's ruling that said the letter dated 2005 did not fulfill the requirements of
“reasonable evidence” as it showed no active movement to payments were being made and as
such, the contract was rightfully terminated.
“The mere fact that am Employer is wealthy is inadequate for the purposes of Sub-Clause
2.4. Similarly, the mere fact that an Employer has good reasons for wanting a project
completed does not itself mean he has made and maintained the necessary financial
arrangements. Accordingly, the evidence given at the hearing to the effect that the GORTT
has very substantial funds is, prima facie, insufficient by itself for satisfving 2.4.”
[76] (a) NHIC vs Nipdec, 2008~
NB. (GORTT-Government of the Republic of Trinidad and Tobago)
As can be seen, the Contractor has a right to slow down or suspend works provided that payment
or explicit and reasonable evidence that payment is being arranged is provided by the Employer.
17.4 Consequences of Employer's Risk
Description: If the Contractor loses any documents, works, goods or incurs any damage as a
result of the risks mentioned in Sub-Clause 17.3 (Employer's Risk), the Contractor shall
immediately give notice to the Engineer and shall rectify this issue to the extent instructed by the
Engineer. If the Contractor experiences any delays of incurs any costs as a result of rectifying the
issues, he/she shall give notice to the Engineer and shall claim as per Sub-Clause 20.1
(Contractor's Claim).
Entitlement: The Contractor shall be entitled to an extension of time and payment of cost. In the
event of sub-sections () and (g) of 17.3, reasonable profit shall also be paid.
Analysis: The insurance company shall be responsible for paying the costs incurred for sub=
sections (a) ~ (e) waless of course the insuring party is the Employer and they fail to attain
coverage for the acts. In this case, the Contractor shall claim against the Employer
18.1 General Requirements for Insurances
Description: Both parties entering into a contract are required to be insured; one party shall be in
the insuring party who will take responsibility for liaising with the insurer and taking out a policy
which will cover both parties. If the Contractor is the insuring party, the Employer shall first
approve of the insurer and policy before it is taken. The terms of agreement for the insurance
shall be agreed upon before entering into the contract. The insuring party is responsible for
letting the other party know of any changes and/or events affecting the policy made by the~
a
insurer. Both parties shall agree on a change they may want to make on the insurance before it is
made. The insuring party is also responsible for ensuring the policy is upheld and not lapsed
Additional parties joining the insurance, such as Sub-contractors or the Engineer, shall do so
under either of the two (2) initial parties. As such the two (2) initial parties are responsible for
correlating all dealings between the insurer and the sub-parties.
The insurance shall pay all cost for losses and damages ensued that are covered under the policy
to either Party suffering the loss. Any amount due that is not paid by the insurer shall be carried
by the party itself. This is unless the insuring party fails to effect and insurance which is
available and is required to effect and the other party does not approve the omission nor is
further covered for this default; the recoverable money shall be paid by the insuring party. The
other party shall claim for the payment as per the relevant claim clauses: Sub-clause 2.5
  
(Employers Claim) or Sub-clause 20.1 (Contractor's Claim).
Entitlement: The other party, be it the Employer or the Contractor shall be entitled to payment
of all costs recoverable under a policy unless the insurer, for a reason of its own, does not pay the
amount recoverable. This loss is carried by the claiming party.
Anal
 
js: The only grounds on which the other party (either Employer or Contractor) can claim
against the insuring party is where the insuring party fails to effect the policy when they are
required by the contract to do so. If the other party is unsatisfied with the insuring party not
effecting the policy and is not covered for this default, the money that is recoverable can be
claimed for against the insuring party.~
&
19.4 Consequences of Force Majeure
 
Description: If the Contractor is prevented from fulfilling any obligations to the contract under
 
Force Majeure and suffers delays and incurs cost a s result, the Contractor shall give notice to the
engineer and shall be allowed to claim as per Sith-Clause 20.1 (Contractor's Claim).
Entitlement: The Contractor shall be entitled to an extension of time for completion and
payment of cost, no profit. No payment of cost shall be made if the Force Majeure is a natural
disaster such as earthquakes, hurricanes, typhoons or volcanic activity,
Analysis: Force Majeure shall be and event which:
a) Is beyond a party’s control
b) Such party could not reasonably have foreseen and catered for before entering into the
contract.
©) After having occurred, the party could not have adopted reasonable methods to avoid or
overcome its effects
4d) Is not substantially attributable to the other party
The Contractor shall only be entitled to claim if the event meets all of the above requirements.
The insurance company shall be responsible for paying the costs incusred unless of course the
insuring party is the Employer and they fail to attain coverage for Force Majeure acts, In this
case, the Contractor shall claim against the Employer.Page |27
ii, Identify the clauses under which the Employer may be entitled to claim against the
Contractor. Analyze and discuss in respect of each clause the grounds under which the
Employer is entitled to claim
The following is a tabulated list of all the sub-clauses under which the Employer is entitled to
claim against the Contractor:
CLAUSES THAT ENTITLE EMPLOYERS TO CLAIM AGAINST CONTRACTORS
Table 2dlsplaying the relevant sub-clauses in the FIDIC 1099 Red Book, which states an Employer is entitied to claim against
‘Contractor
 
 
 
 
 
 
 
 
 
 
 
 
 
Sub-Clause Clause Title Page No.
419 | Electricity, Water. Gas 18
420 | Employer’s Equipment and Free-Issue Material 18-19
75 Rejection 25
76 ‘Remedial Works 25.26
86 Rate of Progress 27
87 Delay Damages 28
94 Failure to Pass Tests on Completion 30
113 | Extension of Defects Notification Period 3
114 | Failiwe to Remedy Defects 3
15.4 | Payment after Termination 8
18.1 | General Requirements for Insurances 53-54
18.2 _ | Insurance for Works and Contractor's Equipment S455
 
 
 
 
 
4.19 Electricity, Water and Gas
Description: The Contractor shall be responsible for providing their own power, water and other
services unless the site already has such provisions in which case the Contractor then becomes
entitled to use it but only for the purposes of performing the works. The Contractor is howeverPage |28
responsible for providing their own material for accessing the supplies. The prices for using
these services shall be stated in the Contract, The use of the services shall be quantified and
measured and charged to the Contractor. The Engineer shall agree upon or determine the amount
to be charged as per Sub-Clause 3.5 (Engineer's Determination) and the Employer is due the
amount charged to the Contractor as per Svb-Clause 2.5 (Employer's Clainy.
Entitlement: The Empl
 
fer is entitled to payment of cost for the use of all the services by the
Contractor. The price of the services shall be stated in the Contract,
Analysis: The Employer is entitled to claim from the Contractor for payment of cost for the use
of all services provided to the Contractor on site. No notice is however required for this claim as
stated in Sub-Clause 2.5 (Employer's Claims).
4.20 Employ Equipment and Free-Issue Matet
Description: The Employer shall make available to the Contractor all equipment of the
Employer's for performing works as stated in the contract at the prices quoted in the contract.
The Engineer shall agree upon or determine as per Sub-Clause 3.5 (Engineer's Determination)
the amounts due to Employer as per Sub-Clause 2.5 (Employer's Claims) at which point the
Contract pays the cost at an agreed rate
Entitlement: The Employer is entitled to payment of cost from the Contractor for the use of all
the Employer's equipment as stated in the contract. The price to charge the Contractor shall be
stated in the Contract.
Analysis: The Employer is entitled to claim from the Contractor for payment of costs on the
gtounds that the Contractor uses the Employer's equipment that was stated in the Contract. The
Employer does not need to give notice for payment as per Sub-Clause 2.5(Employer’s Claim).~
8
5 Rejection
 
Description: If any aspect of the Contractor's work is found to be defective or not in accordance
 
with all contract and standard requirements the Engineer may reject that aspect of work. This
includes but is not limited to plant, material, equipment, workmanship. The Contractor shall
immediately remedy the defects until it complies with requirements. At this point the Engineer
can subject said aspect of work for reexamination to evaluate the new state. If the Employer
incurs any costs as a result of the rejection or retesting, the Employer shall give notice to the
Contractor and claim as per Sub-Clause 2.5 (Employer's Claim)
Entitlement: The Employer shall now be entitled to payment of all cost incurred as a result of
the rejection and retesting
Analysis: The Employer shall only be able to claim if the rejection and retesting incurs a cost on
  
hinvher. The Employer shall be required to give notice substantiating what costs were incurred
as result of the rejection. The notice shall be given as soon as the Employer is aware of the issue.
The Engineer shall determine whether the Employer can claim and if the amount claimed for is
fair,
7.6 Remedial Works
Description: The Engineer may instruct the Contractor to remove and replace any plant or
materials from the site and/or remove and redo works all of which is not in accordance with the
contract. The Engineer may all instruct the Contractor to execute any works to rectify issues that
threaten the safety of the works due to an accident, unforeseeable event or otherwise. Provided
the Contractor fails to follow the instruction and a cost is incurred on the Employer, the30
~
Employer shall give notice and shall be entitled to claim for payment of cost as per Sub-Clause
 
(Employer's Claim)
Entitlement: The Employer shall be entitled to payment of cost
Analysis: The Employer shall only be entitled to payment of cost provided the Contractor was
not entitled to be paid for the execution of the instruction; and furthermore, the Contractor's
failure to follow the Engineers instruction ineuired a cost on the Employer. The Contractor may
be entitled to be paid for the execution of the instructed works provided the i
 
struction given had
not arisen from an error made by the Contractor.
8.6 Rate of Progress
Description: If the progress of works is too slow to complete by the estimated Completion time
or the programme of works is not up to date the Engineer can instruct the Contractor to revise the
programme and resubmit a new one. The new programme shall schedule the works to finish in
the old completion time unless a new one has been agreed upon. The Engineer shall determine
whether the Contractor shall adopt the new programme together with all costs accompanied with
it, If the revised programme incurs a cost on the Employer, he/she shall give notice to the
Contractor and shall be entitled to claim as per Sub-Clause 2.5 (Employer's Claim)
Entitlement: The Employer shall be entitled to payment of cost and any additional delay
damages as per Sub-clause 8.7 (Delay Damages)
 
jis: The Employer shall only be entitled to payment provided the reasons for the slow rate
of works are the Contractor's. Furthermore, the revised programme needs to inflict a cost onto
the Employer for himvher to be entitled to claim. The additional cost may arise out of a need for
additional services (water, electricity and gas), Employer’s equipment, plant, materials and time.~
e
 
  
: Ifthe Contractor fails to finish work and pass the tests on completion at the agreed
time of completion, the Employer becomes entitled to claim for delay damages from the
Contractor. The Employer shall give notice and claim as per Sub-Clause 2.5 (Employer's Claim).
Entitlement: The Employer is entitled to payment of cost for all delay damages. The delay
damages value shall be agreed upon in the Contract. However the Contractor is not subject to
pay the entire sum of the delay damages immediately; the delay damages shall be paid in part
(figure agreed upon in the contract) every day after the time for completion till the Take Over
certificate has been issued. The total cost of the delay damages shall not exceed that stated in the
Contract.
Analysis: The Employer shall only be entitled to claim for the delay damages provided that the
Contractor is responsible for the delays caused, other than the event that the works were delayed
under Sub-clause 15.2 (Termination by Employer).
9.4 Failure to Pass Tests on Completion
Description: If works or sections of works fails test on completion, the Engineer is entitled to
repeat said tests, reject the work or issue a taking over certificate (under the employer’s request)
In the case where the Engineer issues the take over certificate, the Contract Price shall be
reduced to reflect the value of the substandard finished works. The reduced price, unless a
method or fi
 
wre was agreed upon in the contract, shall be agreed upon by both parties or
determined by the Engineer and claimed for by the Employer as per Sub-Clause 2.5 (Employer's
Claim)Page |32
Entitlement: The Employer shall be entitled to payment of the money saved due to the reduced
price of the contract. The reduced price shall be paid before taking over certificate is issued in
 
the event both parties agree on a figure. If not, the Engineer shall determine a figure which will
be paid as per 2.5.
Analysis: If the works are rejected the Employer shall be entitled to claim as done in Sub Clause
LIA (Failure to Remedy Defects). In the event a straight take over is done, and both parties
accept that the product is a failure, a reduced price shall be determined in which the Employer
becomes entitled to the savings. If the Contractor does not agree that the product is a failure, a
dispute arises
11.3 Extension of Defects Notification Period
 
Description: If a works, or aspect of works cannot be used as intended on completion of works
ive notice to the
 
due to damages or defects caused by the Contractor, the Employer shall g
Contractor and claim as per sub-clause 2.5 (Employer's Claim) for an extension of the defects
notification period
Entitlement: The Employer shall be entitled to an extension of the defects notification period,
however this time shall not exceed two (2) years.
Analysis: The Employer shall only be entitled to claim if the defects and/or damages make the
final works or aspects of the works unusable as intended. If the Contractor suspends work or is
suspended from continuing work, and any defects or damages occur after two (2) years after the
 
original defects notification period has passed; the Employer shall not be entitled to claim for an
extension of the period.~
2
&
 
 
: The Contractor shall be given a date by the Employer in which he/she shall remedy
all defects by in a notice given in a reasonable time before the set date. If the Contractor fails to
remedy the works by the given date, the Employer may complete the works himself at the
Contractor's cost at which point the Employer becomes entitled to claim for all cost incurred on
him. The Employer shall give notice to the Contractor and claim as per Sub-Clause 2.5
(Employer's Claim). The Employer also has the option of letting the Engineer determine a
reduced contract price to subject the Contractor to. If the defects deprives the Employer from
using the works on a whole, the contract can be terminated, at which point the Employer can
recover all sums paid to the Contractor.
Entitlement: Depending on the option chosen by the Employer, he/she shall be entitled to either
payment of costs incurred by completing the works him/herself; the savings in reducing the
contract price for and incomplete job; or all sums paid previously for a works that cannot provide
the intended use, as per the contract, to the Employer.
Analysis: The Contractor shall make every effort to remedy all defects by a reasonable date
 
given to him/her. If the Contractor does not meet the deadline date, to fault of the action or
inaction of the Contractor, the Employer is entitled to make their decision for payments,
    
‘he Employer, after terminating the Contractor, shall give notice to the Contractor
and be entitled to claim as per Sub-Clause 2.5 (Employer's Claim) for all costs, losses and
damages incurred as a result of the termination.Page |34
Entitlement: The Employer shall be entitled to all costs incurred through termination. The costs
incurred through termination shall include but shall not be limited to all costs for executing,
completing and remedying all works, defects and damages left behind by the Contractor.
18.1 General Requirements for Insurances
Refer to Contractor Claims section for analysis as the grounds for claiming are the same for both~
Pa
a
b) Outline the procedure under your choice of FIDIC 1999 Conditions of Contract that must
be followed in order for
FIDIC 1999 RED BOO!
 
'ONDTIONS OF CONTRAC FOR CONSTRUCTION
(i) The Contractor to make a successful claim
For a Contractor to successfully make a claim he/she shall adhere to the following procedure:
1. Aneveat occurs which causes the Contractor to feel entitled to compensation as per any sub-
clause which allows it in the FIDIC Conditions of Contract.
‘The Contractor shall give notice to the Engineer of the claim within 28 days after becoming
aware of the situation. No notice given, the Employer is cleared of all liability and claim is
void.
The Contractor shall submit a fully detailed claim to the Engineer which thoroughly
sware of the situation,
 
describes the situation, no later than 42 days after becomi:
4. If the effect of the claim is continuous, the detailed claim shall be considered interim. Every
month, or as per a schedule agreed upon, the Contractor shall submit claims to continuously
make the Engineer aware of the effects incurred. The Contractor shall send a final claim
within 28 days of the end of the effects of the event.
5. The Engineer shall let both parties know, in writing, of his/her approval or disapproval of the
claim within 42 days of receiving a claim.
6. The Engineer shall carry out a determination on the claim and the amount of compensation
due, if any. This shall include meeting with both parties to come to an agreement; or if no
agreement is met the Engineer shall make a fair and unbiased decision.
7. The compensation is given to the Contractor for all claims substantiated. For continuous
claims, interim payments can be made for all parts of the claim substantiated tlbus far.~
e
&
PROCEDURE OF HOW A CONTRACTOR CAN MAKE A SUCCESSFUL CLAIM
 
 
Did an event, which is not as a result of your negligence or fault, make you feel entitled to
compensation as allowed by any sub-clause in the contract?
 
 
 
The Contractor shall give notice to the Engineer describing the event as soon as
 
possible and no later than 28 days after becoming aware of the event
 
 
 
 
The Contractor shall give the Engineer a fully detailed claim and supporting particulars as to
the basis of the claim and the amount of payment and extension of time claiming for as soon
as possible and no Jater than 42 days ofter becoming aware of the event, or no more than 14
 
days after the deadline for submitting the initial notice.
 
 
 
 
 
Documents have not
been submitted by the
designated deadline;
the Emph
 
er is
 
 
Does
the event have a continuous effect?
 
 
 
 
 
 
 
‘Yes
 
 
 
 
 
J
 
cleared of all liability,
claim is void.
 
 
 
The detailed claim shall be considered interim; the Contractor shall
continue to submit monthly claims: the Contractor shall submit a final
claim within 28 days after the effects of the event have ended,
 
 
 
 
 
The Engineer shall let both parties know of his/her approval/disapproval of a claim
together with detailed comments no later than 42 days after receiving the claim.
 
 
 
The Ei
 
ineer shall agree or determine, as per sub-clause 3.5 (Determinations), whether the
Contractor is entitled to compensation or not; and if so the extension of Time for Completion
and/or any additional payments due to the Contractor.
 
{
 
Either party disagrees;
dispute resolution is sought.
 
 
 
|
 
Parties agree and all compensation
due to the Contractor is given.~
on
s
(ii) The Employer to make a successfill claim
For the Employer to successfully make a claim he shall adhere to the following procedure:
1. An event occurs which causes the Employer to feel entitled to compensation as allowed
in any sub-clause listed in the FIDIC Conditions of Contract.
 
‘The Employer or the Engineer (under the request of the Employer) shall give notice to
the Contractor unless payment is sought for sub-clause 4.19(Electricity, Water and Gas)
or 4.20(Employer’s Equipment and Free-Issue Material). The claim shall be given as
soon as possible after becoming aware of the event. If the Employer is claiming for an
extension of the defects notification period, the claim shall be done before the expiration
date of the exiting period.
3. The Engineer shall carry out a determination on the claim and the amount of
 
compensation due, if any. This shall include meeting with both parties to come to an
agreement; or if no agreement is met the Engineer shall make a fair and unbiased
decision.
4, The compensation is given to the Employer for all claims substantiated.~
¥
g
PROCEDURE OF HOW AN EMPLOYER CAN MAKE A SUCCESSFUL CLAIM
 
 
Did an event, action or inaction by the CONTRACTOR make you feel entitled to
compensation as allowed by any sub-clause in the contract?
 
 
 
 
Is the event a result of sub-clause 4.19(Electricity, Water and Gas) or 4.20 (Employer's
Equipment and Free-Issue Material) or any other request for the provision of services,
 
 
 
 
 
No.
 
 
 
 
 
 
 
 
    
   
 
 
   
    
  
  
    
    
   
 
Is the claim for an extension of the defects
 
‘No notice is required. notification period as per sub-clause 11.3
 
 
 
(Extension of defects notification period)
 
 
No Yes
 
 
 
 
 
 
 
 
Employer or Engineer (under
 
Employer or Engineer (under || Employer's request) shall give notice
Employer's request) shall give notice |! and supporting particulars to the
and supporting particulars to the || Contractor as soon as possible after
Contractor as soon as possible after || becoming aware of the issue but before
 
becoming aware of the issue. expiration of the existing defects
notification period
 
 
 
Engineer shall make determinations, as per sub-clause 3.5 (Determinations), about the validity of
 
the claim and the amount of compensation due to the Employer if any.
 
 
 
Either party disagrees; Parties agree and all compensation
 
 
 
 
dispute resolution is sought. due to the Contractor is given.Page |39
(c) Outline the procedure under your choice of FIDIC 1999 Conditions of Contract that must be
followed in order for either the Contractoror the Employer to commence Arbitration
Proceedings.
FIDIC 1999 RED BOOK: CONDTIONS OF CONTRAC FOR CONSTRUCTIO’
 
To reach to arbitration proceeding, the following shall occur:
The Engineer makes a decision for an ongoing claim and either party is dissatisfied with
the decision: a dispute now arises.
‘A request is then made in writing to the DAB for their intervention. The DAB is now
tasked with making a decision on the dispute. All information and site access required
shall be given to the DAB
The DAB shall give their response within 84 days of receiving the request.
If either party is dissatisfied with the decision, a notice of dissatisfaction shall be given to
the other party within 28 days of the decision. If no decision is given, the dissatisfied
party shall give the other a notice of dissatisfaction no later than 28 days after the
deadline date for the decision.
The parties have SGdays to come to an amicable settlement after which, if no settlement
has been made, arbitration is commenced.
However if both parties agree with the DAB’s decision; or no response to the decision is
given within 28days of the decision, the decision becomes final and binding.
 
Ifa party
breaches the final decision, arbitration can also be commenced,~
&
PROCEDURE OF HOW ARBITRATION CAN BE COMMENCED
 
claim put forway
The Engineer makes a determination as per sub-clause 3.5 (Determinations) on a
:d by either the Emplover or the Contractor.
 
 
 
 
Parties agree all compensation
due to the claimant is given.
 
Either
dispute arises.
party disagrees;
 
 
 
 
shall be given,
All information, site access, facilities, ete.
as required by the DAB to make a decision
 
 
Make a request in writing for the DAB to
make a decision on the dispute.
 
 
 
 
 
 
 
 
shall make
 
decision wit
receiving the request.
 
their
in 84 davs of
Either Party is dissatisfied
 
with the decision
 
No decision is made
 
 
within 84 days
Notice of dissatisfaction is given
 
to other party within 28davs of
decision or, provided none was
28days of the
made, within
 
 
 
 
 
Parties agree | | No
 
with decision.
response to
decision is given within
the
 
 
deadline date for the submission
of the decision
 
 
J
 
 
 
28 days of decision.
 
56 days have passed from
 
 
 
 
Decision becomes final and binding
 
 
 
the
dissatisfaction
notice of
and no
settlement has been made
 
Parties settle the
dispute
within 56 days from
when
amicably
the notice of
 
 
 
One party breaches
 
 
the final decision
 
 
 
ARBITRATION PROCESS
IS COMMENCED,
 
 
dissatisfaction was
given~
CONCLUSIONS
 
Tn conclusion the following observations were noted:
It was found that once a Contractor experiences an event which allows for compensation,
he should give notice within 28days. The Employer however has no such time bar. The
Employer does not have to submit notice for claim of payment for all services provided to
Contractor.
The event that incurs cost or delays on the Contractor cannot be the fault of the Contractor,
likewise for the Employer, the event cannot be as a result of the Employer
Claims for profit can only be done when a party is affected directly by the actions or
inactions of the other party. Otherwise, cost is the only payment that can be sought. In
some cases, stich as with natural disasters, only time can be claimed, no payment.
The Contractor and the Engineer shall keep hold of contemporary records for the sake of
substantiating claims. The claimant party can only be awarded compensation after
sufficiently substantiating all claims with records. Payment to the Contractor shall be made
out in the Contract Price and payment certificates. Payment for the Employer shall also be
reflected in the reduction of the Contract Price.
The process for an Employer to make a claim seems more lenient with no time bars.
The Engineer is the first line of action for making any decision in conflict on the contract,
followed by the Dispute Adjudication Board, amicable settlement and then arbitration.
The arbitration process shall only commence provided the Dispute Adjudication Board
cannot come to a decision, if any, that either party agrees with or in the event either party
does not follow the final binding decision,~
RECOMMENDATIONS
 
The Contract of Conditions should be updated to include more modem means of
technology as approved media for conducting works. This includes but is not limited to
using emails as an official form of records
Introduction of more in depth courses on the FIDIC suite of Contracts at the University
level of study. More workshops and seminars to keep all practicing Engineers,
Contractors, Employers, Lawyers, ete. up to date with state of the art FIDIC Contract
Conditions.~
6
BIBLIOGRAPHY
 
AG Falkland Islands v Gordon Forbes Construction . BLR 280 (Falkland Islands Supreme Court
Sanders, March 2003),
Doosan Babcock Ltd. ¢ Comercializadora De Equipos Y Materiales MABE Limitada. EWHC
 
2010 (UK Technology and Construction Court, 2013).
FIDIC. FIDIC 1999 Red Book: Conditions of Contract for Construction. 1999.
Fitzgibbon, Will. "Companies Accused of ‘Taking Advantage of Regulatory Weakness." The
International Consortium of Investigative Journalists. July 2015
http://www-ieij.org/project/fatal-extraction/companies-accused-taking-advantage-
regulatory-weakness.
Glover, Jeremy. "FIDIC an Overview: the latest developments. comparisons, claims and a look
into the future." September 2008.
Kratochvilova, Emma, "Records! Records! Records!" _Lexology. March 2009.
http://www lexology.conv/library/detail.aspx?g-780Sda8e-8722-4f83-8689-
4775938b1356.
Levin, Ana, Mark Lloyd-Williams, and David Nitek, "A significant new case on the FIDIC
form." Lexology. May 2014. http:/svww.lexology.convlibrary detail.asp d71040-
 
£2a7-41db-b466-ed1e757d422e.
National Insurance Property Development Company Limited (Nipdec) v NH International
(Caribbean) Limited (NHIC). CV2008-04881 (High Court of Justice, Trinidad and
Tobago, 2008)Page |44
Obrascon Hiuarte Lain SA v Her Majesty's Attorney General for Gibraltar. EHWC 1028
(Queen's Bench Division (Technology and Construction Court), April 2014).
The National Academies for Science. "Methods for Reducing Claim." In Reducing COnstruction
Costs: Uses of Best Dispute Resolution Practices by Project Owners, by The National
Academies for Science, 37-42. Washington D.C.: The National Academies Press, 2007.
Thompson, Stuart, "Standing your ground: FIDIC and time bars." Lerology. May 2014.
http://www lexology.com/library/detail.aspx?g-31018b77-3aba-40ce-bb 1 L-
026069¢f974a.