Construction Law/Sub-Clause 20.1



Hope you are fine. Can you please guide us:

Issue No. 1:

What is meant by the submission of detailed claim "within 42 days after the Contractor became aware (or should have become aware) as per Sub-Clause 20.1".

e.g. Evnet occuring date = 25/6/2012
    notice serving date = 17/7/2012 (within 28 days as per Sub-
    Clause 20.1)  
Question: Does it mean that this time is to be considered from the date of the event occured (25/6/2012+42 days) or from the notice serving date (17/7/2012+42 days).

2. Issue No. 2.

What is meant by the text of Sb-Clause 20.1 " The notice shall be given as soon as practiceable, and not later than 28 days after the Contractor became aware, or should have become aware, of the event or circumstances".
We understand it as " that the Contractor will be bound to serve the notice within 28 days when he becomes aware of the event, meaning to say that there is no limit of 28 days for becoming aware but limit is for the Contrator's response which shall be within 28 days after he becomes aware.

Issue No. 3.

If a claim has a continuing cost effect and the first interim claim report is not submitted within 42 days (as required under Sub-Clause 20.1 of GCC), does it mean that the Contractor shall loose all his entitlemtns for the upcoming effects (In our case the effects are related to the interim payment certificates and will be known to Contractor after the certification of the repsective IPCs).    
         Question: What is the legal status of our claim now?

ANSWER: Dear Muhammad,

Issue 1 - 25/6/2012 +42 days

Issue 2 - Be reasonable - you will have to prove that you were not aware and that should not have been aware.  Notice of Government sponsored increase of fuel costs was published in the Official Gazette of one country 6 months before the increase took effect.  The Contractor should have been aware at the date of publication.  In fact he became aware six weeks after it came into effect when he received his first invoice with the higher costs.  Alternative case, the Contractor does not become aware, nor should he have been aware, of a cost until his statement of account is rejected by the Engineer.  

Issue 3. I guess that you submit the claim for the new certificate, but you lose the rights to earlier costs, but it would depend on the relevant circumstances.  Legal status depends on the applicable law and I am not a lawyer.  

---------- FOLLOW-UP ----------

QUESTION: To be specific to the issue.
The potential claim is related to the abnormal changes in the exchange rate of USD to Sudanese Pound (SDG)on 25/6/2012 (Contract Exchange rate  1 USD= 2.2406 SDG and the revised exchange rate issued by the Central Bank of Sudan, 1USD=4.42 SDG). The Contractor intends to claim this difference/effect after the certification of each bimonthly payment application. The next certificate after 25/6/2012 was the IPC No. 11. The notice of Contractor claim under Sub-Clause 20.1 was served in time on 17/7/2012. Now as per the Sub-Clause 20.1 of GCC, the Contractor was bound to submit the interim claim No.1 within 42 days after 25/6/2012, but the Contractor failed to do so for the first IPC No.11. Now as this claim has a continuing effect to be worked out as interim claim after each IPC, so we would like to seek your advice, as if the Contractor totally loses his full entitlment for the next IPCs after the Contractor's failuer for the first interim claim submission within 42 days?

Dear Muhammad,

I would suggest that the each instance could be treated as a separate claim, so that the Contractor does not lose the right to claim, or a continuing one, depending on how he presents his claim.  I presume that you rejected his first claim within the 42 days giving contractual reasons for your rejection, so that he knows how to present his claim more effectively in future, or not to waste time if there is no basis for his claim.  If you did not reject the claim with justification, then both parties are in breach and the claim might be accepted in adjudication or arbitration.  

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Peter M. Elliott


First response to queries regarding extensions of time, variations orders, site instructions and payment using FIDIC and other forms of Conditions of Contract, based on English Law, and derivatives only. Anyone who needs advice about EoT should download and study the SCL Delay & Disruption Protocol before submitting a question.


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