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Construction Law/Termination of Main Contract under FIDIC 99 - Nominated Subcontractor

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Question
Dear sir;

We are a nominated subcontractor under a FIDIC 99 contract; the Employer was in default for delayed payments and then he failed to pay to the main contractor his due amounts.
The main contractor sent his notices in accordance with Clause 16.2 and gave the employer a termination notice with a 14 daysí notice. The notice period will end tomorrow. Itís important to state that such termination notice was issued by the main contractor without the due consultation with the nominated subcontractor.
The Employer did not reply to the termination notice, and the main contractor did not reply to our letters regarding the remaining open works and protection of the executed works.
Now, what shall we do regarding this termination?

Regards;

Haya

Answer
Dear Haya,

I have no information regarding your sub-contract with the main contractor, but, under FIDIC 99, being nominated gives you no extra privileges over a domestic sub-contractor, unlike FIDIC 4.  Although it would be courteous of the main contractor to discuss his action with you, he is under no obligation so to do.

If the Contract is terminated, then the Contractor has an obligation to protect the Works before leaving the site.  

What to do?  Wait until you get a termination notice from the Contractor, try to recover all outstanding payments and fulfil your obligations to protect the Works when instructed so to do by the Contractor.  Unfortunately it is a lose-lose situation for you.

Apologies for being so pessimistic, but there are no silver bullets.

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Peter M. Elliott

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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 www.eotprotocol.com before submitting a question.

Experience

Value . . .
It's unwise to pay too much, but it's unwise to pay too little. When you pay too much you lose a little money, that is all. When you pay too little, you sometimes lose everything, because the thing you bought was incapable of doing the thing you bought it to do.
The common law of business balance prohibits paying a little and getting a lot. It can't be done. If you deal with the lowest bidder, it's well to add something for the risk you run.
And if you do that, you will have enough to pay for something better.
. . . John Ruskin (1819 - 1900)
"We are too poor to buy something cheap"
.Romanian Proverb 2002
A lean compromise is better than a fat lawsuit. George Herbert (English poet 1593-1633)
I said it in Hebrew, I said it in Dutch,
I said it in German and Greek:
But I wholly forgot (and it vexes me much)
That English is what you speak!" Hunting of the Snark - Lewis Caroll
Match your presentation to the reader!
The joy of food lasts but an hour, of sleep but a day, of a woman, but a month, but the joy of a building lasts a lifetime. Syrian proverb.
Comments and observations leading to improvements in the translation of FIDIC Red & Yellow books into Romanian prior to approval by FIDIC (reference 'Preface to the Romanian edition')

Organizations
Institution of Civil Engineers, Association of Chartered and Certified Accountants, Society of Construction Law, Dispute Resolution Board Foundation

Education/Credentials
B Sc(Hons) in Civil Engineering

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