Construction Law/Engineer’s obligations under Sub-Clause 20.1 & 3.5
We are using FIDIC MDB 2010 conditions of contract for Construction. I am confused with the Engineers role when claim under clause 20.1 received and Engineer determination under sub-clause 3.5. Sub-Clause 20.1 requires the Engineer to respond with approval or with disapproval and detailed comments to claim within 42 days. This Sub-Clause also obliges the Engineer to determine this matter under sub-clause 3.5 within the above defined time period of 42 days. Sub-Clause 3.5 put a time limit of 28 days (from the receipt of the Claim) on the Engineer to complete the determination process. My queries are as follows:
(a) Will the Engineer proceed separately under Sub-Clause 3.5 & 20.1?
(b) Is it possible to determine the matter first within 28days and then reply to claim with approval and disapproval within 42 days?
(c) If the Engineer wants to combine determination and approval with detailed comments, then which time period prevail 28 days or 42 days?
The Contracts says:
“Within 42 days after receiving a claim or any further particulars supporting a previous
claim, or within such other period as may be proposed by the Engineer and approved
by the Contractor, the Engineer shall respond with approval, or with disapproval and
detailed comments. He may also request any necessary further particulars, but shall
nevertheless give his response on the principles of the claim within the above defined
Within the above defined period of 42 days, the Engineer shall proceed in accordance
with Sub-Clause 3.5 [Determinations] to agree or determine (i) the extension (if any)
of the Time for Completion (before or after its expiry) in accordance with Sub-Clause
8.4 [Extension of Time for Completion], and/or (ii) the additional payment (if any) to
which the Contractor is entitled under the Contract.”
“Whenever these Conditions provide that the Engineer shall proceed in accordance
with this Sub-Clause 3.5 to agree or determine any matter, the Engineer shall consult
with each Party in an endeavour to reach agreement. If agreement is not achieved, the
Engineer shall make a fair determination in accordance with the Contract, taking due
regard of all relevant circumstances.
The Engineer shall give notice to both Parties of each agreement or determination,
with supporting particulars, within 28 days from the receipt of the corresponding claim
or request except when otherwise specified. Each Party shall give effect to each
agreement or determination unless and until revised under Clause 20 [Claims,
Disputes and Arbitration].”
• Day 1: Contractor becomes or should become aware of the event or circumstance
• Within 28 days, the Contractor’s notice of claim
• Contractor keeps contemporary records
• Within 42 days from the date when the Contractor became aware or should have become aware, or in such other period of time as agreed, the Contractor shall send a fully detailed claim to the Engineer
• Within 42 days from receiving the claim or within other agreed period of time, the Engineer shall respond with approval, disapproval and detailed comments, at least in principle. Also, within this period of time, the Engineer shall proceed according to 3.5 to agree or determine the EOT and/or the additional payment to which the Contractor is entitled under the Contract.
o For this, the Engineer shall consult with the Parties to reach an agreement. In case of no agreement, the Engineer shall make a fair determination of the claim.
o The Engineer shall give notice to both Parties of the agreement or determination, with supporting particulars, within 28 days from the receipt of the corresponding claim or request.
So, reading the 2 sub-clauses, it results that within the first 28 days of the 42 days from the receipt of the fully detailed claim the Engineer shall give a notice, with supporting particulars, of either the agreement of the Parties, or of his fair determination. According to the Sub-clause 3.5, the Engineer cannot exceed the 28 days from the date when he has the fully detailed claim, even if the Sub-clause 20.1 allows 42 days for the Engineer’s response (approval, disapproval or at least response in principle). Acting this way, the Engineer satisfies both the sub-clauses 20.1 and 3.5.
The Engineer cannot give determination within 28 days, then a response, on or before the 42nd day from when he had the fully detailed claim, since the Engineer’s determination 3.5 is already an answer, more than that, it is an answer to which the Parties must give effect.
Hope these clarify the issue.
---------- FOLLOW-UP ----------
QUESTION: Thanks Madam for your worthy reply, your comments always helps for better understanding of FIDIC Clauses. Some more queries for Claim and determination procedure are as follows;
(i) From the penultimate paragraph, I infer that the Engineer has to proceed simultaneously under 3.5 & 20.1 for determination and approval, disapproval with detailed comments, within the 28 days from the receipt of the fully detailed claim, Is it correct?
(ii) If it is correct then why Sub-Clause 20.1 refer 42 days period for the Engineer Response?
(iii)Sub-Clause 3.5 also mentions " The Engineer shall give notice to both Parties of each agreement or determination,
with supporting particulars, within 28 days from the receipt of the corresponding claim or request except when otherwise specified". Please note the wording "except when otherwise specified". I interpret that this refers to the period of 42 days which was specified in Sub-Clause 20.1 for determination. Is this right?
Let's think like this: when acting as per 20.1, the Engineer is the one that receives and deals with the Contractor's claims (notice, details, intermediary claims, final claims and more details, etc.. When acting as per 3.5, the Engineer is the one that gives decisions on the fully substantiated claims, and his clock starts when he has all the details that enable him to give a decision (determination).
In this view the clauses of the Contract should be read.
So, according to 20.1, the Engineer should answer, at least in principle, in 42 days from the date when he received a claim or further particulars.
According to 3.5, he shall give his determination, with supporting particulars, within 28 days from the receipt of the corresponding claim. When acting on 3.5, the Engineer is like another person in the Contract, different than the person who dealt with 20.1 - first he should act as per 20.1, then put the hat of the "Engineer as per 3.5" and act accordingly. This is he philosophy.
When something is unclear, we should go to the philosophy and principles of the contract.
Hope it helps.