Construction Law/FIDIC 1999/

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Question
Under Fidic 99

Contract started in 2010 and suspended because of government change
After resuming, contract financed by banks revolving credit for 90 day periods, however ipc submitted in October 2012 was paid in parts until May 2013 exceeding the bank 90 day period
The bank is now apprehensive about continued financing because of lack of guarantee
Client cannot give guarantee as state enterprise because it depends on government funding
We have requested additional advance payment but refused

What best action the contract affords the contractor?

Answer
Dear Anup,
I understand that there is a problem with the financing of the Contract by the bank.
There are 2 possible solutions for the Contractor:
1. if the Contractor wants to continue the works, in a hope that he will get the money, he can initiate an agreement Contractor-Employer regarding the way of paying (in stages, after a longer period of time than the Contract foresees, with some penalties, maybe, or with some guarantees, etc.), acceptable for both Parties;
2. if the Contractor is not sure if the Employer would ever pay or if he does not want to continue the Works, the Contractor can ask the Employer, according to 2.4, about his financial arrangements to pay the Contract Price. In case of no answer within 42 days, or in case of non satisfactorily answer, the Contractor can terminate the Contract according to Clause 16.
Hope this clarifies the issue.
Best regards,
Alina

Construction Law

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Alina Valentina Oprea

Expertise

I can answer to questions regarding FIDIC 1999 contracts, including practical use of these conditions of contract, as well as to questions regarding dispute boards, both from theoretical and practical point of view. I cannot answer to questions related to other kind of contracts or to procurement process, except to some (limited) extent.

Experience

Implementation of works contracts (FIDIC 1999) financed by different financial institutions, including European Union; claims and disputes; dispute boards See more on www.alinaoprea.com

Organizations
Dispute Resolution Board Foundation

Publications
see http://alinaoprea.com/publications/ ; DRBF Forum Newsletter; Drumuri si Poduri; Revista Constructiilor; SIDiR Newsletter

Education/Credentials
Graduated the University of Civil Engineering Bucharest, Faculty of Railways, Roads and Bridges (1985-1990); Trained under Mr. Gwyn Owen’s pupilage program for arbitrators/adjudicators under FIDIC mentoring program (2006 – 2007)

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