You are here:

Construction Law/need help regarding Claim establishment


Dear Sir,

I am pleased to say that you have wonderful and appreciateable profile. Itís honor for me to ask you for help.
Sir, at the time of preparing out tender the Federal Excise Act of our country set out that FED (Federal Excise Duty) was to be paid at the rate of 5% on insurance premiums. This act has been revised such that the rate of FED became 10% and then 16%.
There are some ambiguities regarding placement of Insurance relating to Contract;  
In LOA (Letter of Acceptance), the Contractor is required to place all insurance relating to contract within 90 days after signing of this LOA.
As per COPA, part II-B, the Contractor is required to place all insurance relating to contract within 28 days after signing of LOA.
As per CoC, General Conditions part I, the Contractor is required to place all insurance relating to contract within 84 days after the commencement date.

The Employer approved insurance company after 14 months of commencement date as proposal for insurance company was submitted 1 month before approval.
Reasons behind this delay are as follows;
   There were discrepancy in policy between the Contractor and the recommended insurance company (a government company) by the Employer. (given in COPA, part II-B).
   Recommended company had high premium rates comparative to other companies in state.
   Recommended company was delaying in submission of insurance policies.
   Last and most important reason was that, as there were two more foreign insurance companies to be engaged so co-insurance with this local recommended company was not according to the prevailing law of insurance of state; the Employer was also trying to resolve this issue as soon as possible but couldnít.
For the entire time, the Employer and the Engineer had been notified and acknowledged about the cause of delaying.

These aforesaid points made postponement. When I tried to put up this claim (as change in tax, increases the cost) before the Engineer, he said that it was the Contractor obligation to place within contractual dates.

Sir, you are requested to help me in this regard to substantiate the claim.

If you need further info please e-mail me @     

Best Regards,
Engr. Waqas

Dear Waqas,

  In general practice any change in local authorities fees should be paid by Employer. But in your case there is a parallel claim situation. Contractor should have submitted the document latest in 3 months according to your contract but they submit in 13 months. So there is a delay of 10 months of submission.

   My advice is to find an amicable solution this delayed 10 months period shall be paid by Contractor and remaining period shall be paid by Employer. This may be the way that all parties can agree on.



Construction Law

All Answers

Answers by Expert:

Ask Experts


Daniel Kazado


I can answer questions related with FIDIC contracts.


10 years as Contract Manager for FIDIC contracts.

Mechanical Engineer
Contract Management - Basic Principles Certificate. Construction Contracts and Dispute Resolution Certificate. Contract Administration - FIDIC Certificate.

©2017 All rights reserved.

[an error occurred while processing this directive]