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Construction Law/Termination - 63.1 Fidic 87

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Question
Respected Sir,
We are working as contractors on a building and our contract is based on FIDIC 87 edition. Before asking my question let me brief you with the history. The Client failed to provide the site with LOC in June'11, and later on site was handed over to the us on piecemeal basis, with the latest site handed over after 7 months of LOC i.e. in January'12. Moreover, during these 7 months we also faced other problems such as compaction problem, additional works thru VOs etc. In May'12, the Engineer issued us a notice of 46.1 slow progress. We contested that the delays were not due to our fault.
After that a lot of variations have been instructed by the Engr. and we submitted our EOT before the completion date of our project. Our completion date has passed and the Engr. has still not determined the EOT. Meanwhile the Employer has issues us his intention to terminate the contract based on the 46.1 notice issued back in May'12.
Now the questions are:
1. Was the 46.1 notice effective till this time? Can the Employer base his termination on the notice issued 1.5 yrs ago?
2. Can the Employer terminate the contract without Engineer's reply to our submitted EOT?
Please provide guidance in the light of the above scenario.

Many Regards.

Answer
Thank you for raising questions and trust, you show on my expertise. Here are the answers of your questions and guidance in the prevailing scenario:
Ans. ofQ#1
Notice served by the Engineer in May, 2012 under sub-clause 46.1, was probably to boost up the progress of work in order to complete the Contract as per approved Clause14 programme of Works. Such notice is normally given when the Contractor is not maintaining progress adequately to achieve timely completion of the Contract. This Notice is generally considered as the prerequisite to invoke sub-clause 63.1(d).
Now specific answer to the Q is---- Such notice served 18 months back, cannot establish the basis for termination of the Contract by the Employer, provided that the Contractor has not failed to proceed with the  Works within 28 days after receiving the notice.
Ans to Q#2
The Employer may terminate the Contract after giving 14 days notice under sub-clause 63.1 subject to the certification by the Engineer    that the Contractor, without reasonable excuse, has failed to proceed with the Works, or any section thereof, within 28 days after receiving notice pursuant to sub-clause 46.1. EoT is a different matter and the Engineer will have to determine the same.It has no link with termination by the Employer. Anyhow, I believe the Employer shall wait for  the Engineer’s  certification of the  Contractor’s default to proceed with the Works.
In plain words,it means without Engineer’s certification of the failure of the Contractor to proceed with the Works, the Employer cannot invoke sub-clause 63.1 to terminate the Contract.

Guidelines in the Present scenario
The Contractor should prepare the list of his actions/measures adopted after receipt of notice by the Engineer for slow progress of works under clause46.1 and convey to the Engineer with a copy to the Employer. He may lodge the cost claims on the basis of disruption of his Clause-14 programme and due to additional works instructed by the Engineer from time to time. He may further notify under clause 53.1 to claim further consequential effects in shape of Eot/ additional cost, if the completion date becomes at large due to fault of the Engineer not to determine the EoT in a reasonable time. These step will benefit the Contractor in arbitration, in case, the employer invoke Sub-clause 63.1.
Hope my answers will help you in the present scenario. In case you need further clarification, please feel free to consult me with particulars details of the Contract.
Regards
Engr Arshad Mahmood

Construction Law

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Arshad Mahmood

Expertise

I may answer to the questions relating to FIDIC 4th as well as FIDIC 2010 MDB Harmonized version,price adjustment ,Variations,Eot and Cost claims,EPC Contract,Bidding Document,consultancy Contracts,certification,Standard Forms, Dispute resolution; and others pertaining to Contract implementation.

Experience

Contract management and Contract Administration, using FIDIC Conditions of 4th Addition as well as Fidic 1999 Red, Yellow and Silver Books including MDB Harmonized Edition 2010. Particularly in the area of Procurement of Contracts, Certification,Price Adjustment, variations,disputes management, EoT and Cost Claims; and other contractual issues arises from time to time during currecy of the Contracts.

Organizations
Member -Pakistan Engineering Council Member -Pakistan Engineering Congress Member -FIDIC Organisation

Publications
Joint Venture and Consortium Agreements for Pakistan Engineering Council,Pakistan

Education/Credentials
BSc Civil Engineering; Basic Management course; Hydro power Projects; and various other on Job Trainings

Awards and Honors
Commendation Certificate for the excellent management qualities and dedication at Ghazi Barotha Hydropower Project; and Certificate of Excellent work performed during Survey Camp.

Past/Present Clients
Water and Power Development Authority (WAPDA),Associate Consulting Engineer(ACE) and National Engineering services Pakistan(Pvt.) Limited (NESPAK)

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