Construction Law/Termination - 63.1 Fidic 87
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.
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:
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.
Engr Arshad Mahmood