Construction Law/Extension of Time

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Question
Dear Sir,

My question relates to extension of time in FIDIC 1987, Fourth Edition.

Firstly, Is it not allowed to make retroactive [ex post  facto] adjustment of contractual completion date of a project which was suspended for the Employer’s cause, but then was resumed in FIDIC 1987, Fourth Edition.

The contract time had passed when it was suspended. The Engineer granted extension of time equivalent to the period of suspension. The Engineer added this time retrospectively to the contractual completion date, which had passed before the suspension took effect. Is this correct? The Engine’s position was that the Contractor time had passed before the suspension because of the Contractor’s fault.

Secondly, would the Engineer be obliged to grant extension of time when there is no any claim submitted by the Contractor? If so, would this failure cause ” time at large” even when the Contract contains provisions allowing extension of time for the kind of events happened on the project?

What about the Engineer’s failure to make determination within reasonable time after the Contractor submitted Claim for extension of time?

Being deeply indebted in advance and looking forward to receiving your expert advice, I remain

Alemu

Answer
Dear Sir
First at all it is a pity that the Employer in this case is using a FIDIC 87 edition when FIDIC issued in 1999 the Rainbow suite which cover a lot of the Contractual gaps occurred in 87 edition.
Secondly I can say that apparently in your case there is a lack of Contract Management and following the Contractual procedure.
My opinion is  based on the limited information presented by you

Regarding your statement:

“Firstly, Is it not allowed to make retroactive [ex post  facto] adjustment of contractual completion date of a project which was suspended for the Employer’s cause, but then was resumed in FIDIC 1987, Fourth Edition.”, please find enclosed my opinion:

I assume from what you were saying that not “the Contract time has passed when it was suspended” but the “Original time for completion of the works has passed when suspended”. The Contract is a legally binding agreement between the parties and it ends in the following cases:
1.   Common agreement between the Parties to terminate the Contract
2.   Termination by the Employer
3.   Termination by the Contractor
4.   Letter of discharge entered into force
Apparently you are not in one of the above situations
Regarding your question regarding extension of time quoted below
“The contract time had passed when it was suspended. The Engineer granted extension of time equivalent to the period of suspension. The Engineer added this time retrospectively to the contractual completion date, which had passed before the suspension took effect. Is this correct? The Engine’s position was that the Contractor time had passed before the suspension because of the Contractor’s fault.”, I am giving you the following opinion:

Normally, an event causing a delay will occur before the contractual Time for Completion and the Contractor must make his claim within a given time of the event occurring (Red Book Clause 44.2). The Engineer must then respond with a given time (or a reasonable time) - he cannot wait until completion to see if the Contract actually needs the time extension. If the event occurs after the contractual time for completion and the Contractor is running late, he may still be entitled to an extension if the circumstances have caused him even more delay (and it was not his fault – in this case suspension of the works by the Employer.).
If the Engineer does not grant a time extension (or reply to the Contractor's claim) within the currency of the Contract, it would depend very much on the circumstances, and I would suggest that he cannot call liquidated damages until he has replied to the Contractor's claim and definitely rejected it.

To your question: “Secondly, would the Engineer be obliged to grant extension of time when there is no any claim submitted by the Contractor? If so, would this failure cause ” time at large” even when the Contract contains provisions allowing extension of time for the kind of events happened on the project?”

Normally the Engineer will only grant an extension of time if the Contractor applies for one so I cannot see an Engineer granting an extension "for no reason" - normally it would be in response to the Contractor's claim. This depend also on circumstances – like for example if the Engineer received an instruction from the Employer to give an extension of time for the period when the works are suspended.
Regarding “time at large” concept in my opinion it is not applicable since the Employer can still apply for delay damages (liquidated damages), therefore it is the Contractor’s interest to resolve sustain his entitlements in a diligent way.
The principle of “Burden of Proof” is also applicable in the FIDIC Contracts, meaning that the claimant must prove. It is not the Engineer’s duty to writhe or sustain the claim of the Contractor therefore the Contractor’s entitlements depend a lot of his capacity of proving his rights.
As you will see, any matters concerning extensions of time depend very much on the circumstances at the time and it is very difficult to give general answers. The intention of the FIDIC Conditions is that the matter shall be dealt with as quickly as possible so that the Contractor knows if he will get an extension and so that he can then plan the rest of his works accordingly.

Regarding your statement: “What about the Engineer’s failure to make determination within reasonable time after the Contractor submitted Claim for extension of time?”

First of all I assume that you asked the Engineer decision under Sub-clause 67 and you have not received it. If not you should ask the Engineer’s decision as stated above.

If the Engineer fails to give his decision in 84 days than you can give notice and go to the next step which is Arbitration or Commercial Court pending what is written in your Contract.

Hope it helps.

Construction Law

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Bogdan Oprea

Expertise

I can answer to claims assesments under FIDIC 4 and under FIDIC red book; I can answer to procedural issues under FIDIC rules; DAB implementation DAB procedures, etc

Experience

8 years in consulting companies, road contracts (rehabilitation and new) more than 250 Milion Euro supervision Contracts

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