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Construction Law/Withholding of monies due by the Engineer


QUESTION: Dear Sir or Madam,

Please draw your attention to this fact.
We are contractors and acting under fidic 2006 mdb. The situation in which wa have fallen is that the Engineer has started retaining 10% each time of the IPA amount. We dont understand that if the Engdineer approved the value of the works, and issued IPC, with deductions as always, and at the same time withholding monies from approved IPC sum. When we asked the Engineer on what ground the 10% is being withheld, no answer, substantiation has followed. Well the engineer is referring to the fact that there might develop cracks on the concrete pavement, so thereby the engineer is protecting itself against future loss. Thus my question is, has the Engineer any right under FIDIC 2006 withhold our monies, even if the IPC has been issued? The Engineer makes no reference to any sub clauses of the contract. In my opinion the engineer is weak in interpreting the FIDIC contract, considering the fact that no sub-clause is being applied, or is there any sub-clause in genereal conditions part, that the Engineer may or has the right to retain monies due, which are approved.
Thank you.
P.S. Please specify the clauses of fidic form contract so we can claim or take actions against the Engineer or Employer.

ANSWER: Dear Rahmatjon

In order to provide an adequate response for your query could you please clarify if the said 10% deductions are being made on account of Retention Clause (any amount to be deducted for retention, calculated by applying the percentage of retention stated in the Contract Data to the total of the amount claimed in IPA)

Please clarify and revert with a followup question.


---------- FOLLOW-UP ----------

this is a follow-up question.
No apart from 10% retention as per the contract the Engineer has withheld from each ipc issued.

In such case I understand that the Engineer is afraid of possible cracks and on pretext of that he is holding enough monies for the "non conforming work".

If possible you should propose to carryout third party tests and convince the Engineer that the works being carried out by you conform fully and such deductions can't be made.


You should ask the Engineer that such "10%" deduction should be made from the "BoQ Items" which they consider is non-conforming and not to the overall IPC amount.


Manish Gupta

Construction Law

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Manish Gupta


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