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Construction Law/Discrepency in Sub-Clause 14.3

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Question
Dear Madam,

Sub-Clause 14.3 (f) required to include any addition or deduction including those under Clause 20 but 14.3 (b) also required to include any amount to be added or deducted for change in legislation under Sub-Clause 13.7. But Sub-Clause 13.7 further refers to Sub-Clause 20.1. My question is that any amount to be added or deducted for change in legislation is either added in 14.3 (b) or 14.3 (f)?

Sub-Clause 14.3 (c) GCC state “any amount to be deducted for retention, calculated by applying the percentage of retention stated in the Contract Data to the total of the above amount”.
In regard of retention money, I have following queries:

(i)   Any amount added for changes in cost (Price Adjustment) is subject to Retention?
(ii)   If Legislation Claims are added in 14.3 (b), then they are subject to Retention?

Thanking you in anticipation.

Regards,

UMER SHABBIR

Answer
Dear Sir,
When considering the application of adjustment 13.8 you should keep in mind that "No adjustment is to be applied to work valued on the basis of the Cost or current prices", as it is written within the Sub-clause 13.8.
14.3 (b) refers to amounts to be added or deducted according to 13.7 and 13.8.
13.7 [Change in Legislation] refers to cases when the applicable law or the interpretation by the authorities of the applicable law is changed after the Base Date. There can be taxes to be paid directly by the Contractor or taxes that modify the price of come materials, labour etc. that enters in the composition of the unit prices from the Bill of Quantities. Applying 13.7, already the prices are modified according to the Cost, so 13.8 is not applicable.
Therefore, it results that for 14.3 (b) the adjustment is to be made for some amounts according to 13.07, and for some other amounts according to 13.8, as the case may be.
At 14.3 (f) it is written: "any OTHER additions or deductions which may have become due under the Contract or otherwise, INCLUDING THOSE UNDER CLAUSE 20". So, it is about OTHER amounts than those mentioned in 14.3 (a) to (e). 13.7 is at 14.3 (b), therefore it is not included in 14.3 (f) again.
Hope it is clear now.
Regards,
Alina

Construction Law

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Alina Valentina Oprea

Expertise

I can answer to questions regarding FIDIC 1999 contracts, including practical use of these conditions of contract, as well as to questions regarding dispute boards, both from theoretical and practical point of view. I cannot answer to questions related to other kind of contracts or to procurement process, except to some (limited) extent.

Experience

Implementation of works contracts (FIDIC 1999) financed by different financial institutions, including European Union; claims and disputes; dispute boards See more on www.alinaoprea.com

Organizations
Dispute Resolution Board Foundation

Publications
see http://alinaoprea.com/publications/ ; DRBF Forum Newsletter; Drumuri si Poduri; Revista Constructiilor; SIDiR Newsletter

Education/Credentials
Graduated the University of Civil Engineering Bucharest, Faculty of Railways, Roads and Bridges (1985-1990); Trained under Mr. Gwyn Owen’s pupilage program for arbitrators/adjudicators under FIDIC mentoring program (2006 – 2007)

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