Construction Law/Notice to Claim

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QUESTION: Dear Mr. John Dowse,
One of our ‘Infra-structure’ project is based on Multilateral Development Bank Harmonized Edition of Conditions of Contract June 2010. Whenever some ‘Notice to Claim’ under relevant provisions is given; it is rejected by the Engineer instantly without stating any Clause that makes the Engineer eligible to reject the ‘Notice’ even.
As per our inference, the Engineer is obligated to acknowledge receipt of the ‘Notice’ and direct the Contractor to maintain contemporaneous records for his inspection. On submittal of detailed Claim by the Contractor, it is the Engineer’s prerogative to accept or reject the Claim in his determination. The question is:
“Is the Engineer authorized under any Clause to reject the ‘Notice” without waiting for submittal of detailed Claim by the Contractor”?

ANSWER: Dear Khushnud,

Thank you for this question.

I do not have a copy of the MDB 2010 edition to hand at this time; however I do not recall any difference in respect of this issue between the 2006 and 2010 editions.

In short, the Engineer is not entitled to reject a notice of intention to claim excepting when the notification is given beyond the limitation period (28 days per sub-clause 20.1). If the Engineer rejects a notice of intention to claim he should state the grounds on which the rejection is made.

I suggest that the Contractor acknowledges the Engineer's letter but indicates that it will purse its claim and is making records which will be submitted in substantiation. Within 42 days after the Contractor submits its claim - which might be a statement of the basis of claim, rather than evaluation - the Engineer must respond with approval or disapproval. If the Engineer fails to respond I suggest the Contractor seeks the Engineer's determination under sub-clause 3.5; following receipt of which the contract disputer resolution process can proceed.



I hope that this assists you.

Kind regards,
John Dowse

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

QUESTION: Dear Mr. John Dowse,
Thank you very much for instant response. Although your answer is of immense value yet by stating that:  If the Engineer rejects a notice of intention to claim he should state the grounds on which the rejection is made, this leads one to imply that the Engineer can reject the notice if he does state the reasons/grounds thereof.
In order to seek further clarification concerning my question I would ask as follows:
“Whether any clause does exist in the Contract which confers upon the authority to the Engineer to reject the ‘Notice to Claim’ by the Contractor unless otherwise the notice is time barred and given beyond the time limit stipulated in the Contract”?
Of course, on submittal of detailed Claim, the Engineer shall use his discretion while giving his determination under Sub-Clause 3.5.

I apologize for the inconvenience this may have caused.
Regards
Khushnud

Answer
Dear Khusnud,

Thank you for this additional information and question..

If we are speaking specifically about a notice of intention to claim, made under sub-clause 20.1 of the FIDIC GCC, the Engineer's authority to reject only arises only under sub-clause 20.1. Where a notice is sent under another clause, for example under the Variation clause, the Engineer can reject where that other clause gives specific power for the Engineer to make an assessment and/or determination.



I hope that this assists you.

Kind regards,
John Dowse
Follow me on Twitter: @CernoOrg
For my regular industry newsletter e-mail to info@cerno.org, stating SUBSCRIBE in the subject line

Training and consulting services are available, bespoke to companies and individuals.
John Dowse can be contacted by e-mail to info@cerno.org (When e-mailing, please include “AllExperts” in the subject line.)

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John Dowse

Expertise

Legal; contract interpretation; quantum; delay analysis. Practitioner in arbitration, adjudication and mediation.

Experience

Thirty-three (33) years experience in building and construction, at all levels both within contracting and consulting organisations. Practising arbitrator, adjudicator, and mediator. Faculty approved trainer for the Chartered Institute of Arbitrators. Lecturer on construction contract forms and dispute resolution practices.

Organizations
Chartered Institution of Civil Engineering Surveyors Chartered Institute of Arbitrators Institute of Directors Society of Construction Arbitrators

Publications
Various UK and International construction and legal publications.

Education/Credentials
LLB (Hons), Pg Dip (Legal Practice), MCInstCES MCIArb MIOD Barrister

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