Construction Law/Delay damages
Please what would happened to the following situation below:
The conditions of contract used on a project is FIDIC 99.
The contract ask for sectional completion of each blocks.
There is a schedule in the contract showing that each block shall be completed within XX days from date of possession.
There is only one single Liquidated damages expressed as a % of the contract value.
Each section has been delayed and have overrun the date of the whole contract.
Is the Employer have the right to apply liquidated damages for each section by proportion ?
If the above is not applicable ,Is the employer has the right to apply LAD from the date of completion of the whole contract to the Taking over certificate?
Or the LAD is not enforceable?
You may find the answer to your question within the last paragraph of the Sub-clause 10.2[Taking Over of Parts of the Works], which says:
"If a Taking-Over Certificate has been issued for a part of the Works (other than a
Section), the delay damages thereafter for completion of the remainder of the Works
shall be reduced. Similarly, the delay damages for the remainder of the Section (if any)
in which this part is included shall also be reduced. For any period of delay after the
date stated in this Taking-Over Certificate, the proportional reduction in these delay
damages shall be calculated as the proportion which the value of the part so certified
bears to the value of the Works or Section (as the case may be) as a whole. The
Engineer shall proceed in accordance with Sub-Clause 3.5 [Determinations] to agree
or determine these proportions. The provisions of this paragraph shall only apply to the
daily rate of delay damages under Sub-Clause 8.7 [Delay Damages], and shall not
affect the maximum amount of these damages."
I understand that in your Contract there is only 1 Date of Completion, so, normally, the Delay Damages, as per the Sub-clause 8.7, are to be applied starting with the Date of Completion. The fact that there are deadlines for each block does not affect this, so, if there are no penalties or delay damages foreseen in the Particular Conditions or/and in the Appendix to Tender for each block, no such delay damages are to be applied for each block.
In this case, the mechanism is as follows:
You have one block, which is finalized within the Date of Completion, but later that its own deadline. If you have the block taken over before the Date of Completion of the Contract, the Contractor will not pay delay damages for that block and the Delay Damages for the remaining Works from the Contract will be reduced accordingly, as per the above quoted paragraph from 10.2. The Contractor will pay Delay Damages only for those blocks and other Works which will be competed after the Date of Completion, in the proportion calculated as per the quoted paragraph of the Sub-clause 10.2.
Hope it is clear :-)
I have seen such blocks or streets, in other Contracts, for which penalties or delay damages were foreseen, other that the Delay Damages in the Sub-clause 8.7 of the General Conditions and in those contracts, indeed, penalties, or delay damages were applied for each block or street. This is not your case, since in your Contract there are no penalties or delay damages foreseen for each block.
Hope it helps.