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Construction Law/FIDIC Sub-clause 60.10 of Part-II – Particular Conditions of Contract


Follow up...

We refer to the response submitted vide your letter Nos.2909/24/NTD-04/240 dated 7-10-2015, 2909/2.4/RCC/NTD-08/244 dated 9-10-2015 and 2909/2.4/RCC/RCD-05/245 dated October 3, 2015 with respect to the claim for compensation on account of failure of Employer of making payment to the Contractor within 28 days after delivery of such notice pertaining to the execution of Contract Package LDMSP-GB-BSFC-SBBD Labano, LDMSP-SLB-RCC-NTD-08 and LDMSP-SLB-RCC-RCD-05 – Zour Minor respectively. In this connection we submit interpretation of Sub-Clause 60.10 of Part I – General Conditions of Contract as under.

(1)   In all cases, the same reason causing delay for payment has been advanced as valid reason without any evidence and supporting documents. For rejection of the aforesaid claim for compensation, it has become very simple on the part of Engineer to advance such reason in all cases. Such reason as advanced in each case has made this clause redundant, dormant and ineffective, which is against the genuine sprit of the provision of the clause.

(2)   The sprit of Sub-Clause 60.10 under General Conditions of Contract – Part-I has been altered by incorporating “valid reason” under sub-clause of Part-II – ‘Particular Conditions of Contract” without defining degree of valid reason anywhere in the documents. As such, true spirit of the provision of this clause can neither be ascertained by the Contractor and nor by the Engineer due to which your interpretation of this Clause seems to be superfluous and ambiguous.

(3)   It may be noted that the contractor is not privy to financial arrangement and lagging behind in getting the necessary fund on time from the source is default on the part of Employer. Hence, the claim for compensation on account of late payment be considered for payment.

Subsequent to the dispute between parties arising out of Contract as stated above we hereby refer the dispute to you pursuant to Sub-Clause 67.1 of Part I – General Conditions of Contract.

In the light of the same decision taken by the Engineer in connection with the compensation for delayed payment in respect of three Contracts as stated above, a letter was drafted to convey to Engineer for settlement of dispute pursuant to sub clause 67.1 of Part-I 'General Conditions of Contract'.

Submitted this draft for your perusal and comment please.

Dear Shoaib Zafar,

I would omit paragraphs (1), (2), (3) as they are emotive in nature.  Keep everything objective.  I would simply submit something similar to:-

In accordance with clause 67.1, we request an Engineer's Decision on the meaning of 'a valid reason' within the meaning of clause 60.10 as amended.  

Keep it simple and do not give the Engineer too many chances to obscure the issue.  The Engineer could say that his interpretation is not 'superfluous or ambiguous'.  Be ready with your own definition of 'valid', backed up by case law.  If you do not receive an acceptable answer within the stated period, submit a request for arbitration within the time limits given in clause 67.1.

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Peter M. Elliott


First response to queries regarding extensions of time, variations orders, site instructions and payment using FIDIC and other forms of Conditions of Contract, based on English Law, and derivatives only. Anyone who needs advice about EoT should download and study the SCL Delay & Disruption Protocol before submitting a question.


Value . . .
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The common law of business balance prohibits paying a little and getting a lot. It can't be done. If you deal with the lowest bidder, it's well to add something for the risk you run.
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I said it in German and Greek:
But I wholly forgot (and it vexes me much)
That English is what you speak!" Hunting of the Snark - Lewis Caroll
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Comments and observations leading to improvements in the translation of FIDIC Red & Yellow books into Romanian prior to approval by FIDIC (reference 'Preface to the Romanian edition')

Institution of Civil Engineers, Association of Chartered and Certified Accountants, Society of Construction Law, Dispute Resolution Board Foundation

B Sc(Hons) in Civil Engineering

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