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Construction Law/Claim issue under Sub-Clause 13.7


The issue is related to the increase in the initial visa fee, renewal fee, residence permit etc. after the base date of the Contract and the Contractors entitlement for reimbursement of such additional cost under Sub-Clause 13.7 of GCC. Please note that the subject contract was awarded in May 2010 and is administered under FIDIC 1999 Red Book.

With the initial notice under Sub-Clause 20.1 and 13.7 (within 28 days), the Contractor has provided the Schedule of new expenses, showing increase of fee for the year 2015, issued by the General Administration for Immigration, Department of Foreign Affairs (stamped and signed).

In addition to the FIDIC Sub-Clause 13.7 of GCC, we have the Particular Conditions of Contract with an additional Sub-Clause 6.13, stating that The Contractor shall be responsible for making all arrangements for and shall bear all costs relating to the obtaining of all necessary visa, permit, documents or other official permission for the movement of staff and labor as may be necessary in connection with the execution and maintenance of the Contract
Also it states that The Employer will assist the Contractor in obtaining for the expatriate personnel employed by the Contractor all residence permits, entry visa and other official documents and permissions, required in connection with the execution of the Contract.

This Sub-Clause 6.13 is added in Clause 6 [Staff and Labor].

Based on the above Sub-Clause 6.13 of PCC, the Engineer is of the view that the Contractor has no entitlement for reimbursement of such additional cost under Sub-Clause 13.7 and that the Employers liability is limited only to the assist the Contractor in obtaining such documents and permission.
Secondly the Engineer states that such a document, attached as evidence of the legislation is only a schedule and cannot be considered as copy of the official legislation from the Department of Foreign Affairs, to satisfy the requirements of Sub-Clause 13.7.

My opinion is that:
i.   the PCC statement is only limited to the basic expenses (as at the time of award of contract in 2010), but if there is any subsequent change in prices then it shall fall within the ambit of  Sub-Clause 13.7 and that for such increase, the PCC shall not nullify the GCC Sub-Clause 13.7
ii.   that this document available with the Contractor shall be considered as full evidence of the legislation
iii.   I think I shall use the schedule of fee for the year 2010 as the base reference and not 2014 to calculate the increase in cost, because year of award of contract is 2010, thought there have been subsequent increases every year in 2011, 2012, 2013 & 2014 since then.
An early response on the issue will be highly appreciated.

Your opinion is correct.

You made a correct action in submitting a notice on time of your claim under Sub-clause 20.1

Next thing you need is to submit your detailed particulars within the time frame mentioned under Sub-clause 20.1

Sub-clauses 6.4, 6.10, 6.13,13.7 and 20.1 are all relevant in your case.

The difference between the original fees and the revised fees (after Base Date) shall be reimbursable.

01. The change in law must take place after Base Date to satisfy the condition under Sub-clause 13.7.

02. This only applies to personnel hired before the date of change/modification.

Good Luck and hope the above helps!


Jonathan Peralta  

Construction Law

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Jonathan L. Peralta


Questions relating to construction claims, Extension of Time, Variations, Interim Payment and delay analysis under FIDIC Form of Contracts.


Experience in the following sectors: buildings, residential, infrastructure, civil and marine works. Have worked for different international contractors in Myanmar, Vietnam and the Philippines.

AACEI, U.S.A., Dispute Resolution Board Foundation,U.S.A., ASCE, U.S.A., PICE,Philippines

Bachelor of Science in Civil Engineering, Registered Civil Engineer in the Philippines

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