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Construction Law/Contractor's Liability


The question pertains to a construction project being executed by my organization in the UAE, using FIDIC form of contract (Red Book; 1988/1992).
An issue has arisen due to The Engineer’s holding the Contractor liable to ‘rectify’ a car parking basement ramp due to the ‘as –constructed’ clear head room requirement above the ramp being ‘inadequate’.
The background to the issue is as follows:
a)   The Engineer has issued architectural as well as structural drawings for construction (IFC) for the RCC ramp which leads to the basement car park from ground floor.
b)   The structural drawings comprise structural details of ramp (waist slab) and ground floor elements (overhead down-stand beam).
c)   The architectural drawing comprises architectural details and shows structural elements only indicatively without specifying location or size of structural elements like beams in either plan or sections, and, in particular, does not show any beam down standing.
One of the sections, however, specifies the clear head room requirement above the ramp at the edge of ground floor slab up to its soffit from the top of ramp.
d)   Much after construction (352 days) of the ramp as well as ground floor structural works, which have both been carried out in accordance with the structural drawings, the Engineer has issued an NCR to the Contractor stating that the clear head room available above the ramp is not in conformity with the architectural drawing.
e)   It is pertinent here to note that the corresponding structural drawing, while not showing any change in the level/slope of the ramp waist slab, shows a supporting down stand beam at the edge of ground floor slab.
f)   Also pertinent to note is that the shop drawing, prepared by the Contractor prior to casting the slab, while showing both the supporting down stand beam as well as ramp waist slab according to the size, location and level shown in the structural drawing, also shows the clear head room above ramp and up to the soffit of down stand beam to be the same as shown in the architectural drawing.
While persisting with the NCR, the Engineer holds the Contractor liable for the following:
a)   Failing to point out the discrepancy between the architectural and structural drawings.
b)   Failing to prove that structural drawings contained an error.
c)   Proposing a solution to the problem along with its structural design.
a)   Carrying out the necessary rectification at no without claim to extra time or cost.
The Contractor has argued as follows, while denying his liability:
a)   Structural concrete works have been executed as per the IFC drawings issued by the Engineer, which are based on the structural design carried out by the Engineer; accordingly, the clear head room, as available, is the same as designed by the Engineer;
b)   While accepting that the discrepancy between architectural and structural drawings was not pointed out explicitly by him, he has contended that prime responsibility to comply with the clear head room requirement as specified in the architectural drawing lay with the Engineer while carrying out the structural design.
c)   Due to the fact that the structural works have been carried out as per the structural IFC drawings and approved by the Engineer as such, no non-conformance has been committed by him, and the NCR issued by the Engineer is, therefore, invalid
d)   The necessary rectification shall be carried out if instructed as variation to the Contract but in accordance with the structural design solution provided by the Engineer by virtue of being the party responsible for design engineering for the project.
Kindly advise suitable course of action for the Contractor under the Contract, especially since the he has been held liable to Clauses 17.1; 39.1 & 39.2; 60.9; and 62.1 by the Engineer.

Dear Sarvesh,

Thank you for your question.

As per any Red FIDIC Book, it is Contractor's task to execute the Works as described in Drawings, Technical Specifications, BoQs.

Whatever shop drawings (execution details) the Contractor may need to prepare, are solely for detailing how exactly shall be executed what he has been requested to, as per the Contract, but not to design any technical solution, or likewise.

As per described situation, the Engineer should indicate under which Sub-Clause is the Contractor liable to check the design of the Employer/ Engineer.

I see the Engineer has included a long list of Sub-Clauses, let's deal with them one by one:

- 17.1: that refers to setting out. Did the contractor made any mistake in setting out the works, e.g. building anything different, or in a different place than indicated in the design provided by Engineer/ Employer? I suspect "No", hence I see no relevance of this Sub-Clause;

- 39.1: yes, you have to remove the Plant and materials that "are not in accordance with the Contract". What Plant, what materials?! If Engineer thinks of removing the works that are not in accordance with the Contract, he has to demonstrate that is the case. To me, as long as the Engineer has given a specific Instruction, which was executed as instructed, then resulting works are according to the Contract. Any removal and correction can be instructed, but as a Variation Order;

- 39.2: I still did not see "default on the part of the Contractor"!!!

- 60.9: I don't see the point! What kind of Employer's liability you did not include in your Final Statement?! As I understand, the Engineer has now discovered a problem, which is to be decided whose fault is. What's the connection with the actual case?

- 62.1: I still don't see how does this Sub-Clause sustain his point of view, or how this answers to the basic question "Whose fault is?"

Seems to me the Engineer made a terrible mistake and now he's desperate to find no matter what to find someone else to blame. Of course, Contractor is most at hand!

To analyse Engineer's points:

a) Failing to point out the discrepancy between the architectural and structural drawings: - was that the duty of the Contractor? Does that mean the Engineer says "I was wrong, but you were more wrong for not having seen my mistake"? No, I disagree with that. As said in the beginning, Contractor's task is to execute the Works, not to check design. OK, if he spots something fine, but otherwise that is not his duty. Engineer should indicate the precise Sub-Clause that establish such duty!

b) Failing to prove that structural drawings contained an error: - well, I suspect the wrong outcome is precisely the sought proof. Honestly, I never seen a wrong design executed and resulting into a correct construction!!!

c) Proposing a solution to the problem along with its structural design: - again, under which Sub-Clause lays that duty?! IF, I underline, IF, the Contractor spots a problem, he reports it to the Engineer and asks for an Instruction.

d) Carrying out the necessary rectification at no without claim to extra time or cost: - yes, of course, but only for aspects for which the Contractor is at fault, not for Engineer's errors! As we seen so far, based on provided information, that does not seem to be the case.

Finally, to answer your request for a "course of action for the Contractor under the Contract", suggest:

- you ask the Engineer to demonstrate his position, i.e. under which Sub-Clauses is stated that Contractor is responsible for the design or for correcting it and

- you ask the Engineer to issue a Variation Order for correcting the problem, asking of course for the related Extension of Time and costs.

Trust that answers your question, good luck!

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Over 20 years of experience in the field of design, works supervision, construction, management of aid funds and technical assistance for various types of contracts implementation, including severe conflictual contractual situations leading to Claims and disputes. Claims/ Contract management, Disputes adjudication, Arbitration.

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