Construction Law/Split DAB decision

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Question
QUESTION: Hullo John
I have been posting queries to Peter, but I see he now on vacation.
Our DAB decision was split by agreement into two portions, Time Bar items and Non Time Bar Items.
The rulings of the Time Bar items were handed down in Sept 2014. Following this and within 28days I issued a Notice of Dissatisfaction. The Employer was Time Barred on Delayed Damages. Now;
1. the rulings of the Non Time Bar items will be made evident in May 2015.
2. The Employer has not issued any Notice of Dissatisfaction
3. The DAB has stated that my Notice was submitted TOO soon and should only have been submitted after the final rulings.
4. The Time Bar rulings found that a certain portion was not time barred and in fact we were owed the money.
Am I correct in thinking that the items covered by the first rulings are closed and the DAB is functus oficio it terms of those portions and that I was correct in submitting the Notice of Dissatisfaction and that the Employer is Time Barred should he now issue a Notice of Dissaction for items for the first ruling. Finally payments ruled payable should be paid now and not after the event.
Best Regards

ANSWER: Dear Mike,

Thank you for this question. I am pleased that you have chosen to come to me, albeit at a late time.

I presume that you are working with a FIDIC contract. Further I must assume until you advise otherwise that the standard terms and conditions have not been amended.

If the DAB has, with the agreement of both Parties, made a decision on part of the referral now then, in my view, time for issuing the notice of dissatisfaction runs from the date of the decision.

I note that it is the DAB who has stated that your notice of dissatisfaction is too early. I consider that the matter of a notice of dissatisfaction is nothing to do with the DAB. Such notices are issued between the Parties only. However, please consider the point made in my next paragraph here below.

You are correct in stating that once the DAB has issued a decision on matter the DAB is functus officio; however you need to be careful over the wording of the decision to ensure it is final decision and that the DAB has not merely given an interim advice, which is non-binding. Here I would have to look further at the exchanges with the DAB.

You have said that the Employer's claims are time barred. Unless the contract has made express provision for the time in which the Employer must submit its claims and has made that time a condition precedent, the standard FIDIC contract does not place any time restraint on the Employer making its claims; as such the claims cannot be time barred without particular amendment of the contract clauses.

Based upon the assumption that the decision of the DAB is a decision and not merely an advice, then the decision ought to be final and binding unless overturned in arbitration. However there is a lacuna in the standard FIDIC wording, which FIDIC sought to close by an amendment of the standard clauses, which allows a Party against whom a DAB decision has been issued to delay payment pending arbitration.



I hope that this assists you.

Kind regards,
John Dowse

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

QUESTION: Hullo John
Firstly, thanks for the prompt response.
Yes we were working to FIDIC Red Book 1999. The standard terms and conditions relating to my arguments put forward to you have not been amended.
The decision handed down was an Interim Decision only, relating to the time bar items and excluded the non time bar items. The DAB's words being "In the result, I hand down the following Interim Decision, namely"
You are correct in that there is no laid down time for the employer's claims, however it is over 2 years since the works were completed. Does this mean that I can expect the claim to come even though the DAB has time barred the employer.
You have used the term in "my view", does this mean that the timing of the NoD is arguable.

Best Regards

ANSWER: Dear Mike,

Thank you for this question.

The DAB has not helped here, as unless there is provision in the DAB Agreement, or the Parties have agreed and confirmed to the DAB, then an Interim Decision may no effect at all. I would need to see a copy of the DAB agreement and the Interim Decision to advise further in this respect, particularly to see if the wording of the Interim Decision indicates whether the DAB intended it to be binding in the interim.

I used the phrase "in my view" in the previous answer in respect of the interim decision, which is an issue not addressed by the usual DAB rules and, therefore, is subject to interpretation.

As to the Employer's claims, even after  the Contract is finished, that is after the Performance Certificate is issued, both Parties remain liable to fulfil any obligation which remains unperformed; the contract remains in force. I would be interested to read the DAB's reasons for its decision to time bar the Employer's claims in this instance. At the present time I can conceive that it is only for reasons outside of the contract.




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.)


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

QUESTION: Hullo John
I have been awarded a final and binding DAB decision in accordance with the Red Book. We are operating in Southern Africa. We are a small company and they are a big one. How do we go about forcing them to make payment of the amount awarded to us? They just ignore the invoice.

Regards

Answer
Dear Mike,

Thank you for this follow up question.

The DAB decision has temporary biding effect and should be capable of enforcement in a local court.




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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