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Construction Law/Financial Charges Duration


Dear Sir!

This is followup question of my previous question dated 19 Feb 2015. i.e Sub-Clause 14.8 FIDIC 1999 EPC says, if the Contractor does not receive payment in accordance with Sub-Clause 14.7 (Timing for Payment), the Contractor shall be entitled to receive financing charges compounded monthly on the amount unpaid during the period of delay. The Employer was to pay an IPC amount within 56 days but he actaully make payment on 156th day. So he delayed IPC payment for net 100 day. He calcualted Fin Charges for 100 delay days say X amount. But failed to pay the X amount of Fin Charges on the same date of payment of IPC amount on 156th day.

He after passing another 60 days (Total 156+60=216 days of submission of IPC)paid us the same X amount of Fin Charges calculated on 156th day. We are of the opinion that X amount is the Principle Amount for 60 delay days and Fin Charges shall be paid to us on X amount for 60 adys. What is your opinion.

Dear sir, you replied as " As for I could understand from your question,I feel that you should be paid
1)x amount of fin charges calculated  on 156 day +  ipc amount due and
2)fin charges on x amount  for another 60 days as i agree with you that it is now part of prin. amount but you have not mentioned why he disagreed with your approach

Now come to my followup question, Sir the Employer says that as per Sub-Clause 14.8, the Contractor is entitled to receive fin charges on amounts of an IPC unpaid during the delay. (Sub Clause 14.7 (b). So, claiming Fin charges for delay payment of fin charges claculated at the time of payment of IPC is extra contractual. I need your further advice sir.

Dear sir,
The basic entitlement of the contractor is to receive fin charges on any due payment if paid beyond 56 days on delayed period at stated rate.So i donot agree with your last line.You have not given any reason why you consider this as extra contractual
Regards-liaqat hayat

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Liaqat Hayat


I can answer questions based on FIDIC 4 and FIDIC 1999 [design-build] with particular reference to time extension , price adjustment and disputes. I am in particular more inclined for response to points pertaining to how claims should be framed and put up in case of technical or other contractual shortcomings. Regarding procurement matters I have spent over 5 years as procurement specialist for highway authority and dealt with numerous claims and disputes in the capacity of "The Engineer" .

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