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Construction Law/FIDIC Clause 8.7 Delay Damages


Query related to imposing delay damages in FIDIC red book 1999:
1.The completion date of the contract was extended by an approved extension of time claim but has past in the previous month. The contract is however still ongoing.
2.The Employer submitted a claim for delay damages to be imposed in the next interim payment certificate.
3.As per Clause 2.5 (Employer’s Claims), the Engineer must make a determination.
4.As per Clause 3.5 (Determinations), the Engineer must consult both parties to reach agreement.
5.The contractor objected to the imposing of penalties stating that it was unfair as there are other claims pending that may further extend the completion date.
6.The contractor has submitted a number of notices of intention to claim extension of time and 1 claim for extension of time.  These have merit and the EoT is likely to exceed the duration of the delay damages to be imposed in the next payment certificate.

In making a determination, are delay damages normally applied irrespective of pending claims or can the pending claims be considered a reason for deferring the imposing of the delay damages until the claims are resolved?  

The Contractor is also in financial difficulty and imposing delay damages will worsen this situation – can this also be used as additional motivation not to impose them as imposing the delay damages will have a negative impact?

Dear Alex,

Thank you for this question.

The Engineer, in assessing the Employer's claim, should take into consideration any matter which he considers impacts upon the Employer's entitlement. In the circumstances of knowing a further extension of time is due, or likely to be due, it would be wrong of the Engineer to find for the Employer.

You have noted that several notifications of entitlement have been issued but you have not followed up with the detailed claims. As such, I suggest that you call for a tripartite meeting as part of the Engineer's determination process, to discuss any extension of time issues that have not been answered.

If the Engineer continues and make a determination in the Employer's favour, you can raise the issue as a dispute for the DAB; however, I suggest that you use your time and resources usefully, and present your detailed claims.

I hope that this assists you.

Kind regards,
John Dowse

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John Dowse


Legal; contract interpretation; quantum; delay analysis. Practitioner in arbitration, adjudication and mediation.


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.

Chartered Institution of Civil Engineering Surveyors Chartered Institute of Arbitrators Institute of Directors Society of Construction Arbitrators

Various UK and International construction and legal publications.

LLB (Hons), Pg Dip (Legal Practice), MCInstCES MCIArb MIOD Barrister

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