Construction Law/Delay Damages
QUESTION: Dear Madam,
As per FIDIC MDB Harmonized edition 2006, Sub-Clause 2.5 GCC states as follows;
"The notice shall be given ass soon as practicable and no longer than 28 days after the Employer become aware, or should have become aware, of the event or circumstances giving rises to the claim"
In case of Delay Damages, when the Contractor failed to comply with the Sub-Clause 8.2, what is the contractual time to give notice of the claim?
ANSWER: Dear Umer,
In case of Delay Damages for failing to comply with the Sub-clause 8.2, the Employer becomes aware of the event or circumstance giving rise to the claim at the Completion Date: if the Contractor did not finalize the Works and, therefore, they cannot be taken over by the Employer at the Completion Date, the Employer becomes entitled to levy Delay Damages and he should send, within 28 days, the relevant notice of claim according to the Sub-clause 2.5.
If the notice would be given before the Completion Date, the event of not finalizing the Works at the Completion Date would have not being occurred and it would be a kind of pre-notice, which is not foreseen in the Contract and does not produce effects.
Before the Date of Completion, the Engineer can act according to the Sub-clause 8.6.
Hope it helps.
---------- FOLLOW-UP ----------
QUESTION: Thanks, you have well clarified it. but there is a slight confusion in mind in a situation when the Contractor's progress is very less almost 20% at the completion date. Can the Contractor argue that the situation of not completing the Works within the Time for Completion is very well foreseeable by the Employer/ Engineer before reaching the Completion Date because the Employer should have become aware of the event giving rises to claim and it can be foreseeable from monitoring of Programme of Works.
I will be thankful for your valuable comments.
We have the exact situation some years ago, in a dispute on which a prestigious 3 member standing DAB (all the 3 members were and are on the FIDIC President List of Adjudicators) was requested to give a decision:
The Engineer, on behalf of the Employer, sent the notice of claim 2.5 one year before the Date of Completion, since it was obvious that the Contractor, having completed only about 15% of the Works after 2 years, it was impossible to complete the rest of 85% in the remaining 1 year. No other notice 2.5 and 8.7 was given after the contractual Date of Completion and the Employer relied on the notice given one year before the Date of Completion as being the notice of claim 2.5 and 8.7.
The DAB decided that at the date of the notice the event did not occur, therefore that notice could not count as a notice of claim 2.5 and 8.7. The Employer was found not entitled to Delay of Damages because of the lack of following the contractual procedure and he had to pay back the money to the Contractor (the money were paid to the Employer before the referral to the DAB).