Construction Law/Liability of members in a consortium contract
QUESTION: Dear Jonathan,
Good Day to you.
We are an EPC International Contracting company having a consortium contract with one a local company here in UAE.
project is now on exectuion state of the construction.
Our company is the leader of the consortium.
I just wanted to know the consortium conditions wherein one member is behind of the project schedule that is affecting the whole project.
Now, in our case, we are behind the schedule for approx 3 months now, but our parnter is more than behind of their own schedule..
If our company would like to invest/spend more just to catch up with our schedule, should we also claim a portion of this from the other member, or should be share the expense as we are both partners in this consortium.
so basically, we wnat to know each members liability in case one member is behind schedule; whats the right if the consortium leader in terms of claims; do we share the same laibility / expense to catch up with the main project schedule?
what does FIDIC says about consortium members liability in cases like this? do you can the fidic article with regards to this issue?
Looking forward for your assistance and clarification.
Thanks a lot in advance
ANSWER: Dear Ysmael John Yabut,
The exact answers to your questions can be found to the Schedules in your Agreement with your JV.
It must be defined there clearly, the Obligations of each Party to the Consortium. Parties in Consortium shall be liable to the Client for any delays to the Works.
However, the exact details regarding apportionment and procedures must be clearly defined and outlined in the Agreement.
Usually the other Party (Party in default) must indemnify the other Party.
I suggest to review clearly your Contract. I cannot provide further information/assistance in the absence of the Agreement used.
Hope this helps.
---------- FOLLOW-UP ----------
QUESTION: Dear jonathan,
this is just continuation of my ff up questions.
you can refer to the other conditions here attached.
Looking forward for your feedback and opinion...
Dear Ysmael John Yabut,
The Member of the Consortium who suffered delay can claim to the Client if the cause of the delay is due to the fault of the Client.
If the cause of the delay is due solely to the other Member, the Member (who suffered due to the fault of the other Member) can claim to the Member who is in default.
For any claim, the additional Costs being claimed must be substantiated by proper documentation, meaning you need to provide evidences showing actual cost incurred due to delay of the other Member who is in default.
Hope this helps and Good Luck!
Jonathan L. Peralta