Construction Law/Sub-Clause 13.8


Dear sir,

In one of our Contract which is based on FIDIC MDB 2010 Conditions of Contract, the Contractor has submitted a Statement under Sub-Clause 14.3 GCC for a period of 3 months. The particular conditions of Contract relating to Sub-Clause 13.8 GCC states the period ‘n’ being the one month which will be applicable to Pn ‘Adjustment multiplier’. The Contractor has divided the work done of each month separately as pn is to be applied on monthly work done. My query relates to current cost indices Ln, En, Mn.  Sub-Clause 13.8 states,

““Ln”, “En”, “Mn”, … are the current cost indices or reference prices for period “n”, expressed in the relevant currency of payment, each of which is applicable to the relevant tabulated cost element on the date 49 days prior to the last day of the period (to which the particular Payment Certificate relates); and”

The Contractor has to compute three adjustment multiplier ‘pn’ to be applied separately for each month of workdone as ‘n’ being the one month as defined in particular conditions.

The problem is that what current cost indices (Ln, En, Mn) should be used?
(i)   The indices relevant to 49 days prior to last day of the period of IPC, meaning the same indices for each Pn or
(ii)   Three different indices for each month relevant to 49 days prior to last day of each month of the period of workdone.

Your advices in this regard will be helpful to me.


Umer Shabbir

Dear Umer,

The clause appears to have been amended from the standard FIDIC MDB 2010 form, as I cannot find a mention of 49 days in the standard form.  

The basic philosophy is to compensate the Contractor when he is paid, not when he did the work, nor when he paid for the work, so the indices relevant to 49 days prior to last day of the period of IPC, meaning the same indices for each Pn should be used.

Construction Law

All Answers

Answers by Expert:

Ask Experts


Peter M. Elliott


First response to queries regarding extensions of time, variations orders, site instructions and payment using FIDIC and other forms of Conditions of Contract, based on English Law, and derivatives only. Anyone who needs advice about EoT should download and study the SCL Delay & Disruption Protocol before submitting a question.


Value . . .
It's unwise to pay too much, but it's unwise to pay too little. When you pay too much you lose a little money, that is all. When you pay too little, you sometimes lose everything, because the thing you bought was incapable of doing the thing you bought it to do.
The common law of business balance prohibits paying a little and getting a lot. It can't be done. If you deal with the lowest bidder, it's well to add something for the risk you run.
And if you do that, you will have enough to pay for something better.
. . . John Ruskin (1819 - 1900)
"We are too poor to buy something cheap"
.Romanian Proverb 2002
A lean compromise is better than a fat lawsuit. George Herbert (English poet 1593-1633)
I said it in Hebrew, I said it in Dutch,
I said it in German and Greek:
But I wholly forgot (and it vexes me much)
That English is what you speak!" Hunting of the Snark - Lewis Caroll
Match your presentation to the reader!
The joy of food lasts but an hour, of sleep but a day, of a woman, but a month, but the joy of a building lasts a lifetime. Syrian proverb.
Comments and observations leading to improvements in the translation of FIDIC Red & Yellow books into Romanian prior to approval by FIDIC (reference 'Preface to the Romanian edition')

Institution of Civil Engineers, Association of Chartered and Certified Accountants, Society of Construction Law, Dispute Resolution Board Foundation

B Sc(Hons) in Civil Engineering

©2017 All rights reserved.