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Construction Law/Explaination about Delays Caused by Authority

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Question
QUESTION: Dear Sir,
According to FIDIC Red Book 1999, Sub Clause 8.5, if some delay
occurs due to delays caused by authority, the Contractor gets EOT
without any cost and profit, is this explanation right? If so,can you clarify about the cost and profit mentioned in the same Sub Clause 8.5.
for eg. To execute the works in the Site, there is a provision of importing equipments and tools from  other country.The Contractor was unable to import tools and equipments  in time eventhough he was trying his best for the substantiation of documents in the custom department and got  delay due to some other's reasons and paid demurrage cost for the same.
Now I want to be clear on: Should the Employer pay for the demurrage cost which the contractor has paid to the Custom Department? Does it include overhead and profit or not?

Best Regards,
Binod

ANSWER: Dear Binod,

Clause 8.5 states 'If the following conditions apply, namely:
(a) the Contractor has diligently followed the procedures laid down by the relevant legally constituted public authorities in the Country,..'.  I think that you will have difficulty in proving that you followed the procedures.  Clause 8 provides for EoT, but not for Cost or Profit.  You have to find another clause which provides for the reimbursement of Cost and Profit.  

On the basis of information provided, I do not think that the Employer should reimburse the cost of demurrage.  

---------- FOLLOW-UP ----------

QUESTION: Dear Sir,
I think  the Contractor can prove that he has diligently followed the procedures laid down by the ........ If so, how is it possible to reimburse the demurrage cost from the Employer? Could you advise me under which clause the Contractor can claim the reimbursement of that demurrage Cost.
Best Regards,
Binod

Answer
Dear Binod,

You submit your claim under clause 20.1.  You have to prove the following:

1. you investigated the requirement for documentation and the time required by the customs officers to clear goods;
2. you allowed an appropriate time in the programme for this activity;
3. you provided all the documentation on time;
4. the activity took longer than expected due to delays by the customs authorities; and
5. the delays affected an activity on the critical path

then you can claim for an extension of time.  Without an agreed EoT, you have no basis for reimbursement of any extra costs.  

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Peter M. Elliott

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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 www.eotprotocol.com before submitting a question.

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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')

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

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B Sc(Hons) in Civil Engineering

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