Construction Law/Delay in certification of claim
Dear Sir! We are the Contractor working under EPC FIDIC 1999 at an Irrigation Project in Pakistan. Sir we submitted a claim 23 months ago to the Employer's Representative in July 2014. We were asked for some related evidences and further supporting documents after a month of submission of our claim, which were submitted by us in Sep 2014. After that the Employer took 21 more months to finalize the calculations and getting approval of his concerned higher offices for payment of that claim to the Contractor.
My question is what is the reasonable time for approvals of claim and certification of amount "as per Sub Clause 1.3 of FIDIC 1999 EPC".
Our stance is that once the Employer satisfied with the supporting documents provided by the Contractor, he should approve the claimed amounts in 42 days max. as per Sub Clause 20.1 para-7 which states "within 42 days after receiving a claim or any further particulars and supporting documents, or within such period other period as may be proposed by the Employer and approved by the Contractor, the Employer shall respond with approval, or with disapproval with detailed comments."
My second question is that whether the Contractor is entitled to receive financing charges on the approved claimed amounts? What will be the start date of financing charges. In my point of view the start date of fin charges may be (submission date of claim + 42 days for certification + 56 days grace period as per Sub Clause 14.7.) Kindly advice.
Thank you for your questions and like to respond as follows:
Question-1: I tend to agree with your notion that it should be within 42 days. There is no specific limit for reasonable timing and depend upon the circumstances and nature of your claim but still I feel that the Employer's Representative can deal with case within 42 days under normal circumstances.
Question-2: It appears that the Employer has approved your claim in principle but has not informed you anything on it officially. The start date of financing charges should be after 42 days of the approval of the Claim.
Presently I can answer your questions to this extent only unless I hear more specific observations from your side and shall be glad to assist you.
Cell # 0333-5610760