NOTES ON FIDIC 4TH EDITION 1987, REPRINTED 1988 & 1992 RESOLUTION OF DIFFERENCES OF OPINION PRIOR TO REFERRAL TO DISPUTE

RESOLUTION PROCEDURE
The Contractor submitted its application for reimbursement of additional costs incurred as a result of devaluations of the Botswana Pula under its letter of 11 th January 2006. The application was ori inally made as a formal claim in terms of Clause !" of the #eneral Conditions of Contract $#CC% but this was subse&uently revised to an approach throu h the Contract Price 'd(ustment mechanism contained in Clause )0.1 of the Conditions of Particular 'pplication $CoP'%. The *n ineer responded to this submission in +ay 2006 in a document entitled ,*n ineer-s 'd(udication of Contractor-s Claim "' and "B./ in which various alternative proposals were set out/ and recommendin payment of a si nificantly lower amount then the Contractor-s ori inal submission. 0n turn/ the Contractor responded on 1th January 200) to the *n ineer-s ,'d(udication. and set out its various disa reements with the *n ineer-s recommendations and proposals/ to ether with contractual ar ument and motivation supportin its point of view. 0t has recently been su ested by a member of the *mployer-s le al advisory department that the Contractor-s puttin forward disa reements with the *n ineer-s ,'d(udication. document constitutes the brin in about or declaration of a dispute/ and that the correct way to proceed should now be by reference of the matter to Clause 6) of the #CC. The Contractor emphatically disa rees with this opinion/ since it is normal custom and practice within the industry to continue discussion and ne otiation on matters of disa reement until a reement between the *n ineer and Contractor has been reached. 2eferral of a matter to Clause 6) of the #CC is re arded as a last resort/ to be resorted to only when all else has failed. The term ,'d(udication. is not used in the Contract3 had the Contractor-s submission been made via Clause !"/ the *n ineer-s response could have been referred to as either a ,consideration. or as a ,determination. by reference to 4ub5Clause !".!. 4ince the Contractor-s submission was made in terms of Clause )0.1/ and not via Clause !"/ however/ the *n ineer-s response should be deemed to be in terms of 4ub5Clause !2.2 of the #CC/ whereby the Contract Price is bein ad(usted due to rates havin become inappropriate or inapplicable as envisa ed therein. 0n this instance/ the ,rate or price. that has become inappropriate or inapplicable is the amount enerated by the application of the Contract Price 'd(ustment 4chedule that is set out in CoP' Clause )0.13 this amount falls to be a reed upon between the *n ineer and the Contractor ,after due consultation./ in terms of sub5clause !2.2 of #CC. That the assessment and a reement procedure conducted between the *n ineer and the Contractor/ of amounts due payable to the Contractor in terms of the Contract is

envisa ed to be a fle6ible and on oin procedure/ and not restricted to the procedure set out in Clause 6) of the #CC/ is demonstrated by the provisions of 4ub5Clause 60.7 thereof/ whereby the *n ineer may in any 0nterim Payment Certificate ma8e corrections or modifications to any previous Certificate which shall have been issued by him. 9urther indications are iven in the #uide to 90:0C/ which/ althou h not a contract document/ is the official interpretative uide to the 90:0C 7th *dition Conditions of Contract3 The followin locations have relevance; o Pa e 11!/ first para raph/ re Clause !2.2; 0f the nature of the wor8 involved differs so much from that included in the ori inal Contract that the rates or prices are rendered inapplicable3 it is the *n ineer-s tas8 to a ree appropriate rates and prices with the Contractor. o Pa e 12)/ first para raph/ re Clause !6.1; This 4ub5Clause lays down the procedural rules for measurin the <or8s. 0nter alia/ the *n ineer obtains the Contractor-s a reement re ardin the measurement of the <or8s. o Pa e 1")/ first para raph/ re Clause 60.7; The *n ineer may/ if not satisfied with any item or part thereof included by the Contractor in his monthly statement/ delete such item and include it later when he is satisfied that it represents an amount due. 'lso/ the *n ineer may ma8e corrections in any monthly certificate to a previously issued certificate that he subse&uently deems needs correction. o Pa e 1!"/ first para raph/ re Clause 6); This Clause includes provisions for disputes to be referred to arbitration as a last resort. o Pa e 1!7/ first para raph/ re Clause 6); The term ,decision./ in the 90:0C 7 th Conditions/ has been reserved for use in Clause 6). 2eference to *.C Corbett/ 90:0C 7th/ ' Practical =e al #uide/ on Pa e 77" thereof/ elicits these opinions; o 1st Para raph; 0n practice/ a reference under Clause 6).1 will often be preceded by correspondence between Contractor and *n ineer in which the respective positions are set out. o =ast Para raph; There is no e6press time limit for a reference to the *n ineer. 0t is clear from both e6plicit and tacit interpretations of the above provisions and opinions that the 90:0C 7th form of contract provides for discussion/ consultation and ne otiation between the *n ineer and the Contractor at all sta es of the implementation and administration of the contract. 0t is not therefore necessary/ or even desirable/ to refer a matter to Clause 6) for resolution until such time as one of the parties/ usually the Contractor/ is certain that no other course of action is available whereby an entitlement may be further pursued.

The correspondin conclusion to be drawn is that no time limit e6ists with re ard to controllin on oin discussion/ consultation and ne otiation between the Contractor and the *n ineer. This is of course a very desirable circumstance that enables the best possible chances of amicable resolution of disa reements or potential disputes between the *n ineer and the Contractor. 17th 9ebruary 200)