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This paper has been written to examine in detail the requirements and consequences of Sub-
Clause 20.1 of FIDIC Redbook 1999 edition.
Baker states that:the contract administration provisions of the FIDIC forms were to be
characterised as one word, the word would be communication. While failure to observe notice
requirements or other mandatory procedures may have consequences in terms of rightsit is not
the primary purpose of those requirements to deprive the Parties of entitlements through the
artificial creation of procedural hurdles.[1]
The purpose of Sub-Clause 20.1 is to give procedures for the dealing with notification of and
justification of extension of time claims and additional payments under the FIDIC Redbook 1999
form of contract. It also sets out the decision process required to be undertaken by the Engineer.
a) Notify the Engineer of a claim within 28 of when the Contractor became aware of or should
have become aware of an event or circumstance
b) Submit within 42 days of when the Contractor either became aware of or should have
become aware of an event or circumstance, a fully detailed claim and full supporting particulars
c) Keep contemporary records to support his claim and permit the Engineer to inspect these
records, obtain copies and/or instruct for additional records
Under FIDIC a claim is nothing more than a pipe dream unless notice has been given in
accordance with the contract. A claim is an assertion of a right in connection with or under the
contract.
It is acknowledged that in the Middle East we are generally working in civil law jurisdictions which
have been heavily influenced by Shariah law. I have included for the way of comparison only
references to case law from common law jurisdictions.
1.2 Authorship
The notes and comments contained below are those of the author. It is recommended that since
all claims are unique that appropriate advise be sort on an individual basis.
(Paragraph 1) - If the Contractor considers himself to be entitled to any extension of Time for
Completion and/or any additional payment, under any Clause of these Conditions or otherwise in
connection with the Contract, the Contractor shall give notice to the Engineer, describing the event
or circumstance giving rise to the claim. The notice shall be given as soon as practicable, and not
later than 28 days after the Contractor became aware, or should have become aware, of the event
or circumstance.
(Paragraph 2) - If the Contractor fails to give notice of a claim within such period of 28 days, the
Time for Completion shall not be extended, the Contractor shall not be entitled to additional
payment, and the Employer shall be discharged from all liability in connection with the
claim. Otherwise, the following provisions of this Sub-Clause shall apply.
(Paragraph 3) - The Contractor shall also submit any other notices which are required by the
Contract, and supporting particulars for the claim, all as relevant to such event or circumstance.
(Paragraph 4) - The Contractor shall keep such contemporary records as may be necessary to
substantiate any claim, either on the Site of at another location acceptable to the
Engineer. Without admitting the Employers liability, the Engineer may, after receiving any notice
under this Sub-Clause, monitor the record-keeping and/or instruct the Contractor to keep further
contemporary records. The Contractor shall permit the Engineer to inspect all these records, and
shall (if instructed) submit copies to the Engineer.
(Paragraph 5) - Within 42 days after the Contractor became aware (or should have become
aware) of the event or circumstance giving rise to the claim, or within such other period as may be
proposed by the Contractor and approved by the Engineer, the Contractor shall send to the
Engineer a fully detailed claim which includes full supporting particulars of the basis of the claim
and of the extension of time and/or additional payment claimed. If the event or circumstance giving
rise to the claim has a continuing effect:
(Paragraph 6) - Within 42 days after receiving a claim or any further particulars supporting a
previous claim, or within such other period as may be proposed by the Engineer and approved by
the Contractor, the Engineer shall respond with approval, or with disapproval and detailed
comments. He may also request any necessary further particulars, but shall nevertheless give his
response on the principles of the claim within such time.
(Paragraph 7) - Each Payment Certificate shall include such amounts for any claim as have been
reasonably substantiated as due under the relevant provision of the Contract. Unless and until the
particulars supplied are sufficient to substantiate the whole of the claim, the Contractor shall only
be entitled to payment for such part of the claim as he has been able to substantiate.
(Paragraph 8) - The Engineer shall proceed in accordance with Sub-Clause 3.5 [Determinations]
to agree or determine (i) the extension (if any) of the Time for Completion (before or after its
expiry) in accordance with Sub-Clause 8.4 [Extension of Time for Completion], and/or (ii) the
additional payment (if any) to which the Contractor is entitled under the Contract.
(Paragraph 9) - The requirements of this Sub-Clause are in addition to those of any other Sub-
Clause which may apply to a claim. If the Contractor fails to comply with this or another Sub-
Clause in relation to any claim, any extension of time and/or additional payment shall take account
of the extent (if any) to which the failure has prevented or prejudiced proper investigation of the
claim, unless the claim is excluded under the second paragraph of this Sub-Clause.
2 Sub-Clause 20.1 Dissected
2.1.3 Notice
2.1.3.2 28 Days
Sub-Clause 1.1.3.9 defines days as calendar days. The requirement to submit a notice as soon
as practicable but within 28 days, is a condition precedent under this Contract.
Wherever these Conditions provide for the giving or issuing of approvals, certificates, consents,
determinations, notices and requests, these communications shall be:
(a) in writing and delivered by hand (against receipt), sent by mail or courier, or
transmitted using any of the agreed systems of electronic transmission as stated in the Appendix
to Tender; and
(b) delivered, sent or transmitted to the address for the recipients communications as
stated in the Appendix to Tender.
Based on this definition, notice has to be specific and in writing. Oral notice or notice via minutes
of meeting may not satisfy this stipulation. However, if knowledge can be shown to have given to
the Employer of the event or circumstance then that may prejudice their rights. This is particularly
relevant in common law jurisdictions, but may have a different outcome in civil law countries.
Finally the notice has to contain a description of the event or circumstance giving rise to the claim.
Notwithstanding, the above, it is still advisable for any notice given under Sub-Clause 20.1 to
actually state that it is done so.
2.2 Time bar on claim
If the Contractor fails to give notice of a claim within such period of 28 days, the Time for
Completion shall not be extended, the Contractor shall not be entitled to additional payment, and
the Employer shall be discharged from all liability in connection with the claim. Otherwise, the
following provisions of this Sub-Clause shall apply.
It is clear that the 28 day time limit is a condition precedent for the Contractor to be able to pursue
his claim. This is even more evident if this paragraph is read in conjunction with the last paragraph
of Sub-Clause 20.1.
The Contractor has to keep contemporary records. Acting Judge Sanders in Attorney General for
the Falklands Islands v Gordon Forbes Construction (Falklands) Limited[24]stated that
contemporary records were original or primary documents, or copies thereof, produced or
prepared at or about the time giving rise to a claim, whether by or for the contractor or the
employer.
Furthermore Judge Sanders found that it was not possible to avoid the requirement of detailed
record keeping at the time of the event by the use of witness statements as witnesses memories
may fail over time. There is no substitute for contemporaneous records.
The Contractors obligation to keep records is very broad and has to be undertaken without
instruction from the Engineer.
What is important with contemporary records is that they are the records taken at the time of the
event with an emphasis on instantaneous keeping of records or at least very close to the time of
the event.
Ellis Baker suggests that in relation to claims for both an extension of time and additional cost due
to the Contractor being delayed in his progress of the Works, such records might include:
regular updates to the programme setting out the actual progress of the Works, in
particular the activities affected by the delaying events, the impact of the delays to the affected
activities on the progress of the Works and revisions to the planned sequence and timing of the
remaining work to accommodate the delaying event;
records of the actual resources involved, including personnel, equipment and materials,
based on progress;
records of actual expenditure incurred, including invoices and purchase orders;
records of any resources which were standing or uneconomically employed;
records of any overtime worked and the cost of such overtime;
regular progress photographs and/or videos, taken monthly, weekly or even daily, if
appropriate;
regularly updated registers, for example the drawings register, which should record all
revisions made to drawings and when they were made;
site diaries
records relating to specific work activities such as piling records, concrete pour records
and steel fabrication records; and
minutes of meetings[25]
The Engineer may request additional records be either kept or submitted. In determining what
records are kept both the Contractor and Engineer need to keep in mind what records may be
required to substantiate a claim.
Within 42 days after the Contractor became aware (or should have become aware) of the event or
circumstance giving rise to the claim, or within such other period as may be proposed by the
Contractor and approved by the Engineer, the Contractor shall send to the Engineer a fully
detailed claim which includes full supporting particulars of the basis of the claim and of the
extension of time and/or additional payment claimed. If the event or circumstance giving rise to the
claim has a continuing effect:
2.5.1 42 days
The time stipulation contained within this paragraph is not a condition precedent like the 28 day
provision of the second paragraph of the sub-clause because there is no consequence stipulated
should the 42 days not be met, however failure to meet this time is still a technical breach of the
contract as the use of the term shall makes it mandatory.
In the Australian Case of Kane Constructions Pty Ltd v Sopov[27] which adopted the UK case
of McAlpine Humberoak v McDermott[28] it was found:
McApline outlines the general approach which should be taken with respect to EOT claims. More
specifically, with EOT claims, the burden of proof is on the claimant to establish actual
delay. Whilst theoretical calculations, particularly those contained in computer software programs,
are useful tools in the building industry, generally further information will be required. Whilst there
may be assumptions and calculations, it is necessarily a matter of the claimant proving in the
proper way that there has been actual delay such as to substantiate claims for reimbursement.