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Claim Procedures and Emplyer Reps’ action

1 reply [Last post]
Wed, 2009-09-30 02:13
Sajid Balma
User offline. Last seen 13 years 23 weeks ago. Offline
Joined: 8 Jun 2007
Posts: 151
Groups: None
We have a contract based on FIDIC Silver Book.

The Employer was in default of timely payments of our invoices to the extent that it lasted almost six months.

Unfortunately, we did not serve timely notices although it was discussed in weekly meetings and therefore documentary evidence is also not substantially supported.

Anyways, we put a hold on procurement & consequently engineering activities. We sent ER a notice to claim EoT & in the same letter said that, pursuant to sub clause 16.1, we have the right to suspend/terminate the Contract if the Employer fails to pay us within the stipulated period of remedying the default.

After a lapse of 3 weeks to our letter, we received a reply from the ER that since he has 42 days, after receiving any notice to claim, to assess the merits of the claim, therefore we have no right to suspend/terminate the contract and threatened us to continue with the works or the Contract would be terminated by the Employer.

My understanding is that, the ER is clubbing two different issues together. We have a claim that has to go through the procedures as outlined in the Contract but, he can not deny any of our right under a different provision of the Contract. The Claims can be dealt separately and must not constitute a denial of any of Contractor’s rights.

I would appreciate, if I get any comments on this subject.

Thanks for reading my post.

Regards
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Replies

Thu, 2009-10-01 11:44
#1
Samer Zawaydeh
User offline. Last seen 5 years 39 weeks ago. Offline
Joined: 3 Aug 2008
Posts: 1664
Groups: Civil Engineering, Regional Representatives
Dear Sajid,

You are correct, the RE is mixing two issues here. You are advised to follow clause 16.2 "Termination by Contractor"

Please review the following clauses:
16.1. The RE has 42 days to send you evidence that they took the necessary action to satify their financial responsibilities.

16.2 Contractor can terminate if they do not receive the amount due under an Interim Payment Certificate within 42 days after the expiry of the time (56 days from submittal of the invoice). So 56+42 = 108 days (about 3 and half months). So you can send him another notice under this clause stating that you are terminating the Contract per this clause.

With kind regards,

Samer
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