Q&A: Interim Claims and Taking Over vs Performance Certificates

The following questions, related to contractual issues arising from COVID-19, were posed during our ninth Construction Clinic, held in May 2020. Andy Hewitt's responses have been summarized from the original. The entire webinar may be viewed on-demand on YouTube. Question 1 Question: For a contract that has been terminated by the Employer and the amount due a termination is in dispute and goes to arbitration under the UNCITRAL rules. What is the interest rate to be applied if the FIDIC Yellow Book 1987 allows for the Bank of the Contractor’s residence plus 3%? Answer: It’s a difficult question because once things go to arbitration, the arbitrators would look at the issue; why the interest should be applicable; how it should be calculated. I am not a lawyer and the arbitrators will make decisions based on all of the facts. That being said, unless there are reasons why they shouldn't do so, I don't really see any problems if the contract says how interest shall be calculated and the…

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Q&A: Suspension vs. Delay

The following questions, related to contractual issues arising from COVID-19, were posed during our eighth Construction Clinic, held in May 2020. Andy Hewitt's responses have been summarized from the original. The entire webinar may be viewed on-demand on YouTube. Question 1 Question: (part 1 of 2): The first question relates to the FIDIC Silver Book. Due to COVID-19, our project was suspended. Initially, the Employer informed us that they ceased all inspections. This later led to suspension, because without receiving any approvals subject to inspections, the Contractor is unable to continue with the project. Since we did not have a written instruction to suspend, we, the Contractor, issued a letter informing the Employer that the project had been suspended upon their instructions. So going on as per Sub-clause 8.9 (Suspension), which states that after receiving the Notice, the Employer shall proceed in accordance with Sub-clause 3.5 (Determinations) to agree or determine the matters.…

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Q&A: Prolongation, JCT, NEC, and Force Majeure

In this blog post, ICCP President, Paul Gibbons, answers questions related to issues arising from COVID-19. He compares claiming for COVID-related prolongation costs, profit, and extension of time under three standard forms of contract, discusses financing charges and DAB decisions, and looks at provisional sums. These questions were answered in our sixth Construction Clinic session, which took place in May 2020. The entire webinar may be viewed on-demand on YouTube. Question 1 Question: If COVID-19 is a force majeure event and the employer is a government department and there was a change in law that has restricted movement, broken down the supply chain, and restricted air travel of the Contractors' experts, will the Contractor be entitled to prolongation costs, profit, and extension of time? And if so, what kind of documents can support such a claim in case the Contractor has COVID-19 delays? And indeed, in that regard, what can his defence be for liquidated damages? Answer: I'm not…

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Q&A: Force Majeure, Suspension of Works, Civil Law and FIDIC

In this blog post, Steering Committee member, Andy Hewitt, answers questions related to claims submissions during COVID-19. This blog has been extracted from our fifth Construction Clinic session, which took place in April of 2020. The entire webinar may be viewed on-demand on YouTube. Question 1 Question: Under the FIDIC contract, when the Engineer administers a contract in civil law jurisdictions, to make a determination for claims, what is the best way to deal with such rules of the common law as a time bar for Notices and prevention principles? Answer: For those unfamiliar with either civil law or FIDIC contracts, let me give you a bit of background. The FIDIC requirements have a lot of very stringent requirements for the Contractor to submit Notices and say very clearly and unequivocally that if the Contractor doesn’t submit the Notices within the timeframe, he is not entitled to anything. Now, if your contract was signed under a common law jurisdiction that is exactly what…

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Q&A: Prolongation, JCT, NEC, and Force Majeure

In our third Construction Clinic session, which took place in April 2020, Paul Gibbons answered questions related to prolongation and NEC and JCT contractual issues arising from COVID-19. The following questions have been excerpted from that session. The entire webinar may be viewed on-demand on YouTube. Question 1 Question: What is the remedy under the NEC3 Engineering Construction contract where there is a defect notified by the Employer, but this is a latent defect and notified after the defects date. Is the Contractor obliged to correct this? Answer: The NEC3 sets out the obligations of the Project Manager and the Contractor. The obligations related to notifications of defects are set out in clause 42. The Contractor’s obligations in terms of dealing with and resolving the defect is set out in clause 43. With latent defects after the defects date, it is the Contractor’s responsibility until the end of the limitation period under English law, which is either 6 or 12 years depending…

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