Notices under FIDIC Silver Book 2017 Edition Part 14

This is part 14 in an ongoing series on notices under FIDIC Silver Book 2017. This post covers the provision for notices in Clause 20 (Employer’s and Contractor’s Claims).

Clause 20 (Employer’s and Contractor’s Claims)
Sub-Clause 20.1 (Claims). If the Employer is entitled to any additional payment from the Contractor or reduction in contract price and or to an extension of the Defect Notification Period (DNP), as well as if the Contractor is entitled to any additional payment from the Employer and or to the Extension of Time, then Sub-Clause 20.2 (Claims for Payments and/or Extension of Time) shall apply.

However, where the other Party has:

disagreed with the requested entitlement or relief or
is deemed to have disagreed if he or she does not respond within reasonable time,

a dispute shall not be deemed to have arisen. But the claiming Party may, by giving a notice, refer the claim to the Employer’s Representative and Sub-Clause 3.5 (Agreement or Determination) shall apply.

Sub-Clause 20.2 (Claims for Payment and/or Extension of Time)
Sub-Clause 20.2.1 (Notice of Claim). The claiming Party shall give a notice to the other Party not later than 28 days after the claiming Party becomes aware of the event, describing the event giving rise to the cost, loss, delay, or extension of the Defect Notification Period (DNP) for which the claim is made.

If no notices are made within the 28 days:

the claiming Party shall not be entitled to any claim and
the other Party shall be discharged from any liability in connection with the event giving rise to the claim.

However, if notice is given later than 28 days, the other Party shall, within 14 days after receiving the notice of claim, give a notice to the claiming Party accordingly with reasons in line with Sub-Clause 20.2.2 (Initial Response).

If this notice is received and the claiming Party:

disagrees with the other Party or
considers there are circumstances which justify late submission of the notice of claim,

the claiming Party shall include in its fully detailed claim under Sub-Clause 20.2.4 (Fully Detailed Claim).

If there is no notice within 14 days, the notice of claim shall be deemed to be a valid notice.

Sub-Clause 20.2.4 (Fully Detailed Claim). Claiming Parties shall submit:

a detailed description of the claim,
a statement of the contractual and/or other legal bases of the claim,
all contemporary records, and
detailed supporting particulars of the type of claim

within 84 days after the claiming Party becomes aware of the event or as mutually agreed.

If the claiming Party fails to submit the statement of the contractual and/or other legal bases of the claim within the time limit:

the notice of claim shall be deemed to have lapsed;
it shall no longer be a valid notice; and

the Employer’s Representative shall give a notice to the claiming party accordingly, within 14 days after this time limit has expired. If the Employer’s Representative fails to give notice timely, the notice of claim shall be deemed to be a valid notice.

Nevertheless, if the other Party disagrees with such deemed valid notice of claim, they shall give a notice to the Employer’s Representative, including details of the disagreement. Then, the agreement or determination of the claim under Sub-Clause 20.2.5 (Agreement or Determination of the Claim) shall include a review by the Employer’s Representative.

If the claiming Party receives a notice from the other Party and:

disagrees with such notice, or
considers there are circumstances that justify late submission,

then the fully detailed claim shall include details of the claiming Party’s disagreement or why such late submission is justified.

Sub-Clause 20.2.5 (Agreement or Determination of the Claim). After receiving a fully detailed claim under Sub-Clause 20.2.4 (Fully Detailed Claim) or an interim or final fully detailed claim under Sub-Clause 20.2.6 (Claims of Continuing Effect), the Employer’s Representative shall proceed under Sub-Clause 3.5 (Agreement or Determination) to agree or determine:

addition or reduction of amount
Extension of Time
Extension of Defect Notification Period (DNP)

to which the claiming party is entitled under the contract.

If, having received a fully detailed claim under Sub-Clause 20.2.4 (Fully Detailed Claim) or Sub-Clause 20.2.6 (Claims of Continuing Effect), the Employer’s Representative requires necessary additional particulars:

he or she shall promptly give a notice to the Contractor describing the additional particulars and the reasons for requiring them,
he or she shall nevertheless give his or her opinion or response on claims by giving a notice to the Contractor within the time limit for agreement under Sub-Clause 3.5.3 (Time Limits); and
the Contractor shall submit the additional particulars soon after receiving this notice.
Subsequently, the Employer’s Representative shall proceed under Sub-Clause 3.5 (Agreement or Determination) to agree or determine the matters.

Sub-Clause 20.2.6 (Claims of Continuing Effect). If the event giving rise to a claim has a continuing effect, the fully detailed claim submitted shall be considered as interim and the Employer’s Representative shall give his or her response on the claims by giving a notice to the claiming Party within the time limit for agreement under Sub-Clause 3.5.3 (Time Limits).

This guest post was written by Mansoor Ali, FICCP and Jishma Joy. It is the fourteenth post in a multi-part series and was originally published as two LinkedIn videos, viewable here and here.

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