Procedure for making a claim
Clause 20 [Employer’s and Contractor’s Claims] of the FIDIC Conditions of Contract for Construction, Second Edition 2017, (“FIDIC Red Book”) is the procedure for making and evaluating claims, and itself, does not demonstrate or provide the Contractor an entitlement to an extension of the Time for Completion (“EOT”) and additional payment from the Employer for prolongation costs.
Sub-Clause 20.1 [Claims] describes the circumstances in which a Claim may arise under the FIDIC Red Book, including “if the Contractor considers that the Contractor is entitled to any additional payment from the Employer and/or to EOT.”
The claim procedure set out under Sub-Clause 20.2 [Claims For Payment and/or for EOT] shall apply when the Contractor considers himself entitled to an EOT and/or additional payment, “under any Clause of these Conditions or otherwise in connection with the Contract”.
Entitlement arising otherwise in connection with the contract
Entitlement may arise “otherwise in connection with the Contract”, where there is no express provision included in the FIDIC Red Book, but one is implied by the Laws governing the Contract.
For example, the FIDIC Red Book does not expressly include a provision entitling the Contractor to an EOT and payment of Costs, or an adjustment of the Contract Price, where an act of misrepresentation by the Employer has caused delay and additional Costs to the Contractor. The Laws governing the Contract, can therefore be relied on, to form the basis of the Contractor’s entitlement to make a claim for an EOT and an additional payment for prolongation costs.
Entitlement arising under a clause of the FIDIC Red Book
Sub-Clause 8.5 [Extension of Time for Completion] of the FIDIC Red Book provides the Contractor an entitlement to an EOT, if completion of the Works is delayed because of any of the following causes of delay:
(a) A Variation
(b) A cause of delay giving an entitlement to EOT under a Sub-Clause of the FIDIC Red Book,
(c) Exceptionally adverse climatic conditions,
(d) Unforeseeable shortages in the availability of personnel or Goods caused by epidemic or governmental actions, or
(e) Any delay, impediment or prevention caused by or attributable to the Employer, the Employer’s Personnel, or the Employer’s other contractors on the Site.
Entitlement to additional payment, for costs of prolongation, does not arise under Sub-Clause 8.5 of the FIDIC Red Book, but does so where the cause of delay listed in a Sub-Clause of the FIDIC Red Book entitles the Contractor to an EOT (cause of delay under sub-paragraph (b) of Sub-Clause 8.5) and also, payment of Costs, or an adjustment of the Contract Price. These Sub-Clauses are listed below:
|Sub-Clause||EOT||Payment for Prolongation Costs
|1.9||Delayed Drawings or Instructions||✅||✅|
|1.13||Compliance with Laws||✅||✅|
|2.1||Right of Access to the Site||✅||✅|
|4.12||Unforeseeable Physical Conditions||✅||✅|
|4.23||Archaeological and Geological Findings||✅||✅|
|7.4||Testing by the Contractor||✅||✅|
|8.5||Delays Caused by Authorities||✅||❌|
|8.10||Consequences of Employer’s Suspension||✅||✅|
|10.3||Interface with Tests on Completion||✅||✅|
|11.7||Right of Access after Taking Over||✅||✅|
|13.7||Adjustments for Changes in Laws||✅||✅|
|16.1||Suspension By Contractor||✅||✅|
|16.2||Termination by Contractor||✅||✅|
|17.2||Liability for Care of the Works||✅||✅|
|18.4||Consequences of an Exceptional Event||✅||✅|
|19.4||Consequences of Force Majeure||✅||✅|
NOTE: The FIDIC Red Book does not entitle the Contractor to payment of Costs, or an adjustment of the Contract Price, for causes of delay listed under sub-paragraphs (c), (d) and (e) of Sub-Clause 8.4. If they are relied on, the Contractor will need to refer to the Laws governing the Contract to demonstrate its entitlement to additional payment for prolongation costs. Contractors shall rely on these sub-paragraphs of Sub-Clause 8.4 as a last resort, and only if the cause of delay cannot be classified under a Sub-Clause that entitles the Contractor to an EOT and payment of Costs, or an adjustment of the Contract Price.