In one of the construction groups on LinkedIn that I frequent, the following question was posed: [1]
In FIDIC contracts, can a claim for extension of time or additional payment be denied simply because the Contractor did not refer to the clause/contract provision under which an entitlement is claimed? [2]
FIDIC contracts include many provisions that allow for claims of time and money. An example of this is clause 2.1 which gives the Contractor an entitlement to an extension of time and payment of costs if the Employer does not give access and possession of the site. If an entitlement arises for the Contractor, it must, among other things, issue a notice of claim first, with some details of what occurred, and then, a fully detailed claim.
Notices of claim need not mention the clause. There is nothing in the claims procedure of the FIDIC 1999 or 2017 contracts that requires the Contractor's claim notices to refer to the contract provision granting the entitlement to be claimed. This omission in the notification does not invalidate the claim or the entitlement being claimed. However, omitting such a reference from the claim could have serious consequences depending on whether the contract is FIDIC 1999 or FIDIC 2017.
Fully detailed claims of FIDIC 1999 need not mention the clause. In FIDIC 1999, there is nothing in the claims procedure of clause 20.1 that provides that an entitlement would be lost if the claim does not refer to the provision of the entitlement being claimed. Therefore, if the Engineer rejects a claim solely for omitting the contract provision of the entitlement being claimed, the entitlement is not lost for this reason. Therefore, the claim, even if rejected, can be taken to the Dispute Adjudication Board ('DAB') for a decision at that level. [3] However, at either the Engineer or DAB level, it is best practice to refer to the contract provision of the entitlement being claimed. Otherwise, the Engineer or the DAB may not have the contractual tools needed to decide the dispute.
Fully detailed claims of FIDIC 2017 should always mention the clause. In FIDIC 2017, generally, if the claim does not include a statement of its contractual (or other legal) basis, the notice of claim will be deemed to have lapsed and be considered invalid (see clause 20.2.4, paragraphs 1 and 3). [4] The Engineer will probably interpret this clause as requiring reference to the contract provision or legal basis of the entitlement being claimed and will, consequently, reject the claim if it is not included. Without such a reference, it may be difficult, if not perhaps impossible, for the Engineer to properly evaluate and determine the claim. Therefore, there are arguments under clause 20.2.4 of FIDIC 2017 that the claimed entitlement could be lost if its contract provision is omitted from the claim.
However, FIDIC 2017 also extends a lifeline to claiming parties for this type of situation. Clause 20.2.5 may allow the omission or late delivery of the contract provision of the claim in certain justified circumstances.
The best practice will always be to refer to the contract provision of the entitlement in the fully detailed claim, whether under FIDIC 1999 or 2017.
This post is not legal advice. You should always consult a duly qualified lawyer on any legal matter or problem you may have. If you need legal advice on this or other related topics, you can contact me at gabriel.muleroclas@howardkennedy.com.
[1] An earlier version of this post was originally published in Spanish by Gabriel Mulero Clas on 25 July 2024 and it is herein translated into English by the same author albeit with the assistance of online and AI translators. See: https://insights.howardkennedy.com/post/102jehk/se-debe-mencionar-la-clausula-en-las-reclamaciones-fidic
[2] In the FIDIC MDB World Bank 2010 (revised in October 2017) contract in Spanish and the FIDIC 2017 contract translated to Spanish, the term used, "derecho", when literally translated to English, is: "right". In this translated article, the term "entitlement" is used to keep with the terminology used in the official English versions of the FIDIC 1999 and 2017 forms.
[3] In the FIDIC MDB World Bank 2010 (revised in October 2017) contract in Spanish, the term used, "Comisión para la Resolución de Controversias", when literally translated to English, is: "Commission for the Resolution of Controversies", but a better translation that does not change the essence of the words is: "Dispute Resolution Commission". In this translated article, the term "Dispute Adjudication Board" is used to keep with the terminology used in the official English versions of the FIDIC 1999 forms.
[4] In the FIDIC 2017 forms translated to Spanish, the term used, "caducado", when translated to English (in the sense of loss of validity), may be considered close to the terms "lapsed" or "expired". Notably, the term "caducado" is the verb in perfect tense of the noun "caducidad", which is a very specific legal concept in certain Spanish speaking civil law jurisdictions. In this article, the term "lapsed" is used to keep with the terminology used in the official English versions of the FIDIC 2017 forms.
Want to hear more from us? 
