Most FIDIC claims are weakened before any figure is calculated, because the notice was late, incomplete or sent to the wrong person. This note explains the notice rule in the editions most often used on donor-funded works in Kenya and East Africa. It is general information, not legal advice. Read your own contract, including the Particular Conditions, which often change the General Conditions.
Which edition is your contract on?
- 1999 Conditions of Contract for Construction (Red Book). Contractor's claims are dealt with in Sub-Clause 20.1 [Contractor's Claims].
- MDB Harmonised Edition. Several multilateral development banks use the 1999 Red Book in their standard bidding documents and have agreed a harmonised version. FIDIC's own note on the harmonised changes records that Sub-Clause 20.1 remains unchanged, while the changes in Clause 20 concern the dispute board provisions. That note describes the March 2006 version, so check the edition and the Particular Conditions of your contract.
- 2017 Conditions of Contract for Construction (Red Book, second edition). Clause 20 deals with claims and Clause 21 with disputes and arbitration. The procedure is in Sub-Clause 20.2 and applies to the Employer's claims as well as the Contractor's.
The 1999 and MDB rule: Sub-Clause 20.1
If the Contractor considers itself entitled to an extension of the Time for Completion or to additional payment, it gives a notice to the Engineer describing the event or circumstance. The notice is due as soon as practicable, and not later than 28 days after the Contractor became aware, or should have become aware, of the event or circumstance.
If the notice is not given within the 28 days, the Time for Completion is not extended, the Contractor is not entitled to additional payment, and the Employer is discharged from all liability in connection with the claim. The Contractor must also keep contemporary records, and must send a fully detailed claim within 42 days of becoming aware (or another period proposed by the Contractor and approved by the Engineer). For a continuing event, the detailed claim is interim, further interim claims follow monthly, and a final claim follows within 28 days after the effects end.
The 2017 rule: Sub-Clause 20.2
The 28-day period remains. Under Sub-Clause 20.2 the Notice of Claim must be given as soon as practicable and no later than 28 days after the claiming Party became aware, or should have become aware, of the event or circumstance. It must be in writing and expressly identified as a Notice of Claim.
Three features are new or sharper in 2017:
- The Engineer's 14 days. If the Engineer considers a notice late, the Engineer must say so within 14 days of receiving it. Without that response, the notice is deemed valid.
- A time limit on the detailed claim. The fully detailed claim is due within 84 days of the claiming Party becoming aware (or another period agreed with the Engineer), and it must include a statement of the contractual or other legal basis of the claim. Failing to meet this limit can also bar the claim, again subject to the Engineer's 14-day notice.
- A chance to respond. If the Engineer issues a notice saying the claim is time-barred, the claiming Party may explain in its detailed claim why the notice or the claim was in time, or justify the delay.
The sub-sub-clause numbering for these steps (20.2.1 for the Notice of Claim, 20.2.2 for the Engineer's response and 20.2.4 for the fully detailed claim) is taken from commentary, so confirm it against the published text of your contract.
“Became aware, or should have become aware”
The start date is often argued about. Write down, at the time, when the event was first noticed, by whom and on what record. A cautious approach is to treat the earliest date a reasonable project team would have recognised the event as the start, and to give a protective notice rather than wait for the full effect to be known. Whether time starts on the event or its consequences depends on the contract wording and the governing law.
Are time bars enforceable?
A paper hosted by FIDIC on clause 20.1 notes that, under English law, a clearly drafted condition precedent can be effective, but courts read such provisions strictly. Other legal systems differ. Whether a time bar would be enforced on your contract is a legal question for an advocate.
Practical checklist
- Find the contract's notice route. Who must receive the notice, in what form, and at which address or email? Check Sub-Clause 1.3 and the Particular Conditions.
- Open a notice log. Record the event, the date of awareness, the due dates and who is responsible.
- Diarise the dates. Day 14, day 21 and day 28 from awareness; then the 42-day (1999) or 84-day (2017) date for the detailed claim.
- Give the notice early and plainly. Describe the event and say that it may affect time or cost. Quantifying the claim is for the detailed claim.
- Prove delivery. Keep the dated copy, the transmission record or the signed receipt.
- Keep contemporary records from the first day: diaries, photographs, instructions, minutes and cost records.
- Repeat for continuing events. Provide interim updates monthly.
- Read the Particular Conditions and watch the Engineer's response. Periods are often amended, and under the 2017 conditions a timely objection to the notice has to be answered.
Questions about a specific contract can be sent to info@ceacm.co.ke. This page gives general information about contract and commercial management. It is not legal advice. Where a matter needs legal advice, we recommend you consult an advocate.
Sources: FIDIC, “Making claims for time and money: understanding the impact of notice provisions” (Fenwick Elliott paper hosted on fidic.org); Howard Kennedy, “FIDIC 2017: Clause 20, Employer's and Contractor's Claims”; FIDIC, “Changes to the FIDIC Construction Contract General Conditions” (MDB Harmonised, P. Boswell).