What is the Procedure for “Additional Payment Claims” in 2017 FIDIC Silver Book?

“A claim process should be managed in a professional manner to reach the required results.”  

Clause 20 in 2017 Edition of the Silver Book states the procedure for notification and substantiation of the “Additional Payment Claims”.

Clause 20 also defines the decision making process of the Employer’s Representative.

1   Notice of Claim

28 Days Time Limit for the Claiminin Party

The Notice of Claim is to be given within 28 days after the Claiming Party became aware or should have become aware of the claim related event.

If the Notice of Claim is not given within 28 days, the Claiming Party is not to be entitled to any additional payment and the Other Party is to be discharged from any responsibility regarding the claim related event.

2   The Initial Response

Sub-Clause 20.2.2 defines and describes “The Initial Response” procedure.

If the Claiming Party fails to give the Notice of Claim within 28 days under Sub-Clause [Notice of Claim];

14 Days Time Limit for the Other Party

After receiving the Notice of Claim, within 14 days, the Other Party is to give a Notice to the Claiming Party with the reasons included. If the Claiming Party disagrees with the Notice or believes the presence of the circumstances which justify late submission of the Notice of the Claim, the Claiming Party is to include these details in its “Fully Detailed Claim” under Sub-Clause 20.2.4 [Fully Detailed Claim].

If the Other Party fails to give a Notice within 14 days, the Notice of Claim is to be deemed to be a valid Notice.

3   Fully Detailed Claim 

84 Days Time Limit for the Claiming Party

Within 84 days or other period [1] after the Claiming Party became aware, or should have become aware of the Claim related event, the Claiming Party is to submit the “Fully Detailed Claim” to the Employer’s Representative.

If within 84 days the Claiming Party fails to submit the statement under Sub-Paragraph (b) of Sub-Clause 20.2.4 [Fully Detailed Claim], the Notice of Claim is not considered as a valid Notice.

14 Days Time Limit for the Employer’s Representative

After the above mentioned time limit has expired, within 14 days the Employer’s Representative is to give a Notice to the Claiming Party.

If the Employer’s Representative does not give a Notice within 14 days, the Notice of Claim is to be deemed  to be a valid Notice.

If the Other Party disagrees with the deemed valid Notice of Claim, a Notice including the details of the disagreement is to be given to the Employer’s Representative by the Other Party. Then, the Claim is to be reviewed by the Employer’s Representative.

If the Claiming Party receives and disagrees with the Notice from the Other Party or believes the presence of the circumstances which justify late submission of the statement under Sub-Paragraph (b) of Sub-Clause 20.2.4 [Fully Detailed Claim], the Claiming Party is to include the details in its “Fully Detailed Claim”.

Fully Detailed Claim Includes [2]

A detailed description of the event or circumstances giving rise to the Claim.

A statement of the contractual and/or other legal basis of the Claim.

All the contemporary records [3] on which the Claiming Party relies.

Detailed supporting particulars of the amount of additional payment claimed (or amount of reduction or the Contract Price in the case of the Employer as the Claiming Party).

4   Interim or Final Fully Detailed Claim 

Sub-Clause 20.2.6 defines and describes the relevant procedure. If the Claim related event has a continuing effect;

The Fully Detailed Claim submitted is to be considered as interim.

The Employer’s Representative is to respond to the “First Interim Fully Detailed Claim” in accordance with the time limits under Sub-Clause 3.5.3 [Time Limits].

Monthly, the Claiming Party is to give further “Interim Fully Detailed Claims” with the accumulated additional payment claimed.

After the end of the effects of the claim related event, the Claiming Party is to give a “Final Fully Detailed Claim” within 28 days.

5   Agreement or Determination of the Claim 

The Employer’s Representative is to proceed under Sub-Clause 3.5 [Agreement or Determination] to agree or determine the Additional Payment Claim.

The Employer’s Representative is to give a Notice to the Contractor regarding the requirement of additional details with the reasons for it.

The Employer’s Representative is to respond regarding the contractual basis of the Claim in accordance with the Sub-Clause 3.5.3 [Time Limits].

The date which the additional details are received from the Contractor is the “Commencement Date” of the time limit.

FOOTNOTES

1. Period which is proposed by the Claiming Party and agreed by the Other Party.

2. The same Sub-Paragraph letters are used as in Sub-Clause 20.2.4 of the 2017 FIDIC Silver Book.

3. Contemporary Records Means; Records that are prepared or generated at the same time or immediately after the event or circumstance giving rise to the Claim. (The same Sub-Paragraph letters are used as in Sub-Clause 20.2.3 of the 2017 FIDIC Silver Book.)

This information is provided for your convenience and does not constitute any “Legal Advice”. This document is prepared for the general information of the interested persons. This should not be acted upon in any specific situation without appropriate legal advice.

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