The Contract is base on FIDIC 1987 4th, Re-printed 1992
Interim payment certificate Submitted to Employer.
Employer failed to make payment within stipulated time. therefore the contractor stopped the the working due to non payment. in this regard his resources like equipments and manpower became idle.
Refer to Default of Employer clause.
For the period that the project is suspended, contractor may request for any idle equipment cost which may certify with evidences that they were idle for this project. Refer to Default of Employer clause.
In case of non-payment of any due amount under Contract, your initial proceeding may be claim the interest as indicated in Sub-clause 60.10, Time for Payment, which stipulates that “ In the event of the failure of the Employer to make payment within the times stated, the Employer shall pay to the Contractor interest at the rate stated in the Appendix to Tender upon all sums unpaid from the date by which the same should have been paid…”
It is a common practice that contractor’s claim interest in scope of goodwill in case of late payment, however there are other options available if the Contractor would like to take harsh measures.
In accordance with Sub-Clause 69.1, Default of Employer, which stipulates that “In the event of the Employer:
(a) failing to pay to the Contractor the amount due under any certificate of the Engineer within 28 days after the expiry of the time stated in Sub-Clause 60.10, within which payment is to be made, subject to any deduction that the Employer is entitled to make under the Contract, the Contractor shall be entitled to terminate his employment under the Contract
by giving notice to the Employer, with a copy to the Engineer. Such termination shall take effect 14 days after the giving of the notice.” Then the Contractor may terminate the Contract if he feels that the Employer is not able to fund the project anymore. In case of such termination, Sub-Clause 69.3, Payment on Termination stipulates that, “ In the event of such termination the Employer shall be under the same obligations to the Contractor in regard to payment as if the Contract had been terminated under the provisions of Clause 65, but, in addition to the payments specified in Sub-Clause 65.8, the Employer shall pay to the Contractor the amount of any loss or damage to the Contractor arising out of or in connection with or by consequence of such termination.”
Therefore,in case of non payment of any certified amount within 28 days after expiry of the payment time as stated, it is the case of Default of Employer and the Contractor may terminate the Contract. In such case as contractor additional to payment under Sub Clause 65.8, you may claim compensation, loss of profit, etc.
The last option in case of late or non payment in accordance with Sub Clause 69.4, as you have taken in your case, (Contractor’s Entitlement to Suspend Work) is to slow down or suspend the Works which stipulates that”.. the Contractor may, if the Employer fails to pay the Contractor the amount due under any certificate of the Engineer within 28 days after the expiry of the time stated in Sub-Clause 60.10 within which payment is to be made, subject to any deduction that the Employer is entitled to make under the Contract, after giving 28 days prior notice to the Employer, with a copy to the Engineer, suspend work or reduce the rate of work.
If the Contractor suspends work or reduces the rate of work in accordance with the provisions of this Sub-Clause and thereby suffers delay or incurs costs the Engineer shall, after due consultation with the Employer and the Contractor, determine:
(a) any extension of time to which the Contractor is entitled under Clause 44, and
(b) the amount of such costs, which shall be added to the Contract Price, and shall notify the Contractor accordingly, with a copy to the Employer.”
As it can be seen above, you have a case of Extension of Time and additional cost incurred, which you can claim your prolongation costs including idle time of your plant and equipment..
Interim payment certificate Submitted to Employer.
Employer failed to make payment within stipulated time. therefore the contractor stopped the the working due to non payment. in this regard his resources like equipments and manpower became idle.
Refer to Default of Employer clause.
For the period that the project is suspended, contractor may request for any idle equipment cost which may certify with evidences that they were idle for this project. Refer to Default of Employer clause.
In case of non-payment of any due amount under Contract, your initial proceeding may be claim the interest as indicated in Sub-clause 60.10, Time for Payment, which stipulates that “ In the event of the failure of the Employer to make payment within the times stated, the Employer shall pay to the Contractor interest at the rate stated in the Appendix to Tender upon all sums unpaid from the date by which the same should have been paid…”
It is a common practice that contractor’s claim interest in scope of goodwill in case of late payment, however there are other options available if the Contractor would like to take harsh measures.
In accordance with Sub-Clause 69.1, Default of Employer, which stipulates that “In the event of the Employer:
(a) failing to pay to the Contractor the amount due under any certificate of the Engineer within 28 days after the expiry of the time stated in Sub-Clause 60.10, within which payment is to be made, subject to any deduction that the Employer is entitled to make under the Contract, the Contractor shall be entitled to terminate his employment under the Contract
by giving notice to the Employer, with a copy to the Engineer. Such termination shall take effect 14 days after the giving of the notice.” Then the Contractor may terminate the Contract if he feels that the Employer is not able to fund the project anymore. In case of such termination, Sub-Clause 69.3, Payment on Termination stipulates that, “ In the event of such termination the Employer shall be under the same obligations to the Contractor in regard to payment as if the Contract had been terminated under the provisions of Clause 65, but, in addition to the payments specified in Sub-Clause 65.8, the Employer shall pay to the Contractor the amount of any loss or damage to the Contractor arising out of or in connection with or by consequence of such termination.”
Therefore,in case of non payment of any certified amount within 28 days after expiry of the payment time as stated, it is the case of Default of Employer and the Contractor may terminate the Contract. In such case as contractor additional to payment under Sub Clause 65.8, you may claim compensation, loss of profit, etc.
The last option in case of late or non payment in accordance with Sub Clause 69.4, as you have taken in your case, (Contractor’s Entitlement to Suspend Work) is to slow down or suspend the Works which stipulates that”.. the Contractor may, if the Employer fails to pay the Contractor the amount due under any certificate of the Engineer within 28 days after the expiry of the time stated in Sub-Clause 60.10 within which payment is to be made, subject to any deduction that the Employer is entitled to make under the Contract, after giving 28 days prior notice to the Employer, with a copy to the Engineer, suspend work or reduce the rate of work.
If the Contractor suspends work or reduces the rate of work in accordance with the provisions of this Sub-Clause and thereby suffers delay or incurs costs the Engineer shall, after due consultation with the Employer and the Contractor, determine:
(a) any extension of time to which the Contractor is entitled under Clause 44, and
(b) the amount of such costs, which shall be added to the Contract Price, and shall notify the Contractor accordingly, with a copy to the Employer.”
As it can be seen above, you have a case of Extension of Time and additional cost incurred, which you can claim your prolongation costs including idle time of your plant and equipment..
