Contractual claim is simply an amount to which one party of a contract is entitled.
It is a demand for supposed due. Hence a Construction Contract Claim is a written demand or assertion (statement) by one of the parties to the contract seeking as a matter of right, interpretation of contract terms, payment of money, extension of time or other relief with respect to the terms of the contract
In the construction industry claims are a fact of life. Contractors and Employers must be familiar with issues relating to Claims and Claims Resolution Procedure.
If contractor considers he is entitle for
1. time extension
2. and/or additional payment
Under any clause or in connection with the contract
Shall give notice to the Engineer describing the event
As soon as possible and not later than 28 days after he becomes aware.
Contractor shall also submit
Any other notices required by the contract
Supporting particulars for the claim
The records relevant to the claim must be kept at site or another approved location approved by Engineer
Engineer on receipt of the notice- without admitting the employer’s liability
Monitor the record keeping
And or instruct the contractor to keep further up-to date records
Contractor shall permit the Engineer to inspect the records/ submit copies
Contractor,
Within 84 days after he became aware (or within a mutually agreed period)
Shall send the Engineer a fully detailed claim on time extension or payment claimed
If the event is continuing ;
The fully detailed claim to be considered interim
May send further interim claims on monthly basis- accumulated- with further particulars
Final claim within 28 days (or mutually agreed period) after end of the event
Engineer within 42 days (or mutually agreed period) after receiving a claim;
Shall respond with approval or disapproval
And detailed comments
May request further particulars
But yet give his response
If the claim involves a payment, it has to be included to Payment Certificate (monthly)
Reasonably substantiated
Entitle only to the substantiated part only
Engineer shall make a ‘determination’ as per Sub-clause 3.4;
Engineer shall proceed to agree or determine any matter
Engineer shall consult each party to reach agreement
If agreement is not reached Engineer shall make a fair determination
Engineer shall give notice to both parties of agreement or determination
Each party to give effect to the Engineer’s decision unless changed under clause 19.0
Sub-Clause 8.4- Causes for time extension:
A Variation (change to the Works) or other substantial change in the quantity
A cause of delay giving an entitlement under any of these Sub-clauses
Exceptionally adverse climatic conditions
Unforeseeable material or labour shortage
Any delay due to Employer, his personnel, other contractors at site
If the Contractor believes the decision taken by Employer/Engineer wrongly taken/ultra Vs the contract
Shall be referred to the adjudicator for mediation within 28 days of the above decision
As a precedence to Arbitration
Appointment of Adjudicator:
If the both parties have not agreed on appointment of Adjudicator before signing the agreement, appointment by designated authority
The Adjudicator shall give the outcome (written) of the mediation within 28 days
The cost of the Adjudicator shall be divided equally between both parties irrespective of the decision
Either party may refer to Arbitration within 28 days
If neither party refers to arbitration, Adjudicator’s decision is final
Adjudicator not bound to appear before arbitral tribunal or court of justice
A new Adjudicator shall be jointly appointed if;
Adjudicator resigns or die
If he is not functioning satisfactorily (as felt by both parties)
The new appointment shall be made within 28 days of removal of the former
If both parties fail to agree, either party can request appointing authority to designate
Appointing authority shall act within 21 days
Arbitration shall be conducted as per Arbitration Act No.11 of 1955
Either party can decide to go for Arbitration
Desiring party shall nominate three arbitrators out of which one to be nominated by the other party within 21 days
If the other party fails the first party can nominate and inform the other
Matters to be settled by arbitration;
Any doubt, difference, dispute, controversy or claim
Arising out or touching or concerning
Execution or maintenance of works
Or on the interpretation of
Rights, duties, obligations, or liabilities
On the operation, breach, termination, abandonment, foreclosure (gain possession)
Claim Prevention
Claim Mitigation
Claim Identification and Claim Quantification
Claim Resolution
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