FIDI consultation

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1.  INTRODUCTION

1.1  We have been instructed by Client  Corporation  to consider and advise on the formulation of the EOT Claims that have been made in relation to the current delays to the (the "Project"). We have therefore taken this to require a review of the  formulation of the claims as set out in the document entitled " Section  Contractor's  Claim"  submitted  to  the  Engineer  on  1  (the "Claims Document")

2   and to advise on the steps that can be taken  to  make  the  claims  more  robust  and  therefore  more  persuasive  with  the  aim  of  encouraging  the  Engineer/Employer  to  take  a  more  realistic  and  sensible  approach  in

relation to Client's EOT claims. 

1.2  The report has been prepared having regard to the contents of the documentation kindly  provided  by  Client  and  which  comprises,  in  the  main,  (1)  the  General  Conditions  of  Contract  (as  amended  by  the  Particular  Conditions) and  (2)  the  Contractor's  Claims dated

1.3  In an effort to assist in the reading and understanding of this report we have subdivided  the Section so as to follow the framework of the Claims Document. In relation to each  claim  we  have  commented  on  the  existing  formulation  of  the  EOT  claims  and  have  recommended measures to increase the strength of claims.

1.4  Our instructions are presently limited to a  high level review of the formulation of the EOT  claims and in particular, we have not been asked to advise specifically on the merits of the  claims  as  currently  presented  (which  would  of  course  require  a  much  more  detailed  analysis of the basis upon which the claims are made and the supporting factual evidence).  Therefore, we have not considered the factual detail of the claims made to date. We have,  however,  where  appropriate,  indicated  particular  areas  of  strength/weakness  where  further investigation or material may be useful.

2.  EXECUTIVE SUMMARY

2.1  It is evident that many of the claims set out in the Claims Document have been reviewed  by the Engineer (and commented upon by the Employer) on a number of occasions.

2.2  It would appear that in respect of at least some of the claims, the Engineer has rejected  the Contractor's position. It would also seem that the Employer is unwilling to adopt a realistic and constructive approach to resolving the current disputes.

2.3  As a general comment, in order to resolve this deadlock the key issue both in relation to Claim 1 (and to an extent) for Claim 2 is to establish that the decision to relocate the rotor structure constitutes either a Variation or gives rise to an entitlement to time/money under some other provision of the Contract. We would therefore strongly recommend that the case  showing  how  the  decision  to  relocate  and  the  consequences  thereof  can  be attributed to the Employer/Engineer should be made as strong as possible.

2.4  Consideration will no doubt have been given to escalating the "open" issues by giving a written notice of dispute under Clause 22. Even if it is decided that this step is not yet   Document undated but assumed to be the "wrap up" notice of claim referenced in advice of  We have not seen the various letters and other documents supplied by Client to the Engineer setting out the original notification of its claims. Nevertheless, for the purposes of any revised composite Claims Document, we believe the inclusion of the information we have identified in this report is vital for the purposes of ensuring that such claims are presented as persuasively as possible.

3  In this report, references to contractual clauses  will be to clauses in the General Conditions as amended by the Particular Conditions ie Sub-Clause as amended by appropriate, modeling the presentation of the claims so as to match the requirements of the dispute provisions in the Contract will add weight to the claims, and will send a signal to  the  Employer  and  Engineer  of  Client's  dissatisfaction  with  the  status  quo  and preparedness to advance claims along the formal route. 

2.5  We have therefore set out our comments on the Claims Document so as to allow the re-modeling of the claims in the most compelling and persuasive way possible following the  requirements  of  the  contract  in  relation  to  the  information  required  particularly  in relation to establishing the relevant ingredients for each head of claim. However, as noted above, the key to successfully persuading the Engineer/Employer to adopt a more realistic and  constructive  attitude  towards  the  claims  is  to  demonstrate  that  the  Employer  is responsible for the time/cost implications of the decision to relocate the rotor structure and in the first instance we would suggest that the focus of any revisions to the claims should be on this.

3.  DISCUSSION

General

3.1  In the Claims Document, the Site 1 claim ("Claim 1") and the Site 2 Structure claim ("Claim 2") are presented as "Variation" claims. These are the two main heads of claim. Therefore the legal and contractual basis upon which they are advanced is key to success in terms of persuading the Engineer/Employer as to the merits of Client's claims. We would strongly recommend that the Claims Document specifically identifies the  relevant  contractual  provisions  forming  the  basis  of  the  claim.  In  this  regard,  the relevant part of Sub-Clause for Variations) and such other clauses,

including the other subparagraphs of Sub-, may be relevant. 

3.2  If  the claims are indeed "Variation" claims (and in our view, we believe that a number of the current claims can be put in the alternative i.e. they may be Variations but they may  also  give  rise  to  the  right  to  an  EOT  other  than  because  they  are  or  may  be Variations) then they must be more closely linked in to Clause of the Contract which deals with the right to an EOT (and costs) in relation to Variations and adjustments. 

3.3  For  example,  as  a starting  point  a  summary  of  the  contractual  basis  of  each  claim should  be  provided  by  way  of  an  introduction.  This  would  be  followed  by  a  more detailed  chronology  with  detailed  cross-referencing  to  relevant  documents  showing how the various ingredients required to allow a claim are present. This would include a short executive summary of the relevant provisions of the contract giving rise to the entitlement  followed  by  relevant  details  showing  how  the  entitlement  arises.  This would  include  in  relation  to  Claim  1:  (1)  details  of  the  relevant  part  of  the  original Employer's Requirements in relation to the location of the structure; (2) the Contractor's response (i.e. showing the location within the Site 3 foot print) (3) the acceptance of the Contractor's proposal; and (4) the subsequent instruction varying the position of the structure. See also specific comments below.

  Claim 1 – Site 1

  Relocation of Site 1 Outside of the Site 4 Footprint 

3.4  Some reference is already made in the Claims Document to points (a) to (d) outlined above,  but  at  present  it  is  not  entirely  clear  why  it  is  suggested  that  Claim  1  is  a "Variation" in the sense required by Sub-Clause We therefore suggest that the formulation  of  this  part  of    the  claim  make  clear  whether  this  is  a  Variation  under

Sub-Clauses    or  an  Engineer's  Instructed Variation under Sub-Clause should also be made to the document(s) in which the instruction was contained.

3.5  We would also suggest that claims be included (if appropriate) under Sub-Clause and Sub-Clause We suggest this because it would appear that part of the reason for the change in location was the manner in which the seismic data was interpreted and the potential applicability of relevant building regulations.    

Delayed Access at New Location (Investigations)

3.6  The contractual basis of the claim should be set out in detail as there appears to be a number of different potential bases for this claim to be identified. These bases include a lack of access to the Site () and delays due to Employers acts, i.e. re-occupation (Sub-

3.7  It may also be that there is some duplication with the Claim outlined in paragraph 3.1.1, as this claim is said to arise from the same Variation and, therefore, care should be taken to separate out its various elements.

Diversion of Utilities

3.8  Again this claim is said to incorporate elements of the preceding claim in relation to delayed access. As such, care should be taken to try to separate its various elements and to identify the specific contractual basis (or alternative basis) of each element of the claims. In relation to this, we comment as follows in relation to each part of this claim:

•   Incorrect location of sewer from building

3.9  It appears that the main issue here is errors on the Employer's indicative drawings. Consideration is therefore needed as to the potential relevance of Sub-, which deals with errors in the Employers documents.

•   Delay by Employer in construction of Branch No.  

3.10  There is quite a detailed factual background to this claim. There is also reference to the Employer using Client's subcontractors. There are various provisions of the Contract that give rise to EOT/cost entitlements, which may be relevant here. We suggest that further consideration be given to these further provisions, e.g. Sub- (EOT for delay due to Employer or its personnel). 

  •

Delays to works due to

3.11  We  would  suggest  that  specific  reference  be  made  here  to  delay/cost  entitlement under Sub- which refers to antiquities.

  •

Diversion of crossing the Site 1

3.12  This claim is said to be based on the Variation relating to the rotor structure re-positioning. Consideration  should  be  given  to  putting  this  claim  in  the  alternative  or  at  least establishing  a  much  clearer  relationship  between  the  Variation  and/or  what  are described in the claim as the "Employer's responsibility" and the matters complained of. It would also be helpful to provide an explanation as to why the Engineer is wrong in suggesting that the matters contained in the diversion of utilities claim do not form part of the Contractor's scope of works.

  •

Utilities at new Site 1 Location.

3.13  The same comments as set out in relation to above apply. These two claims seem to be very similar and should be combined.

  Additional Works for Relocated Site 1

3.14  This claim is self explanatory. It is difficult to see how the Engineer can deny the claim  assuming he accepts the relocation of the structure is a Variation.

  Supporting Utility

3.15  We repeat the comments set out above in relation to the additional piles. Moreover, can we respond to the Engineer's suggestion that Contractor should have undertaken its own investigations prior to design stage? It is not clear whether the Contractor was   able to undertake these investigations or even needed to if the original location of the structure  had  been  agreed.  What  would  have  been  the  purpose  of  such  prior investigation – if there is no purpose we ought to say that it would simply have been a waste of time and costs.

  Claim 2 – Site 2 Structure

3.16  The  introduction to  Claim  2  in  the  Claims  Document  suggests  that  there  is  a relationship between the decision to relocate the structure (i.e. Claim 1) and this claim. We note that there is a brief reference to this in the conclusion section  to the first claim and the  entirety  of  the  second  claim  is  concerned  with  it  but  can  the  details  of  the connection be made more explicit? It may simply be that the claim described as the relocation of structure outside the Site 4 footprint below should be put first in the section with a more detailed explanation of how it is linked to Claim 1.

  Delayed Access to Works

3.17  Please see general comments in relation to Claim 1 as outlined above. The key issue here  once  again  is  to  establish  contractual  entitlement.  Claim  2  is  described  as  a Variation  claim  and  therefore  the  details  of  the  various  contractual  and  factual ingredients  as  to  how  Client  say  that  this  was  a  Variation  and  how  it  gives  rise  to entitlement should be set out at the beginning. At the moment the contractual basis of the claim for a Variation is unclear.

3.18  In  addition  to  the  claim  that  this  is  a  Variation,  consideration  should  be  given  to alternative claims based on failure to give site access (Sub-Clause ).

  Relocation of Structure Outside of the Site 4 Footprint

3.19  See above general comments in relation to the delayed access claim set out above. As previously explained, we suggest that a more detailed explanation be given as to why this is a Variation including details of how the decision regarding retaining rather than demolishing the structure can be linked to an instruction from the Engineer.

  Poor Condition of Existing Site 4

3.20  This is potentially a key claim given its potential time/money impact and is inextricably linked with the "partial demolition" claim below (which is therefore also dealt with here).  Also the narrative description of this claim in the Claims Document suggests that the issue between the parties is as much to do with how and when a decision was required as  to  dealing  with  the  problem  of  the  columns  (and  in  particular  how  the  partial demolition option came to be adopted) as the costs/delays of the works associated with resolving the problem. 

3.21  Whilst the narrative description setting out the correspondence between the parties and the position adopted by the Employer/Engineer at various points in the last years is helpful, the claim should commence with a detailed explanation as to why contractually  the  poor  state  of  the  columns  is  the  Employers  responsibility  –  for example much more should be made to the failure to provide site access etc. and the

Engineers/Employers obligations relevant to this issue under the Contract. 

3.22  Also this element of the claim appears to give rise to other claims. For example, given the  references to seismic codes consideration should be given to the applicability of Sub-Clause. Also was any pre-contract data in relation to the supplied by the Employer? 

  Engineer / Employer decision on Partial

4.  NEXT STEPS

4.1  We would suggest that serious consideration be given to revising the claims so that each claim  or  element  of  the  claim  commences  with  a  detailed  description  of  the  relevant contractual provisions and how Client's entitlement to an EOT (and if appropriate money) arises.

4.2  Sub-Clause  sets  out  a  detailed  regime  for  the  Contractor  to  bring  claims  for time/money and in particular requires amongst other things that the Contractor presents a "fully detailed claim" as that is defined in the amendment to this clause by the Particular Conditions.  Sub-paragraph require a description of the contractual and legal basis of the claims, and the consequences of the events relied  upon. We would suggest that an expansion of the details of the claims in relation to these particular matters will be of considerable value in increasing the strength of the claims and persuading the Engineer/Employer of their merits.

4.3  Even if the Engineer/Employer remain un-persuaded, the revisions will also make easier the task of  assessing the strength/weakness of the claims and modifying them into a format whereby the dispute can be escalated to the next stage of dispute resolution under the  Contract  namely  a  notice  under  Sub- to  the  Engineer  requiring  his determination, and thereafter (if appropriate) arbitration.  

4.4  The arbitration  provision (see  provides for arbitration under the ICC rules. The Sub-Clause also provides for the appointment of a sole arbitrator to hear the claims and that the arbitration shall be conducted in.  Accordingly,  if  the  matter  proceeds  to  arbitration,  an independent individual (who will almost certainly not be) will review the claims and can (under the Contract) review and open up the Engineer's decisions. It is therefore well worth ensuring that the claims are as strongly presented during the course of the project as is possible.