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News & Press: 2018 News Items

Alusani® Course Leader discusses how new time barring rules impact dispute resolution

30 March 2018  
Posted by: Bert vd Heever
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While many people in the built environment have a working knowledge of the legal and contractual information to FIDIC, the new changes to the Red and Yellow books makes it crucial for people to invest time in understanding the fine-print contractual details. Cameron Staude, Alusani® Course Leader, says that the updated version – which was released in December 2017 - contain heavily revised claims and dispute resolution provisions that can help contractors avoid expensive legal disputes when understood correctly.

“The new claims and disputes process is arguably the biggest change to the FIDIC suite of contracts. There is now an increased number of deeming provisions as well as time-bar clauses. Contractors who are engaged in any type of public or private construction projects will need to empower themselves with a solid understanding of the new provisions and clauses,” says Staude.

Clause 20 of the 1999 edition has now been split into two clauses, namely clause 20 (which deals with the notification of claims and their determination) and clause 21 (which deals with dispute avoidance, adjudication boards and arbitration proceedings).

“Both the Employer and Contractor are now required to notify claims for additional payment or extensions of time to the Engineer as soon as practicable and no later than 28 days after the claiming Party becomes aware, or should have become aware, of the event or circumstance giving rise to the claim. A failure to notify within this period renders the claim liable to be barred and the receiving party could become discharged from any liability,” explains Staude.

In the past, an Employer’s claims weren’t subject to any time barring provisions, so the updated clause is a

noticeable change that Employers need to take heed of. If the Engineer believes the notified claim is late – and hence time barred – then he must serve a notice advising the parties within 14 days of receiving the notice. If the Engineer fails to issue this notice, then the claim notice is deemed valid.

“The parties then have 84 days in which to submit a fully detailed claim from the date when the party became aware of or should have become aware of the event or circumstance giving rise to the claim. In the 1999 edition, the Contractor had 42 days in which to submit a fully detailed claim, so this period has now been doubled,” says Staude.

While the parties have been granted an additional period of time, this is now coupled with a time barring provision in that failure to submit a fully detailed claim within the time period will result in the claim being possibly time barred. These time-based requirements and dispute processes are only some of the latest changes to the new suite of contracts.

Staude will be presenting a CPD-accredited course on FIDIC on 25 & 26 June as well as FIDIC Claims on 27 June at Melrose Place Guest Lodge in Johannesburg to discuss the contents of the contracts in detail. For more information, visit http://www.alusani.co.za/.