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Forensic Claims Analysis

Pending Payments:

In the Open Standard
Mai TawfeqMember for 16 years 7 months
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Hi Dears;

I need the kind opinions in the following case:

the project is (marina with resort) seven main contracts, one contractor has been given three contracts :

1. hotel .
2. 5 residential blocks (g+5) .
3. Infrastructure.

The owner stopped realizing the due monthly payments today the contractor is entitled to 24 millions .
The site is suffering delay and to be honest the delay caused by both party (owner with consultant) and (contractor).
And both parties are suffering problem in a cash flow.

My question is ;

What the recommended solution can be advised to the owner (the owner big VIP, without forgotten the contractor entitlement since he did the best level to meet the project directions, even with no money has been released since 4 months.

I forget to mentioned that the contract form is FIDIC 1987 fourth edition ,and clause 69.3 give right to the contractor to slow the site progress.

thanks.

mai
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4 replies

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  1. 0
    Gary Whitehead ·
    #1
    I would advise the owner to suspend the works until a secure source of funding is found.

    I would advise the contractor to do the same, and start looking at legal avenues to get the 24 million currently owed to them.

    I’m not an expert on FIDIC, but I believe there is an apropriate suspension clause.

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  2. 0
    Samer Zawaydeh ·
    #2
    Dear Mai,

    The first thing is to read the CoC and make sure that you know the clauses related to payments.

    In case of considerable delays, FIDIC indicates that the Contractor has the option to reduce the amount of activities at site, in case that the Contractor will not be paid for the future works as well. It doesn’t make sense to continue working.

    You must submit the noticication in a timely manner as per the recommendations of FIDIC. Otherwise, the Contractor will not be entitled under the CoC for some rights, and will have to revert to alternative methods like DAB and the LAW.

    With kind regards,

    Samer
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  3. 0
    Mai Tawfeq ·
    #3
    sorry Samer ,what did u mean by DAB.

    Thanks
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  4. 0
    Samer Zawaydeh ·
    #4
    Dear Mai,

    DAB = Dispute Adjudication Board

    You have several options within the CoC to solve disputes:

    1. Engineer’s Decision
    2. DAB
    3. Amicable Settlement
    4. Arbitration

    I would recommend that you read the FIDIC clause and apply it clearly while referring to the clause when you address the opposite party.

    With kind regards,

    Samer
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