Claims Under FIDIC Contract

Claims Under FIDIC Contract


Conditions of Contract for Construction, FIDIC Forms. It is known as ‘the Red Book’.

Claims Under FIDIC Contract

Claims Under FIDIC Contract

The FIDIC Conditions are used extensively on international construction projects, notably for major  infrastructure work. The FIDIC Forms are used on projects funded by the World Bank, and the drafts of them were reviewed by it, and by the Asian Development Bank. Claims often arise, and this paper refers to the Clauses under which claims may arise, the responsibilities of each party, and the procedures for dispute adjudication and arbitration.


Under the FIDIC 99 contract, claims can arise when one party fails to fulfill their contractual obligations. There are several rules that govern such claims.

  1. Notice Requirements: The party making the claim must provide a notice to the other party within a specified time period. This notice must be in writing and must provide details of the claim. Failure to provide this notice within the specified time may result in the claim being time-barred.

Formula: Notice must be given in writing within the specified time period.

Example: If Party A fails to pay Party B the agreed amount within the specified time, Party B must provide written notice of the claim to Party A within 28 days of becoming aware of the breach.

  1. Time Limit for Claims: The party making the claim must submit a fully detailed claim to the other party within a specified time period. This time period may vary depending on the nature of the claim.

Formula: Claims must be submitted within a specified time period.

Example: If Party A fails to complete the work on time, Party B must submit a fully detailed claim to Party A within 28 days of becoming aware of the delay.

  1. Engineer’s Determination: If there is a dispute between the parties regarding a claim, the Engineer appointed under the contract will make a determination. The Engineer’s determination is binding unless the parties agree otherwise.

Formula: The Engineer’s determination is binding unless the parties agree otherwise.

Example: If Party A disputes Party B’s claim, the Engineer will make a determination. If Party A does not agree with the determination, they may challenge it through arbitration.

  1. Mitigation of Damages: The party making the claim must take all reasonable steps to mitigate their losses. Failure to do so may result in a reduction in the amount of the claim.

Formula: The party making the claim must take all reasonable steps to mitigate their losses.

Example: If Party A fails to provide the required materials to Party B, Party B must take all reasonable steps to mitigate their losses by sourcing the materials from another supplier at a reasonable cost.

  1. Time-Barred Claims: Claims that are not submitted within the specified time period or are not fully detailed may be time-barred.

Formula: Claims that are not submitted within the specified time period or are not fully detailed may be time-barred.

Example: If Party B fails to submit a fully detailed claim to Party A within the specified time period, the claim may be time-barred.

In conclusion, the rules governing all claims under FIDIC 99 contract are quite technical and must be followed to the letter to ensure successful claim submissions. Failure to adhere to these rules may result in time-barred claims or reduced claim amounts.

Notices of Claims

Under Clause 20.1, the Contractor must give notice of any claim, whether for time or money, not later than 28 days after the Contractor became aware, or should have become aware, of the circumstances giving rise to the claim. If he does not comply with this rule, he will not receive an extension of time, and he will not be entitled to additional payment, and the Employer s discharged from all liability in connection with the claim.

Note that this applies to a claim made ‘otherwise’, as well as claims made under the Conditions. This can include a claim made under the general law, such as for breach of contract, or for negligence.


Clause 20.1 requires the Contractor to follow up his notice within 42 days of the occurrence of the circumstances giving rise to the claim (not within 42 days of giving the notice) with ‘a fully detailed claim which includes full supporting particulars’ of the claim.

The nature of these particulars will be discussed later. For the moment, it is vital to keep in mind these rules.


Contractor’s Basic Entitlement

The basic Clause for the Contractor to claim an extension of time is Clause 8.4. It is there to allow the Contractor to point out where he has been delayed by reasons beyond his control. If he could not do this, and the Engineer did not have the power to give him an extension of time, he would be liable for liquidated damages for delay.

Further, if the Contractor obtains an extension of time, he may be in a position to recover his time-related costs of remaining on site longer. However, there is no natural link between Clause 8.4 and money. It is a time Clause.

Assessment of Delay

The Clause can be activated when the Contractor suffers delay, or will be delayed. The only realistic way of assessing delay is by comparison with the Clause 8.3 programme. If the programme is of sufficient quality, it should form a good basis for assessing delays.

Grounds for Extensions of Time

The possible grounds for an extension of time are:

  • Variations
  • A cause of delay referred to in the Conditions (see below)
  • Exceptionally adverse climatic conditions
  • Unforeseeable shortages of personnel or Goods, caused by epidemics or governments
  • A delay caused by the Employer or a party under his control

A cause of delay referred to in the Conditions

These are found throughout the Conditions. Try to find them! The following is a list:

  • Clause 1.9 – late information
  • Clause 2.1 – denied or late access or possession
  • Clause 4.7 – errors in setting out information
  • Clause 4.12 – adverse physical conditions
  • Clause 4.24 – fossils
  • Clause 7.4 – testing
  • Clause 8.5 – delays caused by authorities
  • Clause 8.9 – Engineer’s instructions to suspend work
  • Clause 10.3 – Employer’s interference with Tests on Completion
  • Clause 16.4 – termination by Contractor
  • Clause 17.4 – Employer’s Risks
  • Clause 19.4 – force majeure
  • Clause 19.6 – optional termination

CLAIMS FOR EXTENSIONS OF TIME refer to a request made by a party involved in a construction project to extend the completion date for a particular task or the overall project. These claims arise when an unforeseen event or circumstance affects the project schedule, making it impossible for the contractor to meet the agreed-upon completion date.

To determine the length of an extension, the critical path of the project is analyzed. The critical path is the sequence of tasks that must be completed on time to ensure the project’s overall completion on the agreed-upon date. Any delay in the critical path will result in a delay in the overall project completion date.

The formula for calculating the length of an extension is as follows:

Extension of time = (Delay ÷ PERT) x Impact


  • Delay: The number of days of delay experienced in the project.
  • PERT: Program Evaluation Review Technique or the average time it takes to complete a task based on the most optimistic, most likely, and most pessimistic scenarios.
  • Impact: The effect of the delay on the critical path of the project, expressed as a percentage.

Here’s an example of how to use the formula:

Suppose a construction project has a critical path of 60 days. One of the tasks on the critical path has been delayed by 10 days due to unforeseen circumstances. The PERT for this task is 5 days, and the delay has impacted the critical path by 50%. To calculate the length of the extension, we use the formula:

Extension of time = (10 ÷ 5) x 50% = 100%

Therefore, the length of the extension is 60 days (the length of the critical path) multiplied by 100%, which equals 60 days. So the new completion date for the project would be 60 days plus the extension of 60 days, or a total of 120 days.

Another formula for calculating the length of an extension is the Time Impact Analysis (TIA) method. This method calculates the impact of a delay by analyzing the schedule before and after the delay and determining the difference in completion dates. The TIA method can be more accurate than the first formula but is more time-consuming to calculate.

In conclusion, claims for extensions of time are a common occurrence in construction projects, and their calculation involves analyzing the critical path, determining the length of the delay, and calculating the impact on the project’s overall completion date using one of the available formulas.

Contractor’s Basic Entitlement

The Contractor’s basic entitlement is summarised in Clause 12.1, which says that the

Works shall be measured and valued. The onus is on the Engineer to do this.


Clause 13.3 sets out the procedure for variations. It is easy enough to follow. The valuation rules are contained in Clause 12.3. The onus is on the Engineer to measure and value variations, but, in reality, the Contractor may well wish to claim more than.

the Engineer’s valuation.

Full Supporting Particulars: Basic Requirements

The Contractor is to provide full supporting details of his application within 42 days of the occurrence of the delaying event. In practice, it will be difficult for the Contractor to produce full supporting particulars within 42 days, especially if the project has been underway for some time, and is complex. This makes continuous

keeping of good records, and the rapid compilation of the claim, imperative. In reality, the quality of details varies considerably. Some claims are simply not detailed, and some are not even particularised. That type of claim does not deserve success. The basic requirement is for the claim to be particularised. If there are several different causes of delay, a period of delay should be attributed to each cause. That is the basic requirement of linking cause and effect. If there is concurrent delay, then the Contractor needs to say so. He then needs to decide which delay, if any, caused more overall delay.

The Engineer’s Obligations

By Clause 20.1, the Engineer is directed to respond with approval, or with disapproval and detailed comments, and in any event, respond on the principles of the claim. In making a determination of an extension, he must proceed in accordance with Clause 3.5. That requires him to consult with the Contractor, to try to reach agreement. If it is not possible to reach agreement, he must make a fair determination of the extension of time.

The Engineer is the first-step adjudicator or arbitrator. However, he is an informed adjudicator or arbitrator, unlike the tribunals who come on to the scene later on. The Engineer is not there to reject claims, but to deal with them fairly. That does not mean he has to allow unmeritorious claims. What it means is that, if the Contractor makes valid points, the Engineer should look into them, and arrive at a reasoned conclusion.

Given that he is an informed adjudicator or arbitrator, the Engineer will have knowledge of the facts. This means he should not put the Contractor to proof of absolutely everything, in the way that a tribunal might expect.

Note also that, under Clause 8.4, the Engineer may make a number of determinations.

When doing so, he must review, and may revise, previous determinations. However, he may not decrease them.



Contractor’s Basic Entitlement vs The Engineer’s Obligations under fidic 99

Contractor’s Basic Entitlement refers to the rights and benefits that a contractor is entitled to under the FIDIC 99 (Fédération Internationale Des Ingénieurs-Conseils) Red Book Contract, which is a standard form of contract used in international construction projects. The Engineer’s Obligations refer to the responsibilities that the Engineer, who is appointed by the Employer, must fulfill in the course of the project.

The Contractor’s Basic Entitlement includes the right to receive payment for work done, the right to an extension of time in case of delays caused by the Employer or circumstances beyond the contractor’s control, and the right to claim for additional costs incurred due to unforeseeable events such as variations or changes in the scope of work.

The Engineer’s Obligations, on the other hand, include the responsibility to ensure that the works are carried out in accordance with the contract documents, to issue instructions and approvals, to inspect and test the works, and to issue certificates of payment. The Engineer must also notify the Contractor of any defects or non-compliance with the contract documents and instruct the Contractor to rectify them.

In the FIDIC 99 Red Book, the Contractor’s Basic Entitlement is linked to the Engineer’s Obligations. For example, if the Engineer fails to issue an instruction or approval in a timely manner, the Contractor may be entitled to an extension of time and/or additional payment. The Contractor must submit a notice of claim to the Engineer within a specified timeframe in order to preserve their entitlement.

Formula for calculating extension of time:

Extension of Time = Relevant Event Time Impact x Excusable Delay

where Relevant Event Time Impact is the amount of time the event has impacted on the project’s critical path and Excusable Delay is the delay caused by an event that is beyond the Contractor’s control and is not due to their own fault or negligence.


Let’s say a construction project has a total duration of 12 months, and the Contractor experiences a delay of 1 month due to a variation instructed by the Engineer. The variation is considered an event that entitles the Contractor to an extension of time. The critical path of the project is 9 months, and the variation has delayed the critical path by 2 weeks. Therefore, the Relevant Event Time Impact is 0.5 months (2 weeks/4 weeks per month). The delay caused by the variation is considered Excusable Delay as it was beyond the Contractor’s control and not due to their own fault or negligence. Therefore, the Contractor is entitled to an extension of time of 0.5 months (Relevant Event Time Impact) x 1 month (Excusable Delay) = 0.5 months.

Table example for payment certificates:

Description Quantity/Rate Amount
Labour 100 hours $1,000
Materials 100 units $500
Plant and Tools 50 hours $750
Total   $2,250

In the payment certificate example above, the Engineer is responsible for certifying the amount due to the Contractor for work done. The certificate must be issued within a specified timeframe and must be based on the actual work completed and materials supplied. The Contractor can dispute the amount certified by the Engineer if they believe it is incorrect.


Permanent link to this article: