Contract Package 05 - Rehabilitation and Improvements to Galle-Deniyaya Road (A17)

Dispute No. 04 Claim for Additional Cost due to Delay (Prolongation Cost)

The Claim: The Contractor-Claimant (hereinafter referred to as CC) has made a claim for Additional Cost due to Delay (Prolongation Cost) (hereinafter called the (Current Claim) estimated at Rs.108, 773,031.38. Preliminary Objection: The Employer- Respondent (ER) submits that the current Claim preferred by the CC cannot be contractually sustained as he has failed to provide notice of intention to claim pursuant to SC 20.1 of the General Conditions of Contract, which is a condition precedent. Thus the ER submits that the Hon. Members of the DAB to and dismiss the claim inlimne without further hearing on the basis that the CC has failed to satisfy requirement to provide notice of his intention to claim “as soon as practicable, and not later than 28 days after the Contractor became aware, or should have become aware, of the event or circumstance” inherently invoking consequential disability to sustain the claim pursuant to paragraph 02 of the said sub Clause 20.1 The ER submits the following issues for the deliberation of the Members of the DAB in support of the preliminary objection raised above The CC claims that he filed the Current Claim with the Engineer on 12th January .2010. and avers that he has given due notice as required by Sub-Clause 20.1 by his letters dated: • • • A B C

The ER submits that the CC has based his previous claims Nos. 01 and 02 for Extension of Time on the basis of notices shown above and those have already been determined and

.” Thus. Therefore. or within such other period as may be proposed by the Contractor and approved by the Engineer.0 These are the critical delays determining extension of time all of which are compensable delays. The next question before the DAB is weather the CC has ever submitted a contractually sustainable claim for prolongation cost? The CC claims that he has given notice of his intention to claim on 6th June 2007 for additional time and cost was submitted to the Engineer duly within 28days from the event of variation on design parameters. “8. Both parties have agreed with the determination.1 paragraph 05. 01 and 02. Now the issue before the DAB is to examine why cost had not been awarded with the Extension of Time granted on those two claims. the Contractor shall send to the Engineer a fully detailed claim which includes full supporting particulars of the basis of the claim and of the extension of time and/or . In proof thereof the ER relies on the following averment in the CC’s current claim. in current claim. 01 and 02. DAB members to deliberate is whether the CC ever substantiated this claim? In terms of said Sub-Clause 20. Members of the DAB to determine whether the CC is claiming “Prolongation Cost” on the same and identical circumstances and events which lead him to claim. and entitled him for Extension for Time for Completion under the aforesaid Claims Nos. The pertinent question for the Hon. which requires the claimant to satisfy the following requirements: “Within 42 days after the Contractor became aware (or should have become aware) of the event or circumstance giving rise to the claim. 01 & 02. there is no doubt that the contractor is basing his current claim on the events and circumstances which lead to his entitlement for an extension of time on claim Nos. 01 and 02. in addition to the entitlement of time the contractor is entitled to additional cost due to these delays.settled. has clearly and firmly stated and admitted that the his claim for prolongation cost is based on the circumstances and the events on which he was granted Extension of Time for Completion under the said EOT Claims Nos. The ER wishes to submit that the main and the only reason for not awarding cost is that the contractor has not made an express or implied claim for cost in both Claims Nos. The ER with a view to assisting the Hon. The ER submits that the CC. Thus those two claims have been contractually closed.

1. Such delay cannot be considered acceptable under any circumstance. the CC has failed to exercise the contractual right within the claim framework specified in SC 20. giving the accumulated delay and/or amount claimed. (Failed) (b) the Contractor shall send further interim claims at monthly intervals. but has failed all other requirements required in subsequent paragraphs of the same Sub-Clause.4 The alleged notice of intention claim dated 6th June 2007 had been part and parcel of his Claims (No 01and 02) for Extension of Time for Completion and filed marked “C 41” But the claims did not incorporate any cost consideration. 8. For Example. This is part and parcel of the same claim. If the event or circumstance giving rise to the claim has a continuing effect: (Failed) (a) this fully detailed claim shall be considered as interim. Sub-Clause No.4 is a principle clause for claiming overtime. But this is considered a time clause without necessarily having cost implications. he has claimed only extension of time and no costs. it would be seen that the CC has not only failed to give notice under 20. He has not indicated under which Clause that the respective cost is claimed. he has forfeited his right to claim any additional benefits under the same claims and the notice of intention to claim. The contractor’s entitlement for cost is fundamentally on the extension of time. and (Failed) (c) the Contractor shall send a final claim within 28 days after the end of the effects resulting from the event or circumstance. even the Engineer is extremely generous and sympathetic. having not claimed cost in the already determined claims.1. No dispute as per Sub-Clause 20. or within such other period as may be proposed he Contractor and approved by the Engineer” (Failed) Claim submitted after 03 years 06 months and 15 days after the purported notice His purported current claim has been filed with the Engineer only on 02 November 2010. . Instead he submits a sketchy note without giving any breakdown of cost or cost implications after a lapse of 03 years 06 months and 15 days. A detailed Claim has not bee provided within 42 days.additional payment claimed. This is a fatal error. and such further particulars as the Engineer may reasonably require. Thus. The Contractor should have claimed his entitlement for cost along with that for time. He has accepted the determination by the Engineer on both Claims. However. He has not submitted a final claim within28 days of after the end of the effects resulting from the event or circumstance. In both cases. H is purported notice of Intention to claim is for time and cost. Therefore.

irrespective of the acceptability of such caveat. 01 and 02 for further claims. In other words. steadily relies on the principal that since the CC being bound by the said determination of the Engineer on Claims Nos. then a course of action may have accrued to him to refer the matter to the DAB. The doctrine of Estoppel operates against the said notices rendering the current claim defective on the basis of not providing notice under Sub-Clause 20.1. (b) In view of submission (a) above. He has not al at least made a caveat in his two claims to the effect that the cost claim or cost implications will be submitted later and thereby establishing the logical link between the notices and the current claim. 01 & 02. Dismissal Inlimne The DAB has power to dismiss a claim in limine if there is a fundamental defect in the claim arising out of non-compliance with a mandatory requirement. The claims is subject to Estoppel The CC claims that he did submit his current claim by letter dated 12th January 2010.As corollary ton the above.1 of the General Conditions Contract. The ER. is precluded from reagitating the question of cost which should have been part and parcel of the respective EOT claims. had he claimed cost under the same claims and had not been given. 01 and 02 have rendered themselves contractually ineffective and void by being subject to estoppel as explained above. Therefore. Thus all notices given prior to Claims Nos 01 and 02 are subject to contractual estoppel. Thus in the absence of such warning to the Engineer and the Employer he cannot rely on the notice to sustain his claim. (b) Declare the Contractor-Claimant is restrained from using the notices given as part and parcel of Claims Nos. He claims that he has given notice on 16th May 2007 on which he has claimed his Extension of time. . the current claim has rendered itself contractually non-sustainable for want of notice required under Sub-Clause 20. The CC cannot bring another claim for Cost as he has already exhausted remedy available to him under the Notices of Intention to claim given on 16th May 2007. He is aggrieved that the Engineer has rejected his claim on the grounds that he has failed to give notice under Sub-Clause 20. As explained above these claims were determined and the notice also lapsed therewith. the ER submits that no dispute has been crystallized for the CC to seek remedy at the DAB. The Current claim is unequivocally defective: (a) The notices given prior to determination of the claims Nos. The Employer –Respondent pleads: (a) That the current Claim submitted by the Contractor –Claimant be dismissed inlilmne on the above averments.1 of the conditions of contract by virtue of activation of paragraph 02 of the said Sub-Clause.

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