28-8-20 DISPUTE-2 REJOINDER-draft

Request №: 2 for DAB’s Decision
Construction of Pakistan Kidney & Liver Institute and Research Center (Trust) Hospital Building-Rejoinder to ’The Response’ of the
Respondent (The Client)
PACKAGE A-2:
CONSTRUCTION OF PAKISTAN KIDNEY& LIVER

INSTITUTE AND REREACH CENTER (TRUST)
HOSPITAL BUILDING (PKLI&RC), LAHORE
Before the Dispute Adjudication Board
REJOINDER TO THE RESPONSE BY THE RESPONDENT

FOR OBTAINING THE DAB'S DECISION IN PURSUANCE OF
SUB-CLAUSE 20.4 OF GCC
ON ACCOUNT OF
Unjustified Deductions made by the Respondent Unilaterally from the

Certified Amounts while making Payment under Sub-Clause 14.7 of GCC &
PCC
[DISPUTE-2]
Between
Uni Build Associates (Pvt) Ltd.

(The Contractor) ------------------------- Claimant
and
Infrastructure Development Authority of Punjab (IDAP)

(The Employer) ------------------------Respondent
28th August, 2020
Page 1 of 32
TABLE OF CONTENTS
1. Introduction
2. Brief History/Record
3. Statement of the
Dispute...................................................................................................8
4. Contractual Elucidation and the The Contractor’s Position Statment
5. Detail of Withheld Amount and Calculation of Interest Accrued
6.DAB for Decision....................................................................................................................
7. Relevant Contract
Provisions…………………………………………………………..21
Exhibit-01
UBA/PKLI/A2/18/73 Dated: 17th October, 2018
Exhibit-02
UBA/PKLI/A2/18/84 Dated: 2nd February, 2019
Exhibit-03
UBA/PKLI/A2/18/86 Dated: 9th February, 2019
Exhibit-04
UBA/PKLI/A2/19/92 Dated: 01st April, 2019
Exhibit-05
UBA/PKLI/A2/19/97 Dated: 29th May, 2019
Exhibit-06
UBA/PKLI/A2/19/106 Dated: 03rd October, 2019
Exhibit-07
Exhibit-08
UBA/Admin/PKLI/A2/20/126 Dated: 02nd March, 2020
Exhibit-09
UBA/PKLI/A2/20/130 Dated: 18th April, 2020
Exhibit-10
Calculations of Contractor’s Claim
Exhibit-11
Page 2 of 32
Relevant Contarct Provisions...................................................................
1. INTRODUCTION
Particulars of the Contract and Background of the case is being reproduced here to
facilitate the DAB for ready reference for review of the Rejoinder (Rebuttal) to the Position
Statement (The Response) by the Respondent.
Particulars of the Contract
The key features/ facts relevant to the Contract are enlisted below for better
understanding of the background / context to the Dispute:
Name of Contract: Construction of Pakistan Kidney & Liver Institute and
Research Centre (TRUST) Hospital Building (Package – A2)
Employer: CEO, Infrastructure Development Authority of Punjab

(IDAP), Government of the Punjab
Engineer: The Project Director, PKLI & RC, IDAP
Consultant: M/s CPG – Arcop and Associates J.V
Project Management M/s NESPAK and its External Associates

Consultant: (M/s Mooyoung-CM)
Contractor: M/s Uni build Associates (pvt.) Ltd.
Original Contract Price: 1983,746,286 PKR
Type of Contract: Admeasurement, based on FIDIC 1999
Commencement Date: 23rd December, 2016

Completion Period: Section-1: 175 days from the date of commencement for
LG+G+3 and Mechanical transfer floor grey Structure
handing over Section-2: 525 days from the date of
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commencement for 4th to 9th floor complete with finishing

works handing-over.
Original Completion Date: 31st May, 2018
b) Background of the case

During the currency of the Contract, the Contractor executed the works as per
provisions of the Contract with full zeal and submitted his routine Interim Payment
Applications(IPAs) under Sub-Clause14.3 of GCC to the Engineer’s Assistant/the
Engineer who after verification issued the IPCs under 14.6 of GCC after making all
the contractual deductions, i.e. Retention Money, Mobilization Advance, Secured
Advance (if any) and taxes etc. The income tax had also been deducted under division
III of Part III of First Schedule of Section 152 (1) (c) of Income Tax Ordinance 2001,
i.e. 7.5 % of the gross amount payable to the Contractor under the Law of the
Country.
The Employer paid to the Contractor regularly, the amounts certified by the Engineer
up to IPC#12 under Sub-Clause14.7 and this contractual practice continued till first
twelve (12) IPCs. But when The Contractor’s thirteen (13 th) IPC was issued by the
Engineer; the Employer’s finance department deducted an extra amount unilaterally
from the certified payment without assigning any reasons and this practice of
deduction remained continue by the Employer from the onward IPCs as well issued
by the Engineer.
The Contractor promptly enquired from the Engineer/the Employer through various
letters (referred in Brief History) the basis/justification of such unwarranted extra
deductions but no response/comments was/were received from the
Engineer/Employer until now. However, upon our query in a meeting, it was verbally
said that these deductions had been made upon the instruction of a team of the
Auditor General of Pakistan on the basis of some audit Para.
As stated above para, the Employer unilaterally made deductions from IPC # 13
onwards, on the gross amount of the certified payments. The following table gives a
clear picture of the deducted amounts made by the Employer unilaterally in various
IPCs until to date:
Page 4 of 32
The Contractor upon no response/action by the Employer, repeatedly enquired from the
Engineer/Employer the basis /reasons for these unjustified deductions which were badly
hampering the Contractor’s progress of the Works. The Contractor also apprised that such
non-contractual deductions has been impacting the Completion Date of the Project and the
Contractor has the right to claim financing charges under the Contract on these unpaid
amounts. Even upon requesting for the Engineer’s determination under Sub-Clause 3.5, the
Engineer remained quiet and did not issue his any determination. The Contractor ultimately
made it dispute and referred to DAB for its decision.
2. REJOINDER TO THE RESPONSE OF THE RESPONDENT
In compliance with item-c of Sub-Clause 6.5 of the DAB Operating procedures and Guidelines, the
Contractor (The Claimant) would like to submit seriatim reply/ rebuttal to the Employer's Position
Statement in the following manner:
Item-1. The Parties

Sub-items 1.1 to 1.2 No comments
Item-2. Background Facts
Sub-items 2.1 to 2.2 No Comments

Sub-items 2.3 The Origin of the Present Dispute
The Respondent’s Stance Taken in the Position Statement
Page 5 of 32
The Claimant’s Reply/Comments

The respondent under Sr. No. -4 of the Sub-item 2.3 is admitting that before the start of an
external audit by AGP team, the Client (Respondent) was regularly paying to the Contractor
in accordance with the provisions of Sub-Clause14.7 of GCC, once the IPCs was/were
certified by the Engineer’s Assistant/The Engineer. It means that he has committed the
violation of Sub-Clause14.7 of GCC by making extra deduction in lieu of Withholding Tax
on the recommendation of Audit team of AGP.
Here it is to be noted that the withholding tax was already been deducted by the Client from
all IPCs paid by the Client before Auditor’s recommendation for extra deductions on account
of Withholding Tax.
Additionally, the respondent under Sr.No.-5 has expressly stated this Withholding Deduction
pointed by the Audit team as ‘Alleged’ inclusion of Income tax in overhead and Profit in the
Claimant prices, meaning thereby that the Respondent is not convinced by the
recommendations of the Audit of Extra deductions.
Furthermore, we strongly disagree with the Respondent’s compliance of making deduction
on the advice of the AGP’s Team as stated under Sr. No. 6 which is totally out of the
provisions of the Contract signed between the Parties to the Contract. There is no such role of
the Audit Team is defended in our Contract Document and we believe that all such
deductions made by the Employer are extra contractual, unjustified and totally beyond the
provisions of the Contract as explained by the Claimant in his Position Statement.
2.4 The Parties’ Positions

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Sr.No.8: There is no provision in the Contract that allows the Respondent to take any such
action (interim measure) on the recommendation of the AGP’s Auditor.
Sr.No.9: The Respondent’s disagreement with the Contractor stance of “unjustified and non-
contractual deduction” does not support with any contractual provision. Contractor
pointed out vide his letter of October17, 2018 the detail of unjustified and non-
contractual deductions ( Rs 21.4 M) made by IDAP (the Employer) in IPC#13 &14 and
enquired for the reasons and contractual ground of these unjustified deductions besides
apprising to the Employer that such deductions are badly affecting the pace of Works at
Site.
(Ref:) UBA/PKLI/A2/18/73 Dated: 17th October, 2018 [Exhibit -1]
1. The Contractor further notified in Feb, 2019 that the deductions made by the Employer
in IPCs is unjustified and non-contractual which is hampering the progress of the Works.
In this letter, the Contractor further apprised that he did not agree such deductions made
by the Employer and will reserve the rights to claim under the Contract.
(Ref:) UBA/PKLI/A2/18/84 Dated: 2nd February, 2019 [Exhibit-2]
3. Upon no response/action by the Employer, the Contractor provided the detail of the
unjustified deductions vide letter of February 09,2019 made by the Employer up to
IPC-15 (Rs 25.66 Million) and reiterated to enquire the basis /reasons for these
unjustified deductions which were badly hampering the Contractor’s progress of the
Works. The Contractor also apprised that such non-contractual deductions may impact
the Completion Date of the Project.
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(Ref: UBA/PKLI/A2/18/86 Dated: 9th February, 2019 [Exhibit -3]
4. Upon the Employer’s concerns on slow progress of the Works, the Contractor via letter
dated April 01,2019 elucidated that the main reason among others was the unjustified
deductions from the Contractor’s IPCs and release of Retention Money due to non-
issuance of Taking-Over Certificate of the Parts of the Works being used by the
Employer. The Contractor further emphasized in this letter that the Employer has not yet
apprised the basis of the non-contractual deductions of Rs 25.66 Million and is quite
silent since the start of such deductions and has not made any response/justification.
(Ref:) UBA/PKLI/A2/19/92 Dated: 01st April, 2019 [Exhibit -4]
5. The Contractor while responding to the P.M, Project Management Consultants, the
reasons/justification for the slow progress of the Works & increase in Variances ; also
pointed out vide letter of May 29,2019 that a huge sum of unjustified deductions of Rs
25.66 Million from IPCs had been made by the Employer without any basis/intimation
to the Contractor in addition to pending payment of Rs 140 Million against work done
under variations.
(Ref: ) UBA/PKLI/A2/19/97 Dated: 29th May, 2019 [Exhibit - 5]
6. Upon further deduction in IPC #16 by the Employer’s finance department, the Contractor
by referring previous letters written by the Contractor regarding this matter of unlawful
deductions again protested and asked the reasons/justification for these deductions vide
letter No. UBA/PKLI/A2/19/106 Dated 03 October, 2019.
The Contractor in this letter also apprised that the Employer is obliged in pursuance of
Sub-Clause 14.7(b) of GCC to pay the certified amount of each Interim Payment
Certificate and cannot make any deductions from the certified amount by the Engineer.
Furthermore, the Contractor notified that he reserves the right to claim additional
financing charges under the Contract on the accumulated non-contractual deductions of
Rs 30.54 Million made by the Employer’s Account Department at its own without any
intimation.
(Ref: ) UBA/PKLI/A2/19/106 Dated: 03rd October, 2019 [Exhibit - 6]
Page 8 of 32
7. The Contractor vide letter of October 07,2019 claimed the financial charges as per Sub-
Clause 14.8[Delayed Payment] of GCC and PCC, in addition to the accumulative
deducted/withheld amount. The Contractor’s total claimed amount at then was of PKR
34.124 Million up to September 30, 2019.
(Ref: ) UBA/PKLI/A2/19/109 Dated: 07th October, 2019 [Exhibit - 7]
8. Upon the Constant stillness and no response from the Employer, the Contractor
ultimately requested to the Engineer vide letter of March 02,2020 to determine the matter
under Sub-Clause 3.5 of GCC of these non-contractual deducted amounts made by the
Employer unilaterally without any information to the Contractor. In this request, it was
again highlighted that the Employer cannot make any deductions from the certified
amounts at its own and it is his obligation under Sub-Clause 14.7(b) of GCC to pay to the
Contractor the amount certified in each Interim Payment Certificate within 7 days after
the Engineer receives the Statement and supporting documents. Furthermore, it was
reiterated that the Contractor reserves the contractual rights to claim further due
financial charges on delayed payments of such deductions in addition to the
reimbursement of additional amounts the Contractor has incurred and continuously
incurring on managing the financial resources and in shape of overheads to complete the
Contract.
(Ref:) UBA/Admin/PKLI/A2/20/126 Dated: 02nd March, 2020 [Exhibit -8]
9. The Employer did not determine the matter under Sub-Clause3.5 of GCC. Upon waiting
until April 18,2020, the Contractor confirmed vide letter of April 18,2020 that the
Engineer has neither determined the matter nor has given any response/comments.
Furthermore, the Contractor intimated to the Employer that it has now become a dispute
between the Parties to the Contract which is being referred to DAB under Sub-Clause 20.4 of
GCC for obtaining its Decision.
(Ref:) UBA/PKLI/A2/20/130 Dated: 18th April, 2020 [Exhibit -9]
2. STATEMENT OF THE DISPUTE
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As stated under item b) of Section-A above, the Employer’s unilateral deductions

from IPC 13 onwards and his continued silence upon a series of the Contractor’s
letters, has kept the Contractor deprived of its contractual rights and has financially
affected his cash flow as well. Even, upon the Contractor’s request for Engineer’s Determination
under Sub-Clause 3.5, the Engineer, kept quiet and did not issue its determination. This ultimately
evolved a dispute between the Parties to the Contract. The crux of the dispute is described
hereunder:
“The amounts deduced by the Employer unilaterally from the certified payments of
IPC 13 to 16 without assigning any reasons is incorrect, non-contractual and
illogical which has no contractual basis and is totally unjustified under the ambit of
the Contract. Neither it falls under Sub-Clause13.7 [Subsequent Legislation] nor
does it fall under the Law of the Country. The Employer is not entitled to make such
deductions at its own while making payment of IPCs to the Contractor under Sub-
Clause 14.7(b) of GCC and PCC.”
3. CONTRACTUAL ELUCIDATION AND THE CONTRACTOR’S

POSITION STATEMENT
1. As stated in the Background of the dispute, the Contractor submitted his

routine IPAs under Sub-Clause14.3 of GCC to the Engineer’s Assistant/the
Engineer who after verification issued the IPCs under 14.6 of GCC after
fulfilling all the contractual requirements and making the necessary
deductions, i.e. Retention Money, Mobilization Advance, Secured Advance (if
any) and taxes etc.Up to IPC#12, there was no issue and the Employer had
paid to the Contractor regularly the certified amount of each IPC in pursuance
of Sub-Clause14.7. In IPC#13, the Employer made an unusual deduction of
PKR17.13 Million without assigning any reason(s). Upon continued deductions
from IPC #14 to16 by the Employer’s Finance Department unilaterally, the
Contractor reiterated and repeatedly asked the reasons/justification for these
unwarranted deductions through various letters but the Engineer/Employer
remained quiet and did not response to address this issue. Resultantly, the
Page 10 of 32
Contractor’s progress of Works suffered a lot due to its cashflow problems. This
was notified to the Engineer but proved all in vain.
2. Pursuant to item-b) of Sub-Clause 14.7 of GCC and PCC, the Contractor believes that the
Employer is liable to pay the amounts certified in each IPC within seven (7) days and has no
right to deduct any amount at its own. He, however, can raise his claim, if any, by
proceeding under Sub-Clause 2.5 of GCC and other relevant provisions of the Contract.
Thus, there is no any provision under the Contract that allows the Employer to make any
deduction unilaterally from the certified amounts of the IPCs.
3. Pursuant to Sub-Clause 3.5 of GCC, the Engineer was required to issue its Determination on
these unjustified deductions, but he did not do that. The Engineer’s persistent stillness
and no action/response on these deductions gives an indication that the Engineer
himself is not convinced with such unjustified deductions which they might have
been made by the finance section of the Employer on the instruction of some other
Government entity [Auditor general of Pakistan].
4. Under the law of the Country, withholding tax (Income tax) @ 7.5% was
being deducted in IPCs regularly throughout the currency of the Contract.
There was no change in the income tax Law under Sub-Clause 13.7 of GCC.
5. The Contractor considers that the Employer’s action of making deductions is
not admissible under the Contract and its continuous silence upon the
Contractor’s numerous requests and notices, proved that the Employer is not
conclusive on the issue. For the time being, if we consider that it was made on
the basis of some audit para raised by Auditor General of Pakistan, even then,
such deductions are not justified; as the Contract as well as Law of the Country
does not permit the Employer to do that.
6. Thus, neither it may be treated as a claim of the Employer under Sub-Clause
2.5 nor it may be considered a subsequent legislation under Sub-Clause 13.7 of
GCC. Therefore, the Employer’s deductions in the certified amounts of IPCs
issued by the Engineer is totally baseless, unwarranted, illegal and illogical
which should be immediately released to the Contractor along with financial
charges from the date of certification of the relevant IPCs.
In view of above elucidation, the Contractor takes his position as follows:
Page 11 of 32
The deductions made by the Employer from the certified amounts of the IPCs while
fulfilling his obligation under Sub-Clause 14.7(b) of GCC and PCC is incorrect,
unwarranted and illogical and is not admissible in any way under the ambit of the Contract.
The Engineer/Employer’s continuous silence upon the Contractor’s query through numerous
letters/Request for Engineer’s Determination on the issue of such deductions, itself indicates
that the Engineer/Employer is not convincing with such deductions and seems to be willing
to release the amounts of such unjustified deductions. The Contractor therefore considers
himself to be fully entitled for payment of the withheld/deducted amounts along with
financial charges in pursuance of Sub-Clause14.8 of GCC and PCC from the date of
due payment of the said IPCs.
4. DETAIL OF WITHHELD AMOUNT AND CALCULATION OF

INTEREST ACCRUED
The details specifying the amount of deductions made with dates by the Employer’ staff
from each IPC and the financial charges accrued up to date of submission of this position
statement are given in [Exhibit -10].
5. REQUEST TO DAB FOR ITS DECISION
Keeping into consideration of the above submissions, the Contractor hereby requests to
DAB in pursuance of Sub Clause 20.4 of GCC to render its decision in the following
manner:
a) The amounts deduced by the Employer unilaterally from IPC 13 to 16 has no

contractual basis/logic and is totally unjustified under the ambit of the Contract
and the Employer has failed to fulfill his obligation under Sub-Clause 14.7(b) of
GCC to pay to the Contractor the amount certified in the said IPCs.
b) The Employer should immediately release such deducted amounts along with
financial charges on delayed payments as per Sub-Clause 14.8[Delayed Payment]
of GCC and PCC as has been claimed by the Contractor in [Exhibit -10] up to the
date of payment of such amounts by the Employer.
Page 12 of 32
Exhibit-01
Page 13 of 32
Exhibit-02
UBA/PKLI/A2/18/84 Dated: 2nd February, 2019
Page 14 of 32
Exhibit-03
UBA/PKLI/A2/18/86 Dated: 9th February, 2019
Page 15 of 32
Exhibit-04
UBA/PKLI/A2/19/92 Dated: 01st April, 2019
Page 16 of 32
Exhibit-05
UBA/PKLI/A2/19/97 Dated: 29th May, 2019
Page 17 of 32
Exhibit-06
UBA/PKLI/A2/19/106 Dated: 03rd October, 2019
Page 18 of 32
Exhibit-07
Page 19 of 32
Exhibit-08
UBA/Admin/PKLI/A2/20/126 Dated: 02nd March, 2020
Page 20 of 32
Exhibit-9
UBA/PKLI/A2/20/130 Dated: 18th April, 2020
Page 21 of 32
Exhibit-10
Calculations of Contractor’s Claim
Page 22 of 32
Exhibit-11
Relevant Contract Provisions
Page 23 of 32
6. Relevant Contract Provisions
The applicable clauses of Contract are reproduced hereunder when read in conjunction
with Particular Conditions of Contract, General Conditions of Contract and Appendix to
Bid or any other documents specified in the applicable clauses, for the assistance of
members of Dispute Adjudication Board (DAB).
General Conditions of Contract
1.1.2 PARTIES & PERSONS
1.1.2.1 "Party'' means the Employer or the Contractor as the context

requires.
1.1.2.2 "Employer” means the person named as employer in the Appendix

to Tender and the legal successors in title to this person.
1.1.2.3 "Contractor" means the person(s) named as contractor in the Letter of

Tender accepted by the Employer and the legal successors in title to this person(s).
1.1.2.4 "Engineer" means the person appointed by the Employer to act as

the Engineer for the purposes of the Contract and named in the Appendix to
Tender, or other person appointed from time to time by the Employer and notified
to the Contractor under Sub-Clause 3.4 [Replacement of the Engineer].
1.1.2.9 "DAB" means the person or three persons so named in the Contract. or
other person(s) appointed under Sub-Clause 20.2 [Appointment of the Dispute
Adjudication Board] or Sub-Clause 20.3 [Failure to Agree Dispute Adjudication
Board]
Sub-Clause 1.1.4 [Money and Payments]
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1.1.4.2 “Contract Price” means the price defined in Sub-Clause 14.1 [The Contract Price],
and includes adjustments in accordance with the Contract.
Sub-Clause 2.5 [EMPLOYER’S CLAIMS]
If the Employer considers himself to be entitled to any payment under any Clause of
these Conditions or otherwise in connection with the Contract, and/or to any extension
of the Defects Notification Period, the Employer or the Engineer shall give notice and
particulars to the Contractor. However, notice is not required for payments due under
Sub-Clause 4.19 [Electricity, Water and Gas] under Sub-Clause
4.20 [Employer's Equipment and Free-Issue Material], or for other services requested
by the Contractor.
The notice shall be given as soon as practicable after the Employer became aware of
the event or circumstances giving rise to the claim. A notice relating to any extension
of the Defects Notification Period shall be given before the expiry of such period.
The particulars shall specify the Clause or other basis of the claim and shall include
substantiation of the amount and/or extension to which the Employer considers
himself to be entitled in connection with the Contract. The Engineer shall then
proceed in accordance with Sub-Clause 3.5 [Determinations] to agree or determine
(i) the amount (if any) which the Employer is entitled to be paid by the Contractor.
and/or (ii) the extension (if any) of the Defects Notification Period in accordance with
Sub- Clause 11.3 [Extension of Defects Notification Period].
This amount may be included as a deduction in the Contract Price and Payment
Certificates. The Employer shall only be entitled to set off against or make any
deduction from an amount certified in a Payment Certificate, or to otherwise claim
against the Contractor, in accordance with this Sub-Clause.
Sub-Clause 3.5 [Determinations]
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Whenever these Conditions provide that the Engineer shall proceed in accordance with
this Sub-Clause 3.5 to agree or determine any matter, the Engineer shall consult with each
Party in an endeavor to reach agreement. If agreement is not achieved, the Engineer shall
make a fair determination in accordance with the Contract, taking due regard of all relevant
circumstances.
The Engineer shall give notice to both Parties of each agreement or determination, with
supporting Particulars. Each Party shall give effect to each agreement or determination
unless and until revised under Clause 20 [ Claims, Disputes and Arbitration].
Sub-Clause14.3 [Application for Interim Payment Certificates]
The Contractor shall submit a Statement in six copies to the Engineer after the end of
each month. in a form approved by the Engineer. Showing in detail the amounts to
which the Contractor considers himself to be entitled. together with supporting
documents which shall include the report on the progress during this month in
accordance with Sub-Clause 4.21 [Progress Reports].
The Statement shall include the following items. as applicable. which shall be expressed in
the various currencies in which the Contract Price is payable. in the sequence listed:
(a) the estimated contract value of the Works executed and the Contractor’s
Documents produced up to the end of the month (including Variations but
excluding items described in sub-paragraphs (b) to (g) below):
(b) any amounts to be added and deducted for changes in legislation and changes in
cost . in accordance with Sub-Clause 13.7 [Adjustments for Change s in
Legislation] and Sub-Clause 13.8 [Adjustments for Changes in Cost]:
(c) any amount to be deducted for retention, calculated by applying the percentage of
retention stated in the Appendix to Tender to the total of the above amounts. until
the amount so retained by the Employer reaches the limit of Retention Money (if
any) stated in the Appendix to Tender:
(d) any amounts to be added and deducted for the advance payment and repayments in
accordance with Sub-Clause 14.2 [Advance Payment]:
Page 26 of 32
(e) any amounts to be added and deducted for Plant and Materials in accordance with
Sub-Clause 14.5 [Plant and Materials intended for the Works]:
(f) any other addition s or deductions which may have become due under the Contract
or otherwise. Including those under Clause 20 [Claims. Disputes and Arbitration]:
and
(g) the deduction of amounts certified in all previous Payment Certificates.
Sub-Clause 14.6 [Issue of Interim Payment Certificates]
No amount will be certified or paid until the Employer has received and approved the
Performance Security. Thereafter. the Engineer shall. within 28 days after receiving a
Statement and supporting documents, issue to the Employer an Interim Payment
Certificate which shall state the amount which the Engineer fairly determines to be due.
with supporting particulars.
However. prior to issuing the Taking-Over Certificate for the Works. the Engineer shall
not be bound to issue an Interim Payment Certificate in an amount which would (after
retention and other deductions) be less than the minimum amount of Interim Payment
Certificates (if any) stated in the Appendix to Tender. In this event. the Engineer shall give
notice to the Contractor accordingly.
An Interim Payment Certificate shall not be withheld for any other reason. although:
i) if any thing supplied or work done by the Contractor is not in

accordance with the Contract. the cost of rectification or
replacement may be withheld until rectification or replacement
has been completed: and/or
ii) if the Contractor was or is failing to perform any work or
obligation in accordance with the Contract. and had been so
notified by the Engineer. the value of this work or obligation may
be withheld until the work or obligation has been performed.
Page 27 of 32
The Engineer may in any Payment Certificate make any correction or modification that
should properly be made to any previous Payment Certificate. A Payment Certificate shall
not be deemed to indicate the Engineer's acceptance. approval. consent or satisfaction.
Sub-Clause 14.7 [Payment]
The Employer shall pay to the Contractor:
iii) the first instalment of the advance payment within 42 days after issuing the
Letter of Acceptance or within 21 days after receiving the documents in
accordance with Sub-Clause 4.2 [Perl o rm ance Security] and Sub-Clause
14.2 [Advance Payment ] . whichever is later:
iv) the amount certified in each Interim Payment Certificate within 56 days
after the Engineer receives the Statement and supporting documents: and
v) the amount certified in the Final Payment Certificate within 56 days after
the Employer receives this Payment Certificate.
Payment of the amount due in each currency shall be made into the bank account.
nominated by the Contractor. in the payment country (for this currency) specified in the
Contract.
Sub-Clause 14.8 [Delayed Payment]
If the Contractor does not receive payment in accordance with Sub-Clause 14.7 [Payment). the
Contractor shall be entitled to receive financing charges compounded monthly on the
amount unpaid during the period of delay. This period shall be deemed to commence on
the date for payment specified in Sub-Clause 14.7 [Payment ]. irrespective (in the
case of its sub-paragraph (b)) of the date on which any Interim Payment Certificate
is issued.
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Unless otherwise stated in the Particular Conditions. these financing charges shall be
calculated at the annual rate of three percentage points above the discount rate of the
central bank in the country of the currency of payment. and shall be paid in such currency.
The Contractor shall be entitled to this payment without formal notice or certification. and
without prejudice to any other right or remedy.
Sub-Clause 20.1[Contractor’s Claims]
If the Contractor considers himself to be entitled to any extension of the Time for
Completion and/or any additional payment, under any Clause of these Conditions or
otherwise in connection with the Contract, the Contractor shall give notice to the
Engineer, describing the event or circumstance giving rise to the claim. The notice
shall be given 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.
If the Contractor fails to give notice of a claim within such period of 28 days, the
Time for Completion shall not be extended, the Contractor shall not be entitled to
additional payment, and the Employer shall be discharged from all liability in
connection with the claim. Otherwise, the following provisions of this Sub-Clause
shall apply.
Sub-Clause 20.4 [Obtaining Dispute Adjudication Board’s Decision]
If a dispute (of any kind whatsoever) arises between the Parties in connection with, or
arising out of, the Contract or the execution of the Works, including any dispute as to any
certificate, determination, instruction, opinion or valuation of the Engineer, either Party may
refer the dispute in writing to the DAB for its decision, with copies to the other Party and
the Engineer. Such reference shall state that it is given under this Sub-Clause.
For a DAB of three persons, the DAB shall be deemed to have received such reference on
the date when it is received by the chairman of the DAB.
Page 29 of 32
Both Parties shall promptly make available to the DAB all such additional information,
further
access to the Site, and appropriate facilities, as the DAB may require for the purposes of
making a decision on such dispute. The DAB shall be deemed to be not acting as
arbitrator(s).
Within 84 days after receiving such reference, or within such other period as may be
proposed by the DAB and approved by both Parties, the DAB shall give its decision, which
shall be reasoned and shall state that it is given under this Sub-Clause. The decision shall be
binding on both Parties, who shall promptly give effect to it unless and until it shall be
revised in an amicable settlement or an arbitral award as described below. Unless the
Contract has already been abandoned, repudiated or terminated, the Contractor shall
continue to proceed with the Works in accordance with the Contract.
If either Party is dissatisfied with the DAB’s decision, then either Party may, within 28 days
after receiving the decision, give a Notice of Dissatisfaction to the other Party indicating its
dissatisfaction and intention to commence arbitration. If the DAB fails to give its decision
within the period of 84 days (or as otherwise approved) after receiving such reference, then
either Party may, within 28 days after this period has expired, give a Notice of
Dissatisfaction to the other Party.
In either event, this Notice of Dissatisfaction shall state that it is given under this Sub-
Clause, and shall set out the matter in dispute and the reason(s) for dissatisfaction. Except as
stated in Sub-Clause 20.7 [ Failure to Comply with Dispute Board’s Decision] and Sub-
Clause 20.8 [ Expiry of Dispute Board’s Appointment], neither Party shall be entitled to
commence arbitration of a dispute unless a Notice of Dissatisfaction has been given in
accordance with this Sub-Clause.
If the DAB has given its decision as to a matter in dispute to both Parties, and no Notice of
Dissatisfaction has been given by either Party within 28 days after it received the
DAB’s decision, then the decision shall become final and binding upon both Parties.
Particular Conditions of the Contract
Page 30 of 32
Sub-Clause 3.4 [Local Taxation]
The price bid by the Contractor shall be deemed to include all applicable duties, business
taxes, and other taxes that may be levied according to the Laws of Pakistan applicable on
the Base Date, on the Contractor's equipment, materials, and supplies (permanent,
temporary and consumable) acquired for the purpose of the Contract and on the services
performed under the Contract, unless otherwise stated in the Contract.
All payments to the Contractor shall be subject to deduction of any Tax(es) at source on
amount payable to the Contractor as per prevailing rules or as per rules enforced by the
Government of Pakistan from time to time, unless the Contractor is exempted by the
relevant tax authority for which the Contractor will have to submit to the Employer, the
necessary documents certifying the exemption.
Sub-Clause 14.7 [PAYMENT]
The Employer shall pay to The Contractor:
a. The first instalment of the advance payment, within the time mentioned in Appendix
to Bid, after issuing the Letter of Acceptance or within 21 days after receiving the
documents in accordance with Sub-Clause 4.2 [ Performance Security] and Sub-
Clause 14.2 [Advance Payment], whichever is later;
b. The amount certified in each interim Payment Certificate within the time mention ed
in Appendix to Bid {7 (Seven) working days for payment by the Employer after
receipt of Interim Payment Certificate from the Engineer Complete in all respects},
after the engineer receives the Statement and supporting documents. Adhoc /
provisional payment@ fifty percent (50%) shall be released within seven (07)
calendar days after receipt of interim payment certificate from the engi neer
complete in all respect. Any subsequent adhoc / provisional payment shall on ly be
released after actualization / adjustment of any previous payment.
Page 31 of 32
c. the amount certified in the Final Payment Certificate, within the time mention ed in
Appendix to Bid (Fifty-Six (56) Calendar days for payment by the Employer).
Sub-Clause 14 .8 [DELAYED PAYMENT]
If the Contractor does not receive payment in accordance with Sub-Clause 14.7
[Payment), the Contractor shall be entitled to receive financing charges on the amount
unpaid during the period of delay. This period shall be deemed to commence on the
date for payment specified in Sub-Clause 14. 7 [Payment]. irrespective (in the case of
its sub-paragraph (b)) of the date on which any Interim Payment Certificate is issued.
The financing charges shall be at the rate of KIBOR + 0.5 % per annum and shall be
paid in such currency.
The Contractor shall be entitled to this payment without formal notice or certification.
and without prejudice to any other right or remedy.
Page 32 of 32

28-8-20 DISPUTE-2 REJOINDER-draft

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28-8-20 DISPUTE-2 REJOINDER-draft

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Request №: 2 for DAB’s Decision

CONSTRUCTION OF PAKISTAN KIDNEY& LIVER

Before the Dispute Adjudication Board

REJOINDER TO THE RESPONSE BY THE RESPONDENT

Unjustified Deductions made by the Respondent Unilaterally from the

Uni Build Associates (Pvt) Ltd.

Infrastructure Development Authority of Punjab (IDAP)

28th August, 2020

5. Detail of Withheld Amount and Calculation of Interest Accrued

6.DAB for Decision....................................................................................................................

Relevant Contarct Provisions...................................................................

Name of Contract: Construction of Pakistan Kidney & Liver Institute and

Research Centre (TRUST) Hospital Building (Package – A2)

Employer: CEO, Infrastructure Development Authority of Punjab

Engineer: The Project Director, PKLI & RC, IDAP

Consultant: M/s CPG – Arcop and Associates J.V

Project Management M/s NESPAK and its External Associates

Contractor: M/s Uni build Associates (pvt.) Ltd.

Original Contract Price: 1983,746,286 PKR

Type of Contract: Admeasurement, based on FIDIC 1999

Commencement Date: 23rd December, 2016

commencement for 4th to 9th floor complete with finishing

Original Completion Date: 31st May, 2018

b) Background of the case

2. REJOINDER TO THE RESPONSE OF THE RESPONDENT

Item-1. The Parties

Sub-items 2.1 to 2.2 No Comments

The Claimant’s Reply/Comments

2.4 The Parties’ Positions

The Claimant’s Reply/Comments

(Ref: UBA/PKLI/A2/18/86 Dated: 9th February, 2019 [Exhibit -3]

2. STATEMENT OF THE DISPUTE

As stated under item b) of Section-A above, the Employer’s unilateral deductions

3. CONTRACTUAL ELUCIDATION AND THE CONTRACTOR’S

1. As stated in the Background of the dispute, the Contractor submitted his

In view of above elucidation, the Contractor takes his position as follows:

4. DETAIL OF WITHHELD AMOUNT AND CALCULATION OF

5. REQUEST TO DAB FOR ITS DECISION

a) The amounts deduced by the Employer unilaterally from IPC 13 to 16 has no

6. Relevant Contract Provisions

General Conditions of Contract

1.1.2 PARTIES & PERSONS

1.1.2.1 "Party'' means the Employer or the Contractor as the context

1.1.2.2 "Employer” means the person named as employer in the Appendix

1.1.2.3 "Contractor" means the person(s) named as contractor in the Letter of

1.1.2.4 "Engineer" means the person appointed by the Employer to act as

Sub-Clause 1.1.4 [Money and Payments]

Sub-Clause 2.5 [EMPLOYER’S CLAIMS]

Sub-Clause 3.5 [Determinations]

Sub-Clause14.3 [Application for Interim Payment Certificates]

Sub-Clause 14.6 [Issue of Interim Payment Certificates]

i) if any thing supplied or work done by the Contractor is not in

Sub-Clause 14.7 [Payment]

The Employer shall pay to the Contractor:

Sub-Clause 14.8 [Delayed Payment]

Sub-Clause 20.1[Contractor’s Claims]

Sub-Clause 20.4 [Obtaining Dispute Adjudication Board’s Decision]

Particular Conditions of the Contract

Sub-Clause 3.4 [Local Taxation]

Sub-Clause 14.7 [PAYMENT]

The Employer shall pay to The Contractor:

Sub-Clause 14 .8 [DELAYED PAYMENT]

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