In a previous article, Damian explained the concept of constructive acceleration. He considered how the courts and tribunals dealt with the matter and compared different approaches by courts around the world.
In this follow-up article, Marcia Davids shares her take. She details how the courts in Africa and the Middle East treat constructive acceleration.
As Damian outlines in his previous article, to understand the African approach to acceleration costs, we must look to FIDIC. The FIDIC contracts do not provide an express term for acceleration. If the contractor does want to submit a claim for extra time or costs, they should look to sub-clause 20.1. A few key points arise:
- The burden of proof lies with the contractor when they submit a claim.
- The engineer must then assess the evidence in support of the contractor’s claim.
- In submitting the claim, the contractor must give notice of the claim, and must do within 28 days.
- This notice is important. At this point, everyone involved becomes aware that there is a potential issue and extra time or payment may be due to the contractor. From hereon in, all involved should being to keep proper records to avoid future arguments.
It is at this stage that the parties may consider whether mitigation measures may be possible to reduce the effects. This collaboration can lead to a quicker resolution of the matter.
It is important to submit a notice. But should the event or circumstance turn out to be of insignificant effect, then it is not necessary to follow up the notice with a formal claim. However, had you not submitted notices at the correct time, you may find any claims you might have had barred.
The Civil Law approach
The position of time bars in construction contracts in civil law countries is different. Under common law, non-adherence to a time bar provision may render a contractor’s claim invalid. Civil codes, however, may take a more lenient approach.
Primarily, parties are to perform their obligations under the contract. To take the example of the UAE, Article 243 (2) of the UAE Civil Code states:
“With regard to the rights (obligations) arising out of the contract, each of the contracting parties must perform that which the contract obliges him to do.”
Further Article 265 (1) of the UAE Civil Code deals with contract interpretation and states:
“If the wording of a contract is clear, it may not be departed from by way of interpretation to ascertain the intention of the parties.”
From the above, the contract may require the contractor to conform with any time bars. However, there may be circumstances where it appears that the strict interpretation and imposition of the time bars would seriously prejudice the contractor. In these circumstances,t the contractor may rely on certain provisions of the UAE Civil Code to argue a more lenient approach be adopted.
Unlawful Exercising of Rights
Article 106 provides that the exercise of a right shall be unlawful if it is disproportionate to the harm suffered by the other party. In particular, Article 106 (1) states:
“A person shall be held liable for an unlawful exercise of his rights.”
Further Article 106 (2) (c) provides:
“The exercise of a right shall be unlawful: (c) if the interests desired are disproportionate to the harm that will be suffered by others.”
As explained in this article by Fenwick Elliott it may be unlawful for the contractor’s otherwise meritorious claim to be disallowed on the basis of a purely technical breach. Therefore, the employer’s reliance on the technical breach may be seen as an unlawful exercise of his rights.
In conclusion then, it appears critical to read the contract in conjunction with local law. And of course, the seeking of good quality, impartial advice can help you to make the right decisions. If you find yourself needing advice on any of the issues raised in this article, get in touch today.