William Godwin - The 2017 FIDIC Contracts

If no NOD is given by either party within the above period of 28 days the determination is deemed to have been accepted by both parties and is expressed to become final and binding on them. This is a contractual time bar, therefore, which can render an Engineer's determination final and binding. Unlike a failure to comply, in the case of a money or time claim, with the initial 28‐day notice requirement under clause 20.2 (where in certain circumstances the defaulting party may, in effect, seek an extension of time 14 ), the party who fails to give a NOD to a determination in time has no recourse. 15

Note that if the dissatisfied party is dissatisfied with only part(s) of the Engineer's determination the NOD must clearly identify it/them and the relevant part or parts are to be treated as severable from the remainder of the determination, this remainder then becoming final and binding on both parties as if the NOD had not been given.

The 2017 contracts enable an agreement achieved pursuant to clause 3.7 and an Engineer's determination which has become final and binding to be enforced by providing, in clause 3.7, that if a party fails to comply with such an agreement or with a final and binding determination then the other party may, without prejudice to any other rights he may have, refer the failure itself directly to arbitration under clause 21.6, thus making the agreement or determination enforceable to the same extent as a final and binding decision of the DAAB. 16

In keeping with the greater emphasis on proactive project management, clause 3.8 (2017 Red and Yellow Books)/3.6 (2017 Silver Book) contains a new right for either the Engineer/Employer or the Contractor's Representative to require the other to attend management meetings to discuss arrangements for future works and/or other matters in connection with the execution of the works. If either so requests, the Employer's other contractors, public authorities, or private utility companies and/or subcontractors may also attend such meetings. The Engineer or Employer is to keep a record of each management meeting and supply copies together with an action list.

1 1Unless the Contract otherwise provides, in carrying out his duties or exercising authority in connection with the Contract the Engineer is to be deemed to act for the Employer: clause 3.2, first paragraph.

2 2Unlike the 2017 Red and Yellow Books, the number of the clause dealing with determinations in the 2017 Silver Book, clause 3.5, remains the same as in the 1999 edition (rather than changing to clause 3.7).

3 3A note on terminology: in the 2017 Silver Book ‘the Employer’ is normally used when a particular function or role is carried out in fact by the Employer's Representative, except in relation to those matters where the Employer's Representative is not to be taken to act on the Employer's behalf, such as in relation to an agreement or determination under clause 3.5, and this usage is followed below.

4 4See Section 12.1.4 below.

5 5See Section 15.2.

6 6The same final say applies under clause 13.1 where the instruction is stated to be a variation and the Contractor objects, on one of the grounds allowed under that clause: see further Section 11.1.4 below.

7 7See Section 3.3.3below.

8 8These are money or time‐related claims. Clause 20.1(a) covers claims by the Employer for any additional payment from the Contractor, a reduction in the Contract Price and/or for an extension to the Defects Notification Period; a claim under clause 20.1(b) is a claim by the Contractor to any additional payment from the Employer and/or to an extension of time.

9 9See Section 15.2.5.

10 10See Section 15.2.13.

11 11See Section 16.2.

12 12See Sections 15.2.10 and 16.2.1.

13 13Although no time within which he should do so is indicated, clause 1.3 in the 2017 editions provides that all notices and other types of communication (referred to in the clause) are not to be unreasonably withheld or delayed.

14 14See Section 15.2.9.

15 15It might be possible to challenge the determination itself on the basis, for example, that the process was flawed in that the Engineer, in the Red and Yellow Books, was not acting neutrally, and then argue that this vitiated the determination so that the failure to give a NOD in time was not fatal to the claim since only a valid determination could be the subject of a NOD. An argument of that kind might succeed in some jurisdictions but there is no procedural mechanism under the contracts for disturbing a determination if no NOD is given in time.

16 16See Section 16.2.6.

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