My Comments Are Given Below in Red Fonts:-: Prof. Sam

My Comments are given below in red fonts
(Also see the important message at the end):-
----- Original Message ----From: Orville Cyrus Bienes

To: "Prof. Sam" <sam99@eim.ae>
Date: Wed, 27 Mar 2013 10:45:34 +0400
Subject: Question (Termination of a Bespoke Agreement)
Dear Dr. Sam,

I hope all is well.
In a bespoke agreement, can either party execute its right under a certain termination clause
(specified in that agreement) to terminate without the need to obtain a court order under the
laws of the UAE? No ! Although FIDIC types of contracts and other bespoke contracts
clearly state that the Employer can terminate if the Contractor is not performing or the
Contractor can terminate if the Employer is not paying, it is unlawful to terminate without
first getting a court order, in countries such as UAE. This applies to subcontracts as well.
However by adding further wording to these clauses, there is a way to allow for termination
without getting a court order. But for termination for convenience clauses, even by adding
further wording, it cannot be done and the court order is a must. There are few other
circumstance however, where the law itself permits termination without a court order. It is a
wide subject and cannot be described in detail in this short Q&A forum, without writing few
hundred pages of explanation. We discuss this subject in great detail (which also include
discussions on the UAE law applicable to contracts), during the Advanced Course. Next
Advanced class starts on May 10th, 2013 and there may not be another class for some time.
(Please bring along a voice recorder as we cover lot of material).
Regards,
Prof. Sam.
Prof. Indrawansa Samaratunga PhD, DSc
FRICS, FAIQS, FIQSSL, FCIArb, FCIOB, FCMI, FASI, FBEng
Chartered Surveyor, Chartered QS, Chartered Manager, Chartered Builder
Arbitrator / Mediator - London Court of International Arbitration

Arbitrator / Expert - Dubai International Arbitration Centre, UAE
Middle East Representative - Australian Inst. of Qty. Surveyors
PO Box 23461, Dubai, UAE. T +971 50 4588949 F +971 4 3378668
Looking forward to your feedback. Thank you.

Best regards,
Orville
From: S N Dhammika [mailto:sn_dhammika@yahoo.com]
Sent: Sunday, April 21, 2013 12:09 PM
To: sam99@eim.ae
Subject: CA-AC Alumni
Dear Professor,
I have two questions which require your comments.
QUESTION 1
In the event that the contract is terminated by the Employer due to Contractor's default can the
Employer cash the performance bond immediately??
No.
if NO, then when the employer can recover all his all damages.???
Only when (and if) it is found that money is due from the Contractor to the
Employer following the Engineers certification pursuant to Sub-Clause 63.3 (of
FIDIC-4th type of contracts), which could be many months or years after the
termination.
if YES, then if the damages are recoverable from due payable outstanding payments without PB still
the employer can cash the performance bond (PB) in full according to the fidic red book and settle the
balance amount upon final assessment of damages...???
No.
The reason of questioning this is because people are arguing that when the contract or
the Contractor's employment is terminated due to no fault of the Employer first action is
to en-cash the Performance bond where i believed that it is possible only upon the
assessment of total Employer's damage in which the amount is not recoverable from due
payables to the Contractor. other wise it would lead as unethical behaviour by the
Employer.
We discuss in great detail the termination provisions in both FIDIC-4 th and FIDIC-1999 and also the
UAE law applicable to terminations, and rights of the parties following a termination, during the
Advanced Class. Above is one of the topics of these discussions. Next Advanced Class starts on 10 th
May 2013.
QUESTION 2
If the Engineer did not issue the TOC within the time allowed in the contract then what are the
remedies available under Red Book..??? as it may not be appropriate to hold the Employer liable as
the Engineer has to act impartially.
Under FIDIC-1999 Red Book, the TOC is deemed to have been issued. (We discuss this during the
Advanced Class)
Under FIDIC-4th Red Book, the Contractor could either bring a tortious claim against the Engineer for
his negligence or alternatively sue the Employer for his failure to get his agent, the Engineer, to
perform the Engineers duties in a proper manner.
Regards,
Prof. Sam.

Thanks and appreciate your guidance as always..,

Cheers.,
S N Dhammika
From: naleer Adam lebbe [mailto:naleeradam@gmail.com]

Sent: Wednesday, February 20, 2013 12:23 AM
To: Prof SAM
Subject: Understanding the FIDIC Clauses
Dear Sir,
I am a Quantity Surveyor working for a Project Management and Cost Consultant
(PMC) company on behalf of the Employer for a mix development project (which
includes a clubhouse as well). Conditions of Contract for the project is FIDIC
1987, red book 4th edition.
Could you please comment on the following;
As the Employer decided to get the internal finishes of the clubhouse to an
advanced level (from 2 star to 5 star), we (PMC and the Employer) feels the
existing construction supervision and the technical team is insufficient in getting
the quality output.
Based on the conditions of contract, could we advise the contractor to reinforce
the construction supervision and the technical team (professional staff) with
suitable qualified personnel with the approval of the Employer and PMC ? Is this
possible ?
Being a change in the quality, it is a variation. However since the original scope
of work was required to be of 2 Star nature, changing it to 5 Star nature does not
appear to be a variation that can be instructed under Sub-Clause 51.1 because it
could neither be considered as necessary nor as appropriate (and therefore
existing rates/prices cannot be used as a basis to value it)
The only possibility is to first agree a price for it with the Contractor and then to
instruct it as a variation, after getting the contractors agreement to consider it a
variation.
Regards,
Prof. Sam.

Thanks
Regards
Naleer A Lebbe
Quantity Surveyor
From: Asanga Ratnayaka (Highgate Snr. Quantity Surveyor)
[mailto:asanga@highgate.ae]
Sent: Monday, January 21, 2013 12:54 PM
To: Dr. Sam
Subject: Penalty
Dear Prof. Sam,
Happy new year and hope you are doing well.
As usual I want your kind comments for below;
The Client wants to apply penalty on the contractor even they (The Client) not occupied the place.
Is someone entitled to charge penalty even though they have not used the building since and have
not suffered any financial loss?
Your question is not clear. If the Contractors obligations were completed in a timely manner, and the
Employer thereafter did not take-over / occupy the building, then the Contractor is not liable for
penalties from the day he completed his obligations until whatever the day, the Works would be takenover.
Regards,
Prof. Sam.

Thank you.
Regards
Asanga Rathnayaka Snr Quantity Surveyor
From: Suneth Karunanayaka [mailto:post2suneth@gmail.com]

Sent: Tuesday, January 29, 2013 1:20 PM
To: sam99@eim.ae
Subject: Fidic claims
Dear Sir,
Have a nice day for you..!
If there are items which are not in the BOQ but in tender drawings & Scope of
work can the contractor claim for the payments for the works as per FIDIC?(Remeasurable Contract). YES.
I read Subclauses 4.11/Clauses 13 & 12 in FIDIC 1999.
Sub-Clause 4.11 cannot be construed to bring the value of all missing items of
the BOQ within the Accepted Contract Amount, (which can only be done in Lump
Sum Contracts), due to the existence of Sub-Clause 14.1 (c), according to which
the BOQ quantities are not the actual and correct quantities, and therefore for
payment purpose, actual and correct quantities executed at site should be remeasured.
However the huge deficiency in FIDIC 1999 to make this valuation (that we
discuss in detail during the worked example for Sub-Clause 12.3 at the Advanced
Class), leave room for many disputes unless addressed correctly at the time of
entering into the Contract.
This is only one deficiency, and there are many shortcomings of this nature in
FIDIC 1999 which Contract Administrators should essentially know about, without
which FIDIC-1999 contracts cannot be administrated properly. Next Advanced
Class starts on May 10th, 2013.
Regards,
Prof. Sam.

Regards,
Sithum Gayan Suneth
----- Original Message ----From: Chandika Nishan
Date: Mon, 29 Apr 2013 03:13:27 -0700 (PDT)
Subject: Q1
Dear Sir,
Please give me your comments on the following matter.
This project includes and separated in to Two Zones. In zone-1, it was

recognized the existence of garbage material in the area to be excavated and
the same included in the drawings . But, in the Zone-2 it was not shown.
However, while the construction, due to the garbage material found by the
contractor in zone-2 during the road excavation, he had to excavate more to
ascertain a layer of suitable material to set the road profile.
However, Road Finish level remain but, excavation and filling qty increased due
to the changes in Excavated surface level in ascertaining a suitable layer. Does it
constitute a variation? is contractor entitle for EOT?
If it can be demonstrated that the Contractor could not have known about the
existence of garbage material in Zone 2, even after examining all tender
documents given to him (including soil investigation reports etc.) and even after
visiting the site during the Tender Stage, then under FIDIC-4 th type of contracts
this would be a Not Foreseeable Physical Condition referred to in Sub-Clause
12.2, and the Contractor would be entitled to EOT and costs.
Regards,
Prof. Sam.

Thanks
Chandika Nishan
----- Original Message ----From: Ninan Mathen
Date: Mon, 29 Apr 2013 07:23:23 +0100
Subject: Reduction of Penalty
Dear Prof. Sam

Thank you very much for your guidance and information over the years. We
appreciate your valuable advice.
We would like to receive your comment on the following.
In accordance with Clause 47.2 (Reduction of Penalty) of the Conditions of
Contract,
If, before the Time for Completion of the whole of the Works or, if applicable any
Section, a Taking-Over Certificate has been issued for any part of the Works or of a
Section, the penalty for delay in completion of the remainder of the Works or of
that Section shall, for any period of delay after the date stated in such Taking-Over
Certificate, and in the absence of alternative provisions in the Contract, be reduced
in the proportion which the value of the part so certified bears to the value of
the whole of the Works or Section, as applicable. The provisions of this Sub-Clause
shall only apply to the rate of penalty and shall not affect the limit thereof.
Assuming that the total length of a Sewerage Network Pipe is 1,000 Mtrs
including 50 manholes thus costs Dhs. 625,000/- and a TOC has been issued for
400 Mtrs of pipes including 20 numbers of manholes which costs Dhs250,000/However on the same date the amount certified through Interim Payment
Certificate is Dhs. 475,000/Is the penalty on the network to be reduced on the basis of the certified value of
the TOC, or on the value certified in the interim payment certificate? In other
words does the word "so certified" in the above clause refer to the amount
certified in TOC or the amount certified in the Interim Payment Certificate?
Your comment for the above will be appreciated.
Generally, Partial / Sectional Taking-Over Certificates should state the
approximate value of the taken-over part or Section. This value is mentioned for
2 purposes :1. To be used in the calculation of first half of Retention Money that should be
released in respect of the completed part /Section.
2. To be used in the calculation of the reduction of Liquidated Damages /
penalties.
The value of work done shown in a payment certificate at this moment in time
would not be used for the above two purposes as such value is also likely to
include on-account payments for the remainder of the Works (which is not takenover).
Regards,
Prof. Sam.

Kind Regards
Ninan M.M, Quantity Surveyor,

JV III Infrastructure Supervision,
From: omar joudeh [mailto:omar.106@googlemail.com]

Sent: Saturday, April 20, 2013 9:09 AM
To: Prof. Sam
Subject: Value Engineering under EPC Contract
Dear Prof. Sam;

I do appreciate your continual and valuable support to me.
I am handling a EPC Contract, and I need your assistance on the following;
under item 13.2 [Value Engineering], it is stated that the Contractor may submit
to the Employer a written proposal which if adopted will have benefits to the
Employer. The Contractor shall pay the cost of this proposal, so what are the
expected benefits to the Contractor in this case.
Please advise in the Contractor can claim any profits, additional payment, or any
benefits under any other Sub-Clauses of the EPC Contract due to proposing a
value engineering. NO
Note; Sub-Clause 13.2 is not been amended in the Particular Conditions of
Contract.
Due to this shortcoming in the Contract, there is no incentive for Contractors to
come up with VE proposals from which Employers can greatly benefit. Since it is
not obligatory for the Contractor to make such proposals, they can perhaps come
to some agreement with the Employer to reimburse their costs and also to share
any savings, before start preparing VE proposals.
In the FIDIC-1999 Red Book however, there is a provision to share the savings
which we discuss during the Advanced Class.
Regards,
Prof. Sam.

Best Regards
Omar K. Joudeh M.Sc. M.E, MEM
Sr. MEP Project Manager
----- Original Message ----From: pramod kumar

To: "Dr. Sam" <sam99@eim.ae>
Date: Wed, 10 Apr 2013 10:17:42 +0530
Subject: Query regarding Sub-Clause 6.5 (FIDIC 87)
Dear Sir,
I am one of the student of your class (Sound Contract Administration), I have one query
regarding Sub-Clause 6.5 - Failure by Contractor to Submit Drawings.
" If the failure or inability of the Engineer to issue any drawings or instructions is caused
in whole or in part by the failure of the Contractor to submit Drawing, Specification or
other documents which he is required to submit under the Contract, the Engineer shall
take such failure by the Contractor into account when making his determination pursuant
to Sub-Clause 6.4"
Is this Sub-Clause used for Contractor failure to submit Shop drawings, As-built drawings, which he
needs to submit to the Engineer for review. NO. If yes, then how can Engineer determine the
Cost and Time, which he can deduct from Contractor pursuant to Sub-Clause 6.4
For example, if there is an obligation in a roads project for the contractor to first survey and produce existing
ground levels, and if he delays it, and as a result the Engineer is delayed in producing the construction drawings,
then the above applies.
Regards,
Prof. Sam.

Thanks and regards

Pramod
----- Original Message ----From: jasim mohamed
To: sam99@eim.ae
Date: Mon, 08 Apr 2013 02:31:49 -0700 (PDT)
Subject: Re: Final Call - April Class - Contract Administration - Variations & Claims
Dear Prof.Sam
In our current Infra re-measurement Contract, there is an item in BOQ for Fire.H installation includes in
description pipe works and valve chamber with all fittings along with F.H itself, it means from tapping point at
main line to the F.H.
However, contract drawing typical details shows the valve with its chamber is required only where the distance
from tapping point to F.H more than 20 m.
Due to ADDC /O&M new requirement, the limit of distance to provide the valve and chamber for F.H is reduced
now to be 5 m and the designer have revised typical drawing accordingly for construction. It means now the valve
to be provided/installed if the distance more than 5 meters.
Furthermore, significant numbers of F.H were also relocated to be away from tapping points more than 5 meters
due to change in road design as well.
1-Can we deduct the cost of valve and its chamber from contractor's rate if not required ? where the distance is
less than 5meters? If a variation is instructed (which appears to be the case) to omit the valve + chamber, then
valuation of this variation, would produce the saving.
2-If the distance is between 5&20 meters, is the contractor entitled for additional cost for required valve and
chamber? Since there was no requirement originally for a valve + chamber for these short lengths, then if he is
instructed to provide them (which appears to be the case because of ADDC requirements), once again this would
be a variation requiring the Contractor to be paid for the additional work.
Regards,
Prof. Sam.

please be informed that the BOQ as per our Contract is the last priority of contract documents.
Your comments will be highly appreciated.
Best Regards.
Jasim
From: Girdhar gopal [mailto:gopalgirdhar@hotmail.com]

Sent: Saturday, April 27, 2013 2:50 PM
To: sam99@eim.ae
Subject: Alumni SCA June 2012
Dear Professor Sam,

Grateful for your continued support by sparing your valuable time and imparting the
knowledge through Q&As.
Please find attached the contractual query for your kind comments.
The project is based on Fidic, lump sum contract with the following particular condition:Priority of documents clause is deleted and new clause inserted stating that in the event of any discrepancy
between the drawings and the description in the BOQ and/or specification same shall be referred to the
Engineer. The Engineer shall have the right to choose between these. If in the opinion of the Engineer the more
stringent shall govern then the Contractor shall be obliged to comply with at no extra cost.
Kindly comment on the following:-
1)
The excavation for foundation is to be carried out up to the ground water table and then to be back filled with
selected fill up to formation level.
Contract says the soil report is approximate guide based on conditions existed and no guarantee for the
accuracy and no responsibility is assumed by the employer/Engineer. The water table was at 2.8 meter
below existing ground level as per the soil report.
During the execution, ground water table is found at 1.8 meter level and accordingly the Engineer revised
the drawings, with the reduced depth of excavation and backfilling as per the water table at time of
execution.
The Engineers view - The work of excavation/back filling is reduced by 1 meter and it is negative
variation.
Contractors view - The risk related to the soil report/ground water table was put on the Contractor and
therefore in case of benefit for the same it cannot be passed on to client. There is no reduction in the
intended original scope.
The risk passed to the contractor is limited to effects such as EOT / Prolongation Costs etc. and not for the
value of variations. If the water table was found to be lower than 2.8 M and the Engineer instructed a
variation (by increasing the excavation depth) then that variation would be valued and the Lump Sum
Contract Price would have been increased accordingly. Likewise, since a variation has been instructed (by
revising the drawings to decrease the excavation depth), this variation too should be valued and the Lump
Sum Contract Price should be decreased accordingly.
2)
Waterproofing for substructure (footing, neck columns, tie beam)

a)
b)
c)
The specification calls for 2 layer of SBS membrane

Typical drawing shows 2 coats of bitumen paint
BOQ states 1 layer of bitumen membrane
Engineers Instruction - To replace the single layer of SBS membrane (described in BOQ) with 2 coats of
bitumen paint with cost saving to client.
Contractors view: - The two coat bitumen paint is in the drawing and acceptable to Engineer and
therefore it is not replacing but choosing appropriate from the various given in the contract (discrepancy
clause is not for reduction to the contract price).
The Contractors Lump Sum Contract Price is deemed to have allowed for the most stringent / most
expensive of the above 3 versions. If the Engineer selected a less expensive version from these 3
versions and instructed it on the Contractor, then it amounts to a variation, which should be valued in
comparison to the most expensive version and the Lump Sum Contract Price should be adjusted
accordingly.
3)
Shoring for excavation for foundations

General specification is given for shoring and contractor is responsible for stability of sides of all
excavation.
There is a item for shoring in BOQ and contractor has priced.
Contractor carried out open excavation and completed the works, approved by Engineer and there was
no need for any special shoring to be carried out.
Engineers view: - The money for shoring in BOQ is not payable as it was not carried out.
Contractors view: - Deduction is not justified as shoring is only to facilitate the construction and there is
no change in scope of work.
Further not executing the shoring work is purely contractors risk, how the benefit can be passed on to
client.
Contractors view is correct. This is a Contractors risk item and there is no saving due to the Employer.
Contractors view: - The discrepancy clause is to protect the client against any claim for the extra cost by
the contractor in case more stringent requirement is to be followed/governs and not for the reduction to
the contract price.
Not really. In case 1, the risk is limited to EOT/Costs and not to the value of an eventual variation and
therefore either an increase or a decrease to the Contract Price could be the result. For case 2, the
discrepancy provision would be used to determine the scope for which allowances are made within the
Contract Price in order to value any savings and therefore would only result in decreases to the Contract
Price. Discrepancy provision does not apply to case 3.
Please keep the questions short !

Regards,
Prof. Sam.

Regards,
Girdhar Gopal
Are you prepared for the Boom in the next 6 years ?

Contract Administrators trained in the advanced techniques of administrating contracts would
be in great demand for the next 6 years and beyond due to the recent announcements of Mega
Projects in Dubai such as those given below, and the SCA Alumni can gain the essential
training in these advanced aspects of administrating contracts by attending the Advanced
Class scheduled for May 10th, 2013 (there may not be another Advanced Class for some
time):1. Ruler of Dubai has approved the Vision of Tourism project which is aimed at doubling the
current revenue from tourism to 350 bn by 2020. Together with this will come the necessity
for more hotels, infrastructure and real estate developments. During the same period, the
acceleration of the run up to 2022 world cup in Qatar would increase the requirements of
Contract Administrators at Senior / Management / Advisory levels.
2. Meydan has joined hands with Sobha to complete the multi-billion dollar phase 1 of MBR
City during the same period.
3. Emaar has announced another multi-billion dollar tower in Dubai taller than Burj Khalifa
and even taller than the proposed Kingdom Tower in SA, so that the worlds tallest tower
would still be in Dubai.

My Comments Are Given Below in Red Fonts:-: Prof. Sam

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My Comments Are Given Below in Red Fonts:-: Prof. Sam

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My Comments are given below in red fonts

(Also see the important message at the end):-

----- Original Message ----From: Orville Cyrus Bienes

Dear Dr. Sam,

Arbitrator / Mediator - London Court of International Arbitration

Looking forward to your feedback. Thank you.

Arbitrator / Mediator - London Court of International Arbitration

Thanks and appreciate your guidance as always..,

From: naleer Adam lebbe [mailto:naleeradam@gmail.com]

Arbitrator / Mediator - London Court of International Arbitration

PO Box 23461, Dubai, UAE. T +971 50 4588949 F +971 4 3378668

Arbitrator / Mediator - London Court of International Arbitration

From: Suneth Karunanayaka [mailto:post2suneth@gmail.com]

Arbitrator / Mediator - London Court of International Arbitration

This project includes and separated in to Two Zones. In zone-1, it was

Arbitrator / Mediator - London Court of International Arbitration

Dear Prof. Sam

Arbitrator / Mediator - London Court of International Arbitration

Ninan M.M, Quantity Surveyor,

From: omar joudeh [mailto:omar.106@googlemail.com]

Dear Prof. Sam;

Arbitrator / Mediator - London Court of International Arbitration

----- Original Message ----From: pramod kumar

Arbitrator / Mediator - London Court of International Arbitration

Thanks and regards

Arbitrator / Mediator - London Court of International Arbitration

From: Girdhar gopal [mailto:gopalgirdhar@hotmail.com]

Dear Professor Sam,

Waterproofing for substructure (footing, neck columns, tie beam)

The specification calls for 2 layer of SBS membrane

Shoring for excavation for foundations

Please keep the questions short !

Arbitrator / Mediator - London Court of International Arbitration

Are you prepared for the Boom in the next 6 years ?

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