Use Of Time Bar – In Other Words “giving Notices On Time” Under Construction Contracts – Construction & Planning

Both NEC and FIDIC contracts expressly state that notice of a
claim is a “condition precedent”.

The 2017 suite is very prescriptive and now contains a number of
other detailed processes and procedures that set out exactly what
is expected of each of the parties and the consequences if they
fail to comply. In some cases, non-compliance triggers a time
bar.

FIDIC 2nd edition 2017 contains 5 time bar clauses in relation
to Claims and dispute resolution process and 1 time bar in relation
to amounts due in the Final Payment Certificate.

Key changes in FIDIC 2nd Edition 2017 are;

• time bars apply to both Parties, and




• circumstances that the claiming Party can challenge in
  justifying late submission of a Notice of Claim (Sub-clause 20.2.5)
  – prejudiced, prior knowledge of the event (or circumstance)
  or the contractual (or other legal basis) of the Claim,

Notice provisions come in all shapes and sizes, and the warning
is that it is a question of interpreting and applying each
clause.

Most clauses require a notice of claim before a claim is
submitted to litigation and/or arbitration, and in addition
probably three things. Those are:

• a statement about the nature of the claim;




• the amount of the claim, which may be an estimate; and




• the contractual basis for the claim (here’s the problem
  area).

All of that information has to be contained in a notice
that’s given within the time stipulated within the clause.

The Court’s most recent approach, certainly as far as the
common law is concerned, is generally to treat any such notice
provision whether it is described expressly as a condition
precedent or not, as a condition precedent.

So, if you do not serve your notice in time or you served your
notice in time but it is deficient, e.g. didn’t adequately
state the nature, amount or contractual basis of the claim, then
you are barred from bringing a claim. And the trend in common law
outside the specific area of construction law contracts is to
favour certainty over fairness or flexibility.

Below are some useful case laws related to time
bar:

• Grove Developments v. S&T UK Ltd [2018] EWCA Civ 2448) -
  distinguish from notices under standard construction contracts (pay
  less etc) – “adequate agenda for adjudication”




• Heritage Oil & Gas Ltd v. Tullow Uganda Ltd [2013] EWCA Civ
  1048 and Teoco Ltd v. Aircom Jersey4 Ltd and others [2018] EWCA Civ
  23. What must a party do where required to state “legal
  basis” for the claim – must not leave “real scope
  for doubt” about nature and basis of claim.




• Hong Kong: Maeda Corporation and China State Construction
  Engineering (Hong Kong) Limited v. Bauer Hong Kong Limited [2020]
  HKCA 830 – notification clause based on FIDIC 2017 suite.

Giving notice under construction contracts was discussed in our
webinar on 25 March 2021 with Gordon Nardell QC, Twenty Essex and
Sue Kim, HKA. Click here to view the webinar and detailed
notes.

How can Barton Legal help?

At Barton Legal we have extensive experience in all the standard
contract forms, including JCT as well as NEC, IChemE, and
FIDIC.

We believe that an increased understanding of contractual terms
and the roles and responsibilities of all parties ensures a
successful conclusion to a project, which is why we always use
plain English and ensure you understand and can apply the terms of
your contract.

Our aim is to reduce legal gobbledegook and increase
collaboration between parties to increase the prospects of
completing your project on time and on budget.

We place great emphasis in the early stages of the contract on
understanding and preparing thoroughly, in order to avoid costly
disputes later.

The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.