Extension of Time for Completion and penalties for slow progress is a complex issue and is specified, globally, in most construction contract templates such as FIDIC, NEC, ENAA, VOB, as well as in construction contracts in Vietnam.

Accepting the invitation from the Faculty of Economics and Construction Management, Lawyer Le The Hung – Management Partner of CNC Vietnam Law Firm, and Engineer Nguyen Nam Trung – Director of NTT participated in the discussion regarding “Regulations governing progress and penalties for slow progress in FIDIC, NEC, ENAA and VOB” on June 16, 2020.

Contents

Here, speakers and lecturers from the Faculty of Economics and Construction Management discussed the content relative to the Extension of Time for Completion and penalties for slow progress in some construction contract forms (FIDIC, NEC, ENAA, VOB), worldwide.

Specifically, Lawyer Le The Hung presented many issues related to the Extension of Time for Completion and penalties for slow progress in some construction contract templates issued by the International Federation of Consulting Engineers (FIDIC) such as:

• The basis for the extension of the completion time;
  • Commencement and adjustment of the scope of work;
  • Unforeseeable physical conditions.;
  • Unforeseeable shortages in the availability of personnel or goods
  • Delays, prevention by the Investor, or another party to which the Investor is responsible for management;
  • Investor delays in issuing drawings and site directives;
  • Investor delays handing over the construction site;
  • Errors in landmark positioning and standard pitches;
  • Unforeseeable physical conditions;
  • Discovery of Fossils;
  • Testing delays;
  • Delays caused by authorities;
  • Investor Suspension of Work;
  • Investor intervention of test runs;
  • Contractor suspension of work by the Contractor;
  • Force majeure occurrences;
  • Contract termination for convenience.
• Delays and responsibilities of contractors;
• Significance of completion timelines;
• General Process, Common Timetable; 
• Notice and meaning of sending notice(s) of extension of completion time
• Explanation for claims extending the completion time.

The above content logically arranged by Lawyer Hung, is easy to understand and interspersed with systematic quick application exercises/situations that have received enthusiastic responses from teachers of the Faculty of Economics & Construction Management.

Lawyer Le The Hung presented at the professional event

Engineer Nguyen Nam Trung presented and introduced the regulations of countries relative to late progress penalties in the NEC/VOB/ENAA Contract.

Accordingly, for countries that follow the UK legal system (common law), the regulation on progress penalties is not recognized, instead these countries use the “predetermined compensation” institution – which is controversial in Vietnam.

Meanwhile, for countries under the actual legal system (civil law) such as France and Vietnam, when the contractor is late to perform the work under the construction contract, the contractor will be fined and compensated for damages according to the reality.

Engineer Nguyen Nam Trung presented at the professional event

Discussion Questions

At the meeting, many complex issues related to ” Extension of Time for Completion and penalties for slow progress ” were enthusiastically discussed:

• Which legal procedures are required in order to apply for an extension of the completion time?
• Why is the procedure for announcing the extension of completion time mandatory?
• Why, for countries under the common law system, is the “principle of compliance with the agreements of the parties” the ultimate principle?
• Does any notice of extension of completion have to be submitted with explanatory details?
• What issues does the Contractor need to pay particular attention to in order to provide a convincing account of an Extension of Time Claim?
• Issues to keep in mind during the review of construction contracts.

A few pictures of the meeting

 

Opportunities for cooperation and development

The parties believe that the aforementioned cooperation will be an important foundation for students and researchers to gain more practical experience on the application of construction contracts, the evaluation of requests for extension of completion time, as well as costs incurred.

At the same time, practical activities will have the opportunity to absorb principles and theories on construction, construction and construction management, thereby contributing toward the minimization of risks and disputes arising in practice.

More information

Materials for the meeting may be downloaded from the following links:

Quy định phạt chậm tiến độ trong một số Hợp đồng trên thế giới NEC/VOB/ENAA