CNC successfully held Workshop on Claims Under FIDIC Contracts – CNC

On the morning of 10, August 2024, the Workshop with the topic of “Claims under FIDIC contracts – What Should FIDIC Users take notes of” by CNC Counsel was successfully held. The workshop has garnered the participation of many legal practitioners in the field of construction from law firms, as well as employers, engineers, and contractors.

Through the workshop, the speakers and participants engaged in in-depth discussions and shared their experiences from different perspectives on the drafting and management of claims under FIDIC contracts.

The topics presented at the Workshop include

Part 1: Claim procedures under FIDIC – New perspective from several cases around the world, presented by Mr. Tran Pham Hoang Tung – Senior Associate at CNC Counsel Law Firm

Part 2: Claim management from the perspective of contract parties, presented by Ms. Tong Thi Thu Thao – Head of the Department of Legal & Contract Management, FIDIC Certified Contract Manager (FCCM)

Part 3: Experience in managing extension of time (EOT) claims from an expert witness’s perspective, presented by Ms. Nguyen Thien Trang – Delay Analysis Manager at Secretariat (Singapore)

CNC successfully held Workshop on Claims under FIDIC Contracts

In Part 1, Mr. Tran Pham Hoang Tung gave his speech on the interpretation of and application of the claim procedures under FIDIC contracts, including both the 1999 version and 2017 version, and pointed out the differences between the two versions. Mr. Tung also gave examples of cases in the Court of Hong Kong, Singapore, England,… to inform participants of the approaches as well as issues that should be taken notes of regarding the application of Claim procedures.

According to Mr. Tung, major issues that FIDIC users shall take notes of are as follows:

Proactively filing Claims upon being aware of the issue instead of waiting for further developments.
Claims do not cause the relationship between parties to be worsened, in contrast, it is an effective means to manage the project and mitigate the possibility of disputes.
Notice of Claim shall be sent in accordance with the procedures and to the correct recipient.
Detailed Claims must be structured properly and attached with relevant submissions for the Engineer’s evaluation
To not be deemed as having waived one’s rights, at least one step (if FIDIC 1999 is applied) or two steps (if FIDIC 2017 is applied) of the Claim procedure must be taken
Under FIDIC 2017, Claim procedures for the Employer and Contractor are the same
For submission of Detailed Claims under FIDIC 2017, all the relevant legal bases should be included, omission of the foregoing would be ill-advised
For Contractors, failure to file Extension of Time Claims would not only result in waiver of rights but also the possibility of being subjected to Liquidated Damages

Mr. Tran Pham Hoang Tung – Senior Associate of CNC Counsel Law Firm

In part 2, Ms. Tong Thi Thu Thao shared her experiences in drafting and managing Claims from the perspective of Contractors. According to Ms. Thao, the negative view of Claims and thinking of Claims as something that would inconvenience parties is a common misbelief held by many. Inversely, Claims could help parties to protect their benefits, avoid potential conflict, and help managing the cost and schedule of the project.

From her own personal experience, Mrs. Thao also shares the common mistakes made by contracting parties:

Failure to comply with provisions on Claims under Contract (forms, procedures, recipients,…).
Failure to fully save and observe the relevant information to record the occurred/occurring events.
Lack of information on appropriate bases and evidence in the Claim
Neglection of entitlements to other claims (e.g. Claim for Time but not Cost)
Redundant provision of irrelevant information.

Finally, Mrs. Thao gave contracting parties some suggestions for the efficient application of Claims, including:

Appoint appropriate personnel to handle Claims;
Incorporate technology into the management of Claims.
Establish and maintain effective communication among parties in the project.
Consult with experts for legal advice whenever necessary

Ms. Tong Thi Thu Thao at Workshop on Claims under FIDIC Contracts

In part 3, Mrs. Tran Nguyen Thien Trang provided participants with practical information on delay analysis, which is essential for the drafting of Extension of Time Claims, including the two popular methods which are As-Planned (simulation of future delay) and As-Planned versus As-Built (analysis of occurred delay).

Mrs. Trang also introduced two popular documents that are widely used to analyze delay, namely, SCL Delay & Disruption Protocol (2017) and AACE Recommended Practice (2007). According to Mrs. Trang, some common issues encountered by parties during the application of EOT Claims are:

Failure to establish the critical path of the project.
Failure to prove the effect of the delay event on the critical path.
Failure to consider the Contractor’s delay events
Failure to show the Contractor’s effort to remedy and mitigate the delay.
Lack of supporting evidence.

Ms. Tran Nguyen Thien Trang – Delay Expert of Secretariat at Workshop on Claims under FIDIC Contracts

In the final part of the Workshop, speakers and participants openly discussed the forwarded questions and the different perspectives gained from personal experience and lessons. Through the Workshop, CNC hopes that construction practitioners in Vietnam could acquire useful information, thereby increasing their efficiency in management of contracts and Claims