baziloglinda@onvlaw.ro
alinabilan@onvlaw.ro
Conclusions
- Giving full effect to failure to notify should be analyzed taken in consideration all the circumstances of the case and the conduct of the parties.
- The conduct of the parties during a performance of a contract under the Romanian law has to be in a manner consistent with the requirements of good faith.
- The concept of the time bar is compatible with the Romanian law and may be accepted and upheld in principle but there are cases when the concept of good faith can help defeat the harsh consequences of clause 20.1
Consequences of failure to comply with the notice provision in the context of Romanian law
Sub-Clause 20.1 may be interpreted in a less formalist manner, taking into consideration the particular circumstances of the case and the good faith principle
The failure to send the notice as per sub clause 20.1. may not be efficient if
- the event was caused by a default of the Employer/Engineer
- the number of delay days in submitting the notice of claim are minor
- the Employer or the Engineer were aware of the events that caused the delay
- the lack of notice did not prejudice the Employer
- the time-bar would entitle the Employer to claim delay damages for his own delay
- previous correspondence or discussions between the parties regarding the notified events, even though the communication was not official or in accordance with provisions of Sub-Clause 20.1.
The notice of claim under Sub-Clause 20.1. in a FIDIC contract governed by the Romanian law
Procedural effects under Romanian law
The 28-day notice provision under Romanian law
- The loss of right to claim can be invoked by the Employer only in front of the first court, in the statement of defense or no later than the first hearing
- The jurisdictional body is under the legal obligation to analyze the time bar, even if the Employer does not raise this issue in his defense but only when the time bar is of public interest
- Neither the DAB nor the arbitration court can address the issue of the time bar if the Employer did not mention it in its defense as the time bar protects a right which the parties can freely dispose of
Procedural effects
- The loss of right to claim can be invoked by the Employer only in front of the first court, in the statement of defense or no later than the first hearing
- The jurisdictional body is under the legal obligation to analyze the time bar, even if the Employer does not raise this issue in his defense only when the time bar clause protects a public interest right
- In principle, neither the DAB nor the arbitration court can address the issue of the time bar if the Employer did not mention it in its defense as the time bar protects a right which the parties can freely dispose of (private interest)
- The Employer could raise the time bar issue for the first time before the arbitration court but the contractor can argue that the fact that the Employer did not mentioned this aspect before the DAB can be interpreted as an implicit renunciation to the benefit of the time bar
- Is a contractual time bar provision for exercising a substantial right of private interest (article 2545 from New civil code)
- Is not a limitation period
- The Employer can renounce to the benefit of the time bar clause, after the 28 day have lapsed
The renunciation can be:
- implicit - arising from an action/inaction of the Employer (in this case the Contractor has to prove that the renunciation results unequivocally from the Employer’s conduct)
- explicit - mentioned in a document issued by the Employer OR convened with the Contractor
Thank you
Validity conditions for the notice to claim
- Under Romanian law it is a unilateral act which must comply with the civil Romanian law regarding the contracts (the validity conditions regarding the object, capacity , valid consent, the rules of interpretation and the civil law principles governing the contracts)
- No particular form for the notice to claim (Clause 20.1)
- To be done in writing ( Sub–Clause 1.3. GC )
- Accepted format: e-mail, a mention in minutes of meeting, references made in the monthly Progress Report
- To be included in the Progress Reports (Sub–Clause 4.21 (f) - the report must list notices given)
- No need to state time or amount claimed or contractual basis of claim
- Must be recognizable as a “claim” (see Obrascon Huarte Lain SA v Her Majesty’s Attorney General for Gibraltar)
- A passing reference to an event/circumstance in correspondence is not sufficient in itself to be construed as a notice
Compatibility of the notice of claim as per Sub-Clause 20.1. with the Romanian law
Sub-Clause 20.1. of the FIDIC form of Contract
(YB, RB and GB)
- The freedom of contract is limited only by the law, the public order and good morals
- The parties must act in good faith when concluding and performing a contract
- Pacta sunt servanda
If the Contractor considers himself to be entitled to any extension of the Time for completion and/or any additional payment, under any Clause of these Conditions or otherwise in connection with the Contract, the contractor shall give notice to the Engineer, describing the event or circumstance giving rise to the claim. The notice shall be given as soon as practicable, and not later than 28 days after the Contractor became aware, or should become aware, of the event or circumstance.
If the Contractor fails to give notice of a claim within such period of 28 days, the time for Completion shall not be extended, the Contractor shall not be entitled to additional payment and the Employer shall be discharged from all liability in connection with the claim.
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