Resolution of disputes by subcontractors through arbitration in FIDIC construction

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If there is any delay beyond the deadline, it may cause financial losses to the employer and hence, he may claim damages from the contractor for the losses suffered due to late completion of the construction project. To avoid this , most of the construction contract forms will include a provision for the parties to the contract to agree upon on monthly or weekly or on a daily basis for delay due to the contactor which is known as liquidated and ascertained damages .(LAD). The main objective of LADs is to notify the employer’s prerogative to claim damages for the infringement of a condition by a contractor to finish the work within the deadline1. Unprecedented scenarios are unavoidable element of every construction contract. … ld (D B) or an EPC (Engineering, Procurement and Construction) contract, which is a contractual arrangement thereby imposing the entire accountability for construction and design of the work on a contractor. The phrase turnkey refers that after the finishing up the work, the contractor is only hand over the key to the owner or the employer to start the operations of the constructed project2. Delays in construction contracts can be classified as excusable or non-excusable. Excusable delay means a delay which may justify an prolongation of performance of contract’s time and some examples of excusable delays are unpredictable weather, changes initiated by the employer, issues with the project designs, acts of god, delays in receiving equipments, which is supplied by the owner, varying or differing work-site conditions, delay due to awarding of contract and labour disputes. If the main contractor is eligible to claim time extension due to unpredictable weather conditions, subcontractor may be also eligible to claim time extension if the subcontract contains a flow down clause thereby obligating the conditions in the main contract which is automatically applicable to the subcontract also and as it includes an analogues excusable delay provisions3. Under the non-excusable delay, the contractor bears the risk of outcome and cost, not only for himself but also for the resulting effect on the others like subcontractors also. Due to mismanagement, a main contractor may encounter delays, which will also the delay the work done by the subcontractor. In such cases, the main contractor may be accountable to the subcontractors but not to the employer. The notion of non-excusable delay is employed chiefly as a shield to turn down the request for claims for