Managing FIDIC Claims in Construction Contracts: Notice and Time Limits under the 2017 Red Book

Why are claims lost before they are argued?

On construction projects many valid claims fail for procedural reasons: a notice not sent on time, or sent in the wrong form, or a fully detailed claim with no clear contractual basis. The 2017 edition of the Conditions of Contract for Construction (the Red Book) tightened these procedures compared with the 1999 edition and extended them to Employer claims as well. ^[2]

In November 2022 FIDIC published a set of amendments to the 2017 Second Edition, effective from 1 January 2023, as part of the 2022 reprint. ^[1] So first check which edition and reprint your contract refers to, and its Particular Conditions, because the periods in this article are those of the General Conditions.

What types of claim does Clause 20 cover?

Sub-Clause 20.1 divides claims into three types: Employer claims for additional payment, a reduction in the Contract Price or an extension of the Defects Notification Period; Contractor claims for additional payment or an extension of time; and claims by either Party for any other entitlement or relief. ^[2] The first two follow the Sub-Clause 20.2 procedure with its strict time limits. The third starts when the other Party or the Engineer disagrees, and is then referred under Sub-Clause 3.7 as soon as practicable. ^[2]

The 2022 reprint amended the definition of “Dispute” and the wording of Sub-Clause 3.7 to separate matters the Engineer agrees or determines from Claims. ^[1]

Notice of Claim: the 28-day limit

The claiming Party must give a Notice of Claim to the Engineer as soon as practicable, and no later than 28 days after it became aware, or should have become aware, of the event or circumstance. If it does not, the other Party is discharged from any liability in connection with that event. ^[2]

It is not enough that the other Party knew about the event. Under the 2017 edition a Notice must be in writing, signed by the authorised representative, identified as a Notice, delivered to the address in the Contract Data, and must describe the event or circumstance giving rise to the claim. The contract states that nothing in a progress report or programme constitutes a Notice. ^[3]

If the Engineer considers the notice late, it must give a reasoned notice to that effect within 14 days of receiving it; otherwise the Notice of Claim is deemed valid, although the other Party may still disagree. ^[2]

How do you prepare your team for notices?

• List every time limit from day one: extract every period and condition precedent from the General and Particular Conditions into a single table when the contract is signed.
• Ready-made templates: prepare a notice template stating who signs it, who receives it, and by what method and to which address.
• Cite the clause: quote the contract clause you rely on as closely as possible, because a notice must be clear and unambiguous.
• No oral understandings: do not rely on informal agreements not to serve notices for the sake of the relationship. ^[3]

Contemporary records: what to keep, starting now

Sub-Clause 20.2.3 requires the claiming Party to keep the contemporary records needed to substantiate the Claim, and the 2017 edition defines these as records made at the time of the event or immediately after it. The Engineer may monitor and inspect them and instruct additional records, without accepting their accuracy or completeness. ^[2]

In practice, start the record on the day of the event: dated photographs, the labour and plant idle or affected, site correspondence and the Engineer’s instructions. A record rebuilt months later to prepare a claim carries far less weight.

Fully detailed Claim: 84 days and the legal basis

The fully detailed Claim is due within 84 days of becoming aware of the event, or within another period proposed by the claiming Party and agreed by the Engineer; the 1999 period was 42 days. It has four elements: a detailed description of the event, a statement of the contractual and/or other legal basis of the Claim, all contemporary records relied on, and detailed supporting particulars of the amount or extension claimed. ^[2]

The second element is the dangerous one: if the statement of the contractual or legal basis is not submitted in time, the Notice of Claim itself lapses. The Engineer must give notice of this within 14 days after the deadline; otherwise the Notice is deemed valid. ^[2] The figures can be completed later; lapse is tied to the missing basis, not to an incomplete calculation.

Claims with continuing effect

Where the event’s effects continue, the fully detailed Claim is treated as interim, followed by monthly updates, and a final fully detailed Claim within 28 days after the effects end. The Engineer responds on the contractual or legal basis within 42 days of the interim Claim. ^[2]

Hypothetical example: working the dates on a calendar

A contractor discovers unforeseeable ground conditions on 3 March that delay excavation:

The lesson: do not wait for the last day. Sending the notice early leaves a margin for any argument about the date of awareness, and the periods run from awareness of the event, not from the date the notice is sent.

From the Engineer’s determination to the DAAB

After the fully detailed Claim, the Engineer consults the Parties to seek agreement within 42 days; if no agreement is reached, it makes a fair determination within a further 42 days. If no determination is issued in time, the Claim is deemed rejected. A Party dissatisfied with the determination gives a Notice of Dissatisfaction within 28 days; otherwise the determination becomes final and binding. ^[4]

After a Notice of Dissatisfaction, the Dispute must be referred to the Dispute Avoidance/Adjudication Board (DAAB) within 42 days, and the DAAB gives a reasoned decision within 84 days of referral. A Party dissatisfied with the DAAB’s decision gives a Notice of Dissatisfaction within 28 days, and arbitration may begin if no amicable settlement is reached within 28 days. ^[5] Under the 2022 reprint, certain situations are deemed Disputes that go straight to the DAAB without a Notice of Dissatisfaction, including financing charges left unpaid 28 days after they are requested and a disputed notice of termination. ^[1]

Are time bars enforced as written in the Gulf?

Not necessarily. In the UAE the analysis starts from the principle that the contract binds the parties and clear wording may not be departed from by interpretation, but principles of UAE and Qatari civil law may be used to challenge literal enforcement, including the prohibition on unlawful exercise of rights, unjust enrichment, good faith and the court’s power to adjust compensation. Statutory limitation periods are also treated as public policy in both countries. ^[6] The 2017 edition itself lets the Engineer, when deciding whether a late notice is valid, consider factors including prejudice to the other Party and its prior knowledge of the event. ^[2]

But these are defensive arguments after a mistake, not a claims management plan. Laws differ across the GCC, so take advice under the law governing your contract.

Conclusion

Under FIDIC 2017 a claim is won on procedure before argument. List every time limit and condition precedent in your contract from day one, prepare notice templates in advance, keep records at the time of the event, and never submit a fully detailed Claim without an explicit statement of its contractual or legal basis.