Cl report final

TCVAN Management and Consultation Sdn. Bhd. Project NO: A8888
Tel: 60-312345678 Email: tcvan@gmail.com 22nd
November 2017
CONTENT
 INTRODUCTION
 ANALYSIS BASED ON FIDIC RED BOOK 1999
 ANALYSIS BASED ON PAM CONTRACT 2006
 APPENDIX
 REFERENCES

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1.0 INTRODUCTION
The analysis report is done to delivery our professional advices to our client, Smart Builder
Construction Sdn. Bhd. based on FIDIC Red Book 1999 and PAM Contract 2006.
The report outlines a list of important issues and disputes arose in the awarded contract. It goes
without saying that professional advices are suggested to our client who faced some problems
in the post contract stage. Moreover, a separate analysis section compliance with FIDIC Red
Book 1999 and PAM Contract 2006 is prepared.
Important Issues and Assumptions:
 The project duration as agreed to be 24 months but the Works on site was delayed for 4
weeks on account of the delay in handling over the site to the client by the Employer.
 The project ran into great difficulties after the 13th month. Issues arose comprised of 3
non-payment by the Employer and work behind schedule. The agreed payments not
made were Interim Certificate No. 13, Certificate No. 14 and Certificate No. 15 due to
financial obstacles and led to delay in Works progress. Besides, workmen were pulled
of side, late project administrator’s and work behind schedule contributed to the
project’s delay.
 There was conflict in determining the client’s main responsibilities especially in terms
of client’s design portion and the rules underpinning subcontracting. As stated in the
works information, the contractor will oblige some design works. Nevertheless, there
was changes in design after the project is embarked and this directly incurred extra cost
and delay in time.
 Disputes also arose due to misunderstanding on testing and defects in terms of
inspection, rectification and uncorrected defects. The Employer suspect that the
constructed roof garden is not compliance with the performance specification.

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By and large, advices are made based on the areas stated as below:-
 The general principle governing main contractor’s responsibilities
 Conditions guiding payment
 Contractual standing in terms of conditions governing contractual programme
 The principles guiding testing and defects in construction contracts
 Dispute resolution methods that can be used to resolve the problem

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2.0 ANALYSIS BASED ON FIDIC RED BOOK 1999
2.1 General principle governing main contractor’s responsibilities
Based on FIDIC Red Book 1999, the client is advised to comply with the general principle
governing client’s obligations as a main contractor of the specific contract, which are stated and
further elaborated in below.
As a designer contractor, you should take note of few responsibilities and duties that had been
clearly stated under Sub-Clause 4.1 which are:-
1. You shall design to the extent specified in the Contract, execute and complete the Works
in accordance with the Contract and with the Engineer’s instructions, and shall remedy
any defects in the Works.
2. You shall submit to the Engineer the Documents of your design part of any Permanent
Works in accordance with the procedures specified in the Contract. Documents shall
include the specification and drawings, shall be written in the language for
communications defined in Sub-Clause 1.4 and additional information required by the
Engineer to add to the Drawings for coordination of each party’s designs.
3. Also, you shall ensure that the completed Works are fit for such purposes as specified
in the Contract.
4. Prior to the commencement of the Tests on Completion, you shall submit to the
Engineer the “as-built” documents and operation and maintenance manuals in
accordance with the Specification and in sufficient detail for the Employer to operate,
maintain, dismantle, reassemble, adjust and repair this part of the Works.
You shall obtain a Performance Security as stated under Sub-Clause 4.2. You shall deliver the
Performance Security to the Employer within 28 days after receiving the Letter of Acceptance
and shall send a copy to the Engineer.
According to Sub-Clause 8.1, you shall commence the execution of the Works as soon as is
reasonably practicable after the Commencement Date and shall then proceed with the Works

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with due expedition and without delay. Besides, you shall complete the whole of the Works
within the Time for Completion for the Works comprising of achieving the passing of the Tests
on Completion and completing all work that is stated in the Contact and others as stated and
listed in Sub-Clause 8.2. You shall note that you should not vitiate any terms stated in Sub-
Clause 15.2 as in you have not carried out the works by having adequate labour on site to
execute Works and abandon Works or else the Employer can terminate your employment under
Sub-Clause 15.2.
Moreover, you shall carry out the variations if there is any instruction from the Employer to
change the design of completed works. The reason if this instruction is constituted as a variation
order under Sub-Clause 13.1. It is also clearly stated in that you shall comply with any
Variations issued by the Engineer under Sub-Clause 13.1. If you have opined that you cannot
comply with the relevant issued variation order, you shall submit a written respond to the
Engineer on the description of the proposed work to be performed and a programme for its
execution as stated in Sub-Clause 13.3. However, if additional expenses is incurred by the
issued variations, you have right to claim for additional expenses through the payment of any
such Cost plus reasonable profit which shall be included in the Contract Price. Correct
procedures shall be taken in order to claim and they are stated in Sub-Clause 20.1. Then, you
have right to apply for extension of time under Sub-Clause 8.4. The claiming of additional
incurred cost and extension of time are clearly indicated in Sub-Clause 1.9.

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2.2 Conditions Guiding Payment
There are two platforms where you as a Contractor can seek for the non-payment.
a) Contractual claim
b) Statutory adjudication
a) Contractual Claim
The procedural conditions for interim payment in FIDIC Red Book are:
Assuming that Contractor follow all the procedural requirements according to the sub-clauses
stated above. The remedies available for the Contractor to deal with the delay payment are
financial charges (sub-clause 14.8), suspend work (sub-clause 16.1) or termination (sub-clause
16.2(c)).
Referring to FIDIC Red Book 1999, sub-clause 14.8, the Contractor shall charge the Employer
interest stated in the particulars conditions without the need of formal notice or certification.
The interest rate shall be considered at the yearly rate of 3% plus the base lending rate of Bank
Negara Malaysia if not stated inside the Contract. In the renowned case of F G Minter Ltd v

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Welsh Health Technical Services Organisation (1980) where the court construed that where a
claim is for a debt incurred by a construction contractor to raise the necessary capital which has
interest charges as one of its constituents, the loss suffered as a result of the late payment of
money was recoverable, thus Contractor are definitely entitled to claim interest for the due
amount delay by the Employer.
Furthermore, Contractor’s act of discharging workmen off site is not wrong according to FIDIC
Red Book 1999, sub-clause 16.1. However, Contractor must give notice to the Employer
regarding the intention to reduce the rate of work not less than 21 days before discharging
workmen off site. If the Employer by any chance decided to pay such Payment Certificate
before notice of termination is given, the Contractor shall resume the work immediately.
Termination of the contract is the last resort if non-payment persist. Based on FIDIC Red Book
1999, sub-clause 16.2 (c), the Contractor may terminate the contract upon 14 days after the
notice of termination is given to the Employer.
b) Statutory Adjudication
In my opinion, I would recommend that the Contractor seek payment through statutory
adjudication under Construction Industry Payment and Adjudication Act 2012 (CIPAA). Since
CIPAA came into effect 15 April 2014, there are many successful claims by the Contractor
regarding non-payment by the Employer. The benefits of adopting adjudication under CIPAA
are:
i. It is a mandatory and statutory process that does not require the agreement of the parties
to commence the process.
ii. It stipulates the procedural and other requirements relating to the conduct of the
adjudications falling within its ambit.
iii. It offers a much faster process compared to arbitration and court litigation because the
timeframe is as prescribed by the Act itself. It is the only form of dispute resolution that
has a statutory time period in which the dispute must be resolved in forty-five (45)
working days from the receipt of the adjudication reply or response.

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iv. It provides an interim binding decision on a payment dispute.
v. The parties can choose their own adjudicator or request for the Director of the KLRCA
to choose an adjudicator on their behalf.
Item Section Requirements Time Limit
1 Payment
Claim
5 To state:
a. amount claimed and due date
b. cause of action and provision in
contract relied on
c. description of work or services to
which payment relates
d. that is made under the Act
None
2 Payment
Responds
6 a. May admit or dispute partly or
wholly
b. Attach payment of amount admitted
c. On a failure to respond it is deemed
that the entire claim is disputed
10 working days
from receipt of
Payment Claim
3 Notice of
Adjudication
7(2)
and 8
To state nature and description of
dispute and remedy sought together
with supporting documents
To be served on
respondent after
expiry of time
limited for
Payment
Response
4 Adjudication
Claim
9 To state nature and description of
dispute and remedy sought together
with supporting documents
10 working days
from receipt of
acceptance of
appointment by
adjudicator

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5 Adjudication
Response
10 To answer the Adjudication Claim and
include any supporting documents. If
not filed, claimant may proceed with
the adjudication after the time limited
to do so
10 working days
from receipt
Adjudication
Claim
6 Adjudication
Reply
11 To reply to Adjudication Response
and include any supporting document
5 working days
from receipt of
Adjudication
Response

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2.3 Contractual Standing Governing Contractual Programme
First and foremost, you are advised to claim for Extension of Time under Sub-Clause 20.1
(Contractor’s Claims) and Sub-Clause 8.4 (Extension of Time for Completion) of FIDIC
Contract 1999 since there was a delay in giving site possession by the Employer to you.
However, in order to claim for EOT, you are required to give a notice to the Engineer,
describing the event or circumstance giving rise to the claim. The notice shall be given to the
Engineer not later than 28 days after the event or circumstance that causes delay arises as
according to Sub-Clause 20.1 of FIDIC Contract 1999, if the Contractor fails to give a notice
of a claim to the Engineer within such period of 28 days, then the Time for Completion shall
not be extended.
On the other hand, regarding the issue of work behind schedule, you are advised to subject to
Sub-Clause 8.3 (Programme) of FIDIC Contract 1999, submit a revised programme to the
Engineer. The revised programme shall include the followings:
a) The order in which the Contractor intends to carry out the Works, including anticipated
timing of each stage of design, Contractor’s Documents, procurement, manufacture of
Plant, delivery to Site, construction, erection and testing.
b) Each of these stages for work by each nominated Subcontractor.
c) The sequence and timing of inspections and tests specified in the Contract.
d) A supporting report which includes:
i) A general description of the methods which the Contractor intends to adopt,
and of the major stages, in the execution of the Works.
ii) Details showing the Contractor’s reasonable estimate of the number of each
class of Contractor’s Personnel and of each type of Contractor’s Equipment,
required on the Site for each major stage.

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Unless notified by the Engineer, you shall subject to Sub-Clause 8.6 (Rate of Progress) of
FIDIC Contract 1999, adopt the revised methods stated in the revised programme, which may
require increases in the working hours and/or in the numbers of Contractor’s Personnel and/or
Goods, at your own risk and cost. If these revised methods cause the Employer to incur
additional costs, then you shall subject to Sub-Clause 2.5 (Employer’s Claims) of FIDIC
Contract 1999 pay these costs to the Employer.
Apart from submitting revised programme, you shall as well subject to Sub-Clause 8.3 of
FIDIC Contract 1999, promptly give notice to the Engineer of specific probable future events
or circumstances which may adversely affect the work, increase the Contract Price or delay the
execution of the Works.

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2.4 Principles of guiding testing and defects
Obligation to test
Figure 4.1 Timeline of Test on Completion
According to clause 9.1, during Test on Completion, it is contractor must test the completed
works according to clause 7.4. The contractor will come to term with the engineer in regards of
the time and venue of the testing of plant, works or material.
The contractor provides the engineer within 21 days’ notice of the date when the contractor is
ready to carry out the Test on Completion. The contractor is limited to only 14 days to perform
the tests on completion.

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Remedies to delayed Tests
In Clause 9.2, presumably that contractor has made his delay for Test on Completion
unjustifiably, he will be notified by the engineer to carry out the test within 21 days upon
receiving the notice.
Failure to perform the Test on Completion within 21 days, the Employer’s employees will
proceed with the test at the risk and cost of the contractor. Such test will be deemed to be carried
out in presence of the contractor and result is accepted to be accurate.
Failed or additional Test on Completion
Works found flawed will be rejected under clause 7.5. The engineer or the contractor may need
to repeat, under same conditions, the tests. Should the result of test proven unsuccessful despite
repetition, the engineer have rights to either; order further repetition of the tests, issue a Taking-
Over certificate should the employer desires or reject the works in which employer will have
the remedies similarly provided in clause 11.4 c if the failure robs the employer of his benefit.
This is according to Clause 9.3.
Should there be, under clause 11.6, influence on the performance of work upon remedy of
defected works; the engineer is obliged to perform repetition of Test described in the Contract.
Defects liable
Under Clause 11.1, Contractor will be notified by the Employer on the appearances of defects
during Defects Notification Period. The contractor shall either complete unresolved work on
the date mentioned in the Taking-Over Certificate within time reasonable.
Cost and Time of Remedy
In clause 11.2, Remedy executed shall be contractor’s risk and cost if work is, at any design,
which the contractor is held responsible that are in conflict to the contract, failure to fulfil other
obligation.

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Whereas in clause 11.3; when works cannot function as they should due to defects, Employer
holds the rights to extend the Defects Notification Period. If contractor fail to remedy the defect
within speculated time, may fix the date by the employer to which the defects can be remedied.
The contractor, on the other side, must provide reasonable notice of this date.
Failure to correct defects
Aforementioned in clause 11.4, when contractor failed to remedy the work, the employer may
either carry out the work himself or by others at the contractor’s cost in a reasonable method.
The contractor will have no responsibility for this work, have the Engineer to agree for a
reasonable reduction in the contract price or, when works is deprived of benefits, terminate the
contract as a whole.
Advice
Perchance the contractor should maintain his responsibility, along with the engineer to guide
the client the procedure of testing and remedy the defects. It is important for the contractor to
work closer with the employer’s employees in every step so to ensure there are no delays in
testing and remedying the defects.

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2.5 Dispute Resolution Method
Dispute Adjudication Board (DAB) is an adjudication process which deal with job dispute on
site. As stated in Sub-Clauses 20.2, the DAB shall comprise either one or three suitably
qualified persons as stated in the Appendix to Tender. For one-person DAB the qualified
persons must be mutually agreed by each party; for three-person DAB each party may propose
one member, the third member must be agreed by each party and shall be appointed to act as
chairman. If the parties fail to agree with the appointment, as stated in Sub-Clauses 20.3, Each
Party shall be responsible for paying one-half of the remuneration of the appointing entity or
official. Generally adjudication is suitable for claim and solving dispute which involved cost,
time and/or workmanship. The advantage of using this method is that it consume less time and
cost as compare to arbitration or litigation
Normally, if there is no Notice of Dissatisfaction (NOD) given by either Party within the 28
days after received the DAB’s decision, the decision shall become final and binding upon both
parties as stated in Sub-Clauses 20.4. If NOD is served within the 28 days; Sub-Clauses 20.5
stated that, both Parties shall attempt to settle the dispute amicably before the commencement
of arbitration: for example, by conciliation, direct negotiation or other forms of alternative
dispute resolution. According to Sub-Clauses 20.7, if either party failure to comply with DAB’s
decision without giving NOD within the stated period, other Party may, without prejudice to
any other right it may have, refer the failure itself to arbitration under Sub-Clauses 20.6.
Arbitration
Arbitration is one of the alternative dispute resolution (ADR) to provide an alternative to filing
a lawsuit and going to court. (FindLaw.com, 2017). FIDIC Red Book 1999 Sub-Clauses 20.5
strongly advise that both Parties shall attempt to settle the dispute amicably before the
commencement of arbitration. Sub-Clauses 20.6 stated, unless settle amicably, any dispute in
respect of which DAB’s decision has not become final and binding shall be finally settled by
international arbitration. The arbitrators shall have full power to open up, review and revise any

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certificate, determination, instruction, opinion or valuation of the Engineer, and any decision of
DAB, relevant to the dispute. Neither Party shall be limited in the proceedings before the
arbitrators to the evidence nor did arguments previously put before the DAB to obtain its
decision, or to the reasons for dissatisfaction given in its notice of dissatisfaction. Any decision
of the DAB shall be admissible in evidence in the arbitration.
Advice
Based on the FIDIC Red Book 1999, the most advisable approach to resolve the dispute is to
go for DAB and avoid going to arbitration. DAB is often being used to resolve dispute regarding
payment and it consume lesser time and cost as compare to arbitration. It is the most suitable
resolution method for current situation as the project is still in construction stage; it is advisable
to choose the fastest route to resolve the dispute as soon as possible in order to continue the
construction work. The contractor can still appeal to the arbitration if he is dissatisfy with the
DAB’s decision by serving the notice of dissatisfaction within the 28 days after decision is
made. Furthermore, it can ease the cash-flow difficulties that had plague on the contractor as
the due payments can be enforced without waiting for arbitration award because of the quick
turnaround time in the adjudication process.

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3.0 ANALYSIS BASED ON PAM CONTRACT 2006
Based on PAM Contract 2006, the client is advised to comply with the general principle
governing client’s obligations as a main contractor of the specific contract, which are stated and
further elaborated in below.
Under Clause 1.1, the client shall carry out and complete the Works in accordance with the
Contact Documents as stated. Thus, you are advised to ensure that there is adequate workmen
to work on site in order to work regularly and diligently according to Works Programme to
avoid any further delay. As indicated in PAM 2006, you are required to proceed regularly and
diligently with the Works under Clause 25.1(c). The Employer has the right to terminate your
employment according to Clause 25.1(a) if you fail to comply and execute the agreed works in
accordance with the contract.
Also, you shall execute the Works regularly and diligently on the exact agreed date of
commencement provided that you have taken over the site under Clause 21.1. According to
Clause 21.1, you will be granted an extension of time under 23.8(f) in the event there is a delay
by the employer in giving possession of the Site to you. Thus, you have right to seek the
permission to obtain extension of time from the Client. However, you should completed the
agreed Works on or before the Completion Date.
Regarding to the design portion issue, you shall ensure that the proposed alternative design of
yours are fit for its purpose under Clause 1.3. For instance, you had designed a green roof in
order to satisfy the performance specification. Nevertheless, you will be deemed that you had
failed to meet the performance specification if the result of the test on the completed rood
garden is negative. Simply, this had indicated that the roof garden is not “fit for its purpose”.
Besides, as stated under Clause 1.3, you shall not relieve your responsibilities under the contract

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upon the acceptance by the Architect or Consultant of your design. This is further illustrated
under the Clause 1.2, you shall be fully responsible for the adequacy, stability and safety of all
temporary works and of all methods of construction of the Works, irrespective of any approval
by the Architect or Consultant. Thus, you should ensure that the constructed rood garden and
other design Works of yours are complied with the given clauses.
Moreover, you shall carry out the variations if there is any instruction from the Employer to
change the design of completed works. The reason if this instruction is valid as a variation order
under Clause 11.1(a). It is also clearly stated in PAM 2006 that you shall comply with any
Architect’s Instructions issued by the Architect and to carry out the AI under Clause 2.1. Briefly,
you are not advised to seek for determination of your employment as stated in Clause 11.2,
there is no variation order issued by the Architect shall vitiated the Contract. However, if
additional expenses is incurred by the issued variations, you have right to claim for additional
expenses. Correct procedures shall be taken in order to claim and they are stated in Clause 11.7.
Then, you have right to apply for extension of time under Clause 23.8(g).
Lastly, as stated in Clause 1.4, you shall give a notice to the Architect in written form within
sufficient time before the commencement of construction of the affected works, specifying the
discrepancy or divergence to enable Architect to issue written instructions within a period
which would not materially delay the progress of the affected works, having regard to the
Completion Date. Bear in mind this is for works which have not been materially affected due
to discrepancy between designs. Also, any discrepancy or divergence shall not vitiated the
contract as indicated in Clause 1.4.

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There is a little difference between PAM Contract 2006 and FIDIC Red Book 1999. The
procedural conditions for interim payment in PAM Contract 2006 are:
Assuming that Contractor follow all the procedural requirements according to the sub-clauses
stated above. The remedies available is quite similar to FIDIC Red Book 1999 where Contractor
can claim interest on the unpaid amount (clause 30.17); Contractor can suspend execution of
the works until such time payment is made (clause 30.7); or Contractor may terminate his own
employment if non-payment persists (clause 26.1(a)).
In PAM Contract 2006, the rights to suspend execution of the works, in this case, discharging
workmen off site is allowed if the following three conditions are met:
i) The Employer fails or neglects to pay the certified amount to the Contractor within the
Period of Honouring Certificates stated in Clause 30.1;

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ii) The Contractor issues a notice of default of the same to the Employer; and
iii) The Employer continues the default for 14 Days after receipt of the default notice from
the contractor.
Nonetheless, my recommendation to the Contractor is to seek payment through CIPAA. This
is because referring to CIPAA, section 2, regardless of what construction contract being used,
if it is a written contract and the construction work is carried out in Malaysia, then CIPAA is
applicable.

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Based on PAM Contract 2006, you may subject to Clause 23.8(f), claim for Extension Of Time
under Clause 23.0 (Extension Of Time) since there was a delay in giving site possession by the
Employer to you. According to Clause 23.1(a) and Clause 23.1(b), you shall give written notice
to the Architect your intention to claim for such EOT with an initial estimate of the EOT
required supported with all particulars of the cause of delay. Such notice must be given within
28 days from the date of the commencement of the delay and you shall within another 28 days
of the end of the cause of delay, submit your final claim for EOT supported with all particulars
to the Architect.
Regarding the issue of work behind schedule, you shall subject to Clause 3.5 (Work Programme)
of PAM Contract 2006, submit a revised Works Programme to the Architect. You shall without
any charge to the Employer, provide the Architect from time to time with similar number of
copies of any revised Works Programme.

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Testing
In clause 6.3, Contractor must provide necessary samples of material and goods for testing
before integration into the works. Architect Instruction may be issued to open up covered up
works for inspection. Cost of such opening are to be added in the contract sum unless the costs
are given in the contract bills, tests shows that work is not according to contract or was required
due to breach of contract by the contractor.
Works conflicting Contract
Under Clause 6.5, When work was found conflicting to the contract, contractor will be
instructed by the architect in writing to;
1. Remove from and not to bring to the site said material and goods
2. Demolish and reconstruct work to comply with the Contract
3. Rectify work instructed by Architect with no alteration to the sum in the Contract
4. Within seven days from receipt of written instruction proposing method of rectification.
5. Upon consent of employer to leave works, material, goods or workmanship in the Works
to an appropriate set-off by the Employer.
Compliance to the written instruction will not entitle contractor to compensation for loss and
expenses or extension of time.
Defects
According to clause 15.4, Fourteen days after defects liability period the contractor will receive
schedule of defects from the Architect. The contractor shall then make good the defects
specified within 28 days after the receipt of the schedule of defects. At any time during Defects
Liability Period, however, the architect may issue AI requiring urgent rectification within
practical time at Contractor’s cost.

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Should the contractor fail to attend to the defects, the employer may employ another person to
rectify said defects with cost incurred be set-off. If the contractor was instructed to leave the
defects, the contractor will suffer set-off by the employer for defects not made good.
When completed, the contractor will be awarded with Certificate of Making Good Defects
according to clause 15.6a. In contrast, if the architect finds the defect is not made good, the
architect will write a notice to the Contractor stating reasons of non-issuance of the certificate
following clause 15.6b.
3.5 Dispute Resolution Methods
Adjudication
Adjudication is a simpler and more efficient method for settling the arise disputes. As stated in
Clause 34.2, where a party requires a dispute to be referred to adjudication, such disputes or
differences shall be referred to an adjudicator to be agreed between the parties. If both parties
fail to agree on the appointment of adjudicator within the 21 days from the date of the written
notice to concur on the appointment of the adjudicator, the party initiating the adjudication shall
apply to the President of PAM to appoint an adjudicator. The advantage of using this method
is that it consume less time and cost as compare to arbitration or litigation. The adjudicator's
decision shall be final and binding if the adjudicator's decision is not referred to arbitration
within six weeks from the date of the adjudicator's decision.
Arbitration
Arbitration is one of the alternative dispute resolutions (ADR) to provide an alternative to filing
a lawsuit and going to court. (FindLaw, 2017). Clauses 34.5 stated that, in the event that any
dispute or difference arises between the Employer and Contractor, either during the progress or
after completion or abandonment of works regarding matter with in Sub-Clauses 33.5(a)~(e)
then such disputes shall be referred to arbitration. If both parties fail to agree on the appointment
of arbitrator within the 21 days from the date of the written notice to concur on the appointment

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of the arbitrator, the party initiating the arbitration shall apply to the President of PAM to
appoint an arbitrator. The appointed arbitrator shall initiate the arbitration proceeding in
accordance to the Arbitration Act and Rules as stated in Clauses 34.7. As stated in Clauses
34.11 the award of such arbitrator shall be final and binding on the parties.
Mediation
Mediation is an alternative dispute resolution available, it is essentially a negotiation facilitated
by a mediator. Unlike arbitration and adjudication, mediation doesn’t involve decision making.
In mediation, the mediator work with the disputing parties to resolve their dispute by facilitates
the resolution of the parties’ dispute and helps the parties’ finds common ground and deal with
unrealistic expectation to reach the final settlement. As stated in Clauses 35.1, notwithstanding
Clause 34.0 of these conditions, upon the written agreement of both parties may refer any
dispute to the mediation. Clauses 35.2 stated that, prior reference of the dispute to mediation
under Clause 35.1 shall not be a condition precedent for its reference to adjudication or
arbitration by either party.
Advice
Base on the PAM Contract 2006, the most advisable approach to resolve the dispute is to go for
adjudication. The advantage of adjudication over arbitration is that it is relatively quicker in
process and much simpler and the cost is relatively cheaper. It is the most suitable resolution
method for current situation as the project is still in construction stage; it is advisable to choose
the fastest route to resolve the dispute as soon as possible in order to continue the construction
work. Clauses 34.4 stated that, contractor can appeal to the arbitration if he is dissatisfy with
the adjudicator’s decision by serving a written notice to the other party to refer the dispute
which was subject of the adjudication to arbitration within six weeks from the date of the
adjudicator’s decision. Furthermore, it advisable to the Contractor to refer the adjudication
based on adjudication rules under CIPAA 2012 to seek for compensation as it has higher level

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of enforcement and jurisdiction over Contractual Adjudication and it is relatively a better option
for dealing with dispute regarding payments.

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4.0 APPENDIX
FIDIC PAM
Contractor's design to the extent
specified in the Contract, execute
and complete the Works in
accordance with the Contract and
with the Engineer’s instructions,
and shall remedy any defects in the
Works.
Sub-
Clause
4.1
Contactor is required to proceed
regularly and diligently with the
Works under
Clause
25.1(c)
Contractor shall ensure that the
completed Works are fit for such
purposes as specified in the
Contract.
Sub-
Clause
4.1
The proposed alternative design
of contractor are fit for its
purpose
Clause
1.3
Commencement of the Works as
soon as is reasonably practicable
after the Commencement Date
Sub-
Clause
8.1
Contractor shall execute the
Works regularly and diligently on
the exact agreed date of
commencement once he has
possessed the site.
Clause
21.1
Termination by Employer Sub-
Clause
15.2
Termination by Employer Clause
25.1
Contractor to carry out the
variations issued by Engineer if
there is any instruction from the
Employer to change the design of
completed works
Sub-
Clause
13.1
Contractor to carry out the
variations issued by Architect if
there is any instruction from the
Employer to change the design of
completed works
Clause
11.1(a)
Extension of Time granted if
contactor suffers delay
Sub-
Clause
1.9
Extension of Time granted if
contactor suffers delay
Clause
23.8
Granted payment of any such Cost
plus reasonable profit if additional
cost is incurred
Sub-
Clause
1.9
Claiming for additional expenses
is incurred by the issued
variations
Clause
11.7
Procedures to claim for extra cost
incurred
Sub-
Clause
20.1
Procedures to claim for extra cost
incurred
Clause
11.7

November 2017
FIDIC PAM
The Engineer shall issue
an Interim Payment
Certificate within 28
days from the date of the
Contractor’s application
Sub-clause 14.3 The Architect shall issue
an Interim Certificate to
the Employer with a
copy of to the
Contractor within 21
days from the date of
receipt of the
Contractor’s
application.
Clause 30.1
Employer shall make
payment within 56 days
after issuance of Interim
Payment Certificate.
Sub-clause 14.7 The Employer shall
honour the interim
payment within the
Period of Honouring
Certificates stated in
Appendix of the
contract if none stated is
21 days from the date of
the Certificate.
Clause 30.1
Contractor must give
notice to the Employer
regarding the intention
to suspend work/reduce
the rate of work not less
than 21 days before
reduce the work.
Sub-clause 16.1 Contractor must give
notice to the Employer
regarding the intention
to suspend work/reduce
the rate of work not less
than 14 days before
reduce the work.
Clause 30.7
Entitlement to interest
on outstanding amount.
Sub-clause 14.8 Entitlement to interest
on outstanding amount.
Clause 30.17
Contractor’s right to
suspend work on non-
payment.
Sub-clause 16.1 Contractor’s right to
suspend work on non-
payment.
Clause 30.7
determine his own
employment on non-
payment.
Sub-clause 16.2
(c)
determine his own
employment on non-
payment.
Clause 26.1 (a)

November 2017
FIDIC PAM
‘Engineer’ acts as
superintending officer.
Sub-
clause 3.3
‘Architect’ acts as
superintending officer.
Clause 2.0
Detailed Time Programme is
submitted by the Contractor to
the Engineer.
Sub-
clause 8.3
Works Programme is submitted
by the Contractor to the
Architect.
Clause 3.5
Detailed Time Programme shall
be submitted within 28 days
after the Contractor receives the
notice of the Commencement
Date of Works from the
Engineer.
Sub-
clause 8.3
Works Programme shall be
submitted within 21 days from
receipt of the Letter of Award
(or within such longer period as
may be agreed in writing by the
Architect).
Clause 3.5
Not clearly stated - Six copies of the Works
Programme (unless a higher
number is stated in the Contract
Documents) shall be submitted.
Clause 3.5
If, at any time, the Engineer
gives notice to the Contractor
that a Programme fails to
comply with the Contract or is
inconsistent with the actual
progress and the Contractor’s
obligations, then the Contractor
shall submit a Revised
Programme to the Engineer.
Sub-
clause 8.3
If the Works or any part of the
Works is delayed for whatever
reason, then the Architect may
instruct the Contractor to
submit a revised Works
Programme.
Clause 3.5
Not clearly stated - The Works Programme shall
not constitute part of the
Contract.
Clause 3.6

November 2017
FIDIC PAM
Employer is opt to execute the
work himself or by others in a
rational methodology and at
contractor’s cost. Contractor
are subject to pay employer the
cost incurred in remedying
defect
Sub-
Clause
11.4a
Failure to attend the defects,
employer can opt to employ
another Person to rectify the
defects. Cost incurred will be set
off by the employer as per Clause
30.4 PAM contract
Clause
15.4
Contractor must submit
engineer as built documents and
operation and maintenance
manual following the
specification and sufficient
detail for said part of the work.
Sub-
Clause
4.1
Contractor provide sufficient
sample of materials and goods for
testing before incorporation into
said part of works.
Clause
6.3
After expiry date of Defects
Notification Periods, Engineer
are to issue Performance
certificate within 28 days.
Sub-
Clause
11.9
In 14 days after completion,
Certificate of Making Good
Defects is issued by the Architect
Clause
15.6

November 2017
4.5 Dispute Resolution Method
FIDIC PAM
'Engineer' act as 'superintending
officer'
Sub-
clause
3.3
Architect as superintending officer Clause
2.0
If the Parties fail to agree upon the
appointment within 42 days, then the
appointing entity or official named in
the Appendix to Tender shall upon
the request of either or both of the
Parties and after due consultation
with both Parties appoint this
member of DAB.
Sub-
clause
20.3
President of PAM shall appoint an
adjudicator, if provided that failure
to agree after the expiration of 21
days from the date of appointment.
(Clauses34.2)
Clauses
34.2
If the DAB has given its decision and
no notice of dissatisfaction has been
given by either Party within 28 days
after it received the DAB's decision,
the decision shall become final and
binding upon both parties
Sub-
clause
20.4
The adjudicator's decision shall be
final and binding if the adjudicator's
decision is not referred to arbitration
within six weeks from the date of the
adjudicator’s decision
Clauses
34.4
The arbitrator shall be finally the
dispute settled under the Rules of
Arbitration of the International
Chamber of Commerce
Sub-
clause
20.6
The arbitrator shall initiate the
arbitration proceedings in
accordance with the provisions of
Arbitration Act 2005 or any statutory
modification or re-enactment to the
Act and the PAM Arbitration Rules
or any modification or revision to
such rules.
Clauses
34.7

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