FIDIC time bar bites – Privy Council holds clause 20.1 is a condition precedent

Overview

The Privy Council (the Board) recently determined an appeal from the Court of Appeal of Trinidad and Tobago concerning a contractor’s variation claims under a 1999 FIDIC Yellow Book form of design and building construction contract (Uniform Building Contractors Ltd v Water and Sewerage Authority of Trinidad and Tobago [2026] UKPC 2). You can read the judgment here.

In line with previous authority, the Board held that clause 20.1 of the FIDIC 1999 General Conditions is a condition precedent to a contractor’s claim. The decision demonstrates the importance to contractors of maintaining disciplined and timely contract management, and of proactively advancing claims.

Background

On 23 May 2007, the Water and Sewerage Authority of Trinidad and Tobago (WASA) engaged Uniform Building Contractors Ltd (UBC) to design, supply and install 28.43km of pipeline from Rio Claro to Mayaro.

UBC’s scope was to complete the works constituting Package 1 (for circa TT $15.92m) and Package 2 (for circa TT $12.64m). An amended form of the 1999 FIDIC Yellow Book was used by the parties. Clause 20.1 was left unamended. 

WASA issued termination notices for the packages on 28 May 2009 and 4 June 2009 respectively. UBC commenced proceedings in the High Court seeking circa TT $13.91m for work done and recovery of costs incurred for the works. UBC based its entitlement on four work items that it argued were variations instructed by the Engineer. WASA argued the items were not variations and, in any event, UBC had no entitlement because it had failed to comply with the notice requirements as set out at clause 20.1 of the contract.

UBC’s claim failed in the High Court (alongside WASA’s counterclaim) but the Court of Appeal allowed UBC’s appeal. WASA was granted leave to appeal on 7 June 2024.

Privy Council’s Decision

The Board allowed WASA’s appeal and dismissed UBC’s claim.

Nature and Scope of the General Terms of the Contract

Considering clauses which addressed the sufficiency of the accepted contract amount, site risk and design responsibility (among others), the Board considered that the FIDIC 1999 General Conditions “can have left UBC in no doubt as to the comprehensive nature of their contractual obligations”.

It specifically rejected UBC’s argument that – because it commenced work before the contract was finalised and did not have time to investigate the site beforehand – the full effect of the contract terms should not be enforced against it.

Were the four disputed items variations?

Disagreeing with the Court of Appeal, and with the Engineer’s evidence, the Board determined the four disputed items were not variations. While the Engineer’s view was relevant, it “cannot displace the proper application” of the contract terms. On the Board’s analysis, none of the disputed items were variations as defined in sub-clause 1.1.6.9, resulting in UBC’s claim failing.

The Board nonetheless addressed the remaining issues.

Was clause 20.1 a condition precedent to entitlement?

Clause 20.1 of the FIDIC 1999 General Conditions provides that:

“the Contractor shall give notice to the Engineer, describing the event or circumstances giving rise to the claim … as soon as practicable, and not later than 28 days after the Contractor became aware, or should have become aware of the events or circumstances.

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 …”.

The Board said the language was “in classic condition precedent form”, observing that the “defining feature of a condition precedent is dependency between the requirement and the relief; one must be conditional upon the other”. UBC’s failure to make a claim under clause 20.1 was therefore fatal to any contractual entitlement.

This was in line with two previous decisions where clause 20.1 of the FIDIC 1999 form was treated as a condition precedent: the Board’s own in NH International (Caribbean) Ltd v National Insurance Property Development Co Ltd [2015] UKPC 37 and Akenhead J’s in Obrascon Huarte Lain SA v Attorney General for Gibraltar [2014] EWHC 1028 (TCC).

The Board further observed that while clause 20.1 in the FIDIC 2017 form “has a slightly more flexible series of provisions”, it is also clearly a condition precedent.

As well as its failure to advance its claim under clause 20.1, the Board observed that UBC separately failed to give notice under a bespoke clause 3.6 (of the Conditions of Particular Application) of the additional costs arising from the disputed items and seek a determination of their value under clause 3.5. The Board further rejected UBC’s waiver and estoppel-based argument that it should not be held to the requirements in clause 20.1.

Internationally, the same approach has been adopted in Dubai by the DIFC Court of Appeal in Panther Real Estate Development LLC v Modern Executive Systems Contracting LLC [2022] DIFC CA 016. In that case, the Court of Appeal made it clear that it will impose such conditions precedent stringently and that the requirements to give such notice had to be taken seriously by contractors. Contractor’s Notices and Claims for Time and Additional Payment Submitted under FIDIC 1999 edition: Clause 20.1

Takeaways

Contractors must have robust procedures in place to ensure claims are advanced through the appropriate contractual mechanisms, and within the express required timeframes.

The process is not included in the FIDIC contract to deny legitimate claims by contractors. The Board stated that the contractual regime’s purpose was to “ensure certainty so that, if there were claims for additional monies … they were clearly set out and promptly made”.

Furthermore, notice of an alleged claim entitlement is imperative to ensuring that the Engineer and/or the Employer have the opportunity to consider taking whatever necessary actions they may wish to undertake to overcome or alleviate delays that are within their control. Without such notice, that opportunity may well be lost.

Leaving aside the Board’s determination that the disputed work items were not variations, UBC’s contract administration failures were fatal. This case therefore provides a further clear warning to all contractors to have robust procedures in place to comply with these administrative requirements as clear pre-conditions to establishing entitlement.