The contract under examination was a bespoke supply, delivery, erection and installation agreement on a major infrastructure project in Northern Europe. The provisions on extension of time and on the Contractor’s notification of claim were materially identical to FIDIC 1999 Sub-Clauses 8.4 and 20.1 respectively. The first provision conferred entitlement to an extension of time where the relevant milestone or completion date “is or will be delayed” by, among other causes, a breach of the agreement by the Employer. The second required the Contractor to give notice of claim within twenty-eight days of becoming aware of the relevant event or circumstance.
The Contractor contended that, on a proper construction of the two provisions read together, the twenty-eight-day window opened either when the Contractor first became prospectively aware that a milestone would slip, or when the milestone was in fact missed; the choice of trigger was the Contractor’s. The Employer contended that awareness, and therefore the clock, was anchored to the earliest knowable point. The difference, on a project carrying multiple parallel critical paths and a large portfolio of late-issued design packages, was determinative.
The architecture of FIDIC 1999 Sub-Clause 8.4 is decisive. Entitlement is conferred “if and to the extent” the milestone “is or will be delayed.” Two states therefore qualify. The first is the prospective state, where the Contractor can foresee on a proper programme analysis that a milestone will slip but the slip has not yet occurred. The second is the retrospective state, where the slip has already occurred and the as-built works have demonstrably fallen behind. The drafters did not write “is or will be delayed, whichever is the earliest.” They drafted in the disjunctive.
If awareness under Sub-Clause 20.1 were tied solely to the earliest moment at which delay could be apprehended, every later notification on a complex project would be defeated. The Contractor would be required to serve a protective notification the instant any design package fell behind, irrespective of whether that delay would in due course feed through to a milestone. That reading is unworkable on a large project with many parallel paths and would convert the notification clause into a trap for the diligent.
The correct reading is that awareness under Sub-Clause 20.1 is anchored to the entitlement under Sub-Clause 8.4. The twenty-eight-day window therefore opens at the prospective point, when the Contractor reasonably believes the milestone will slip, or at the retrospective point, when the milestone has slipped, at the Contractor’s election. Earlier prospective notification remains available, but it is an option rather than a forfeiture point. Three timeline pivots follow from this reading: A, where information is awaited and no awareness yet attaches; B, the prospective point of awareness; and C, the retrospective point of as-built slip. The interactive figure below traces those pivots and shows the position when the Contractual Notification is served within and outside the window.
The authority on materially identical wording in the construction context is Akenhead J in Obrascon Huarte Lain SA v Her Majesty’s Attorney General for Gibraltar [2014] EWHC 1028 (TCC), where the High Court considered the FIDIC 1999 mechanism. The relevant passage from the judgment is set out below.
There is no decision of the Finnish Supreme Court, and no other Finnish authority, that resolves the construction of a Contractual Notification clause of this kind. The Supreme Court decision in KKO 2008:19, sometimes invoked in cases of this type, turns on different facts and does not assist the present question.
The contractual provisions on extension of time and on the Contractor’s notification of claim are very similar to FIDIC 1999 Sub-Clauses 8.4 and 20.1. Akenhead J’s interpretation of those FIDIC provisions in Obrascon is well-founded. While the FIDIC 1999 Conditions are not incorporated into the contract under examination, the international character of those Conditions and their function as a model for similar clauses in international construction contracts make it appropriate to interpret materially identical wording in the same way under Finnish law. Raj’s reading of Sub-Clauses 8.4 and 20.1 is correct and is consistent with Finnish law.