Part 1 set out when the Contractor’s twenty-eight-day notification clock under FIDIC 1999 Sub-Clause 20.1 starts to run. The harder question follows. Suppose the Contractor missed the window altogether. The Employer’s late design caused a critical delay; the Contractor was held back by that delay; but no Contractual Notification was served within twenty-eight days of either trigger. Can the Employer turn the Contractor’s procedural default into a substantive recovery, and claim liquidated damages for the very delay it itself caused? Can it terminate the agreement on the back of that delay?
The common-law answer is well-known. The doctrine of prevention bars a party from benefiting from its own breach. The Employer cannot rely on a missed notice as the doorway to LDs for a delay the Employer caused. Finnish law, by contrast, does not recognise the doctrine by name. The question put to Möller was the substantive one: is there an equivalent route under Finnish law, or does the Employer succeed by default once the notice is missed?
The starting point for the construction lawyer is unsurprising. Under English law, the Prevention Principle is settled. A party cannot rely on its own breach to advance a claim against the other; an Employer who has caused the delay cannot deduct liquidated damages for the time slippage that flowed from its own failure. The principle has a long lineage and turns on the elementary proposition that no one can take advantage of his own wrong. A missed notice does not change that position; it changes only the procedural posture in which the substantive answer is reached.
The harder question for the construction-arbitration practitioner working in a civil-law jurisdiction is whether the same outcome holds where the doctrine is not named. The Employer in such a forum will press exactly that argument: there is no Prevention Principle in Finnish law, and the Contractor is in default of the notification mechanism, so liquidated damages should run as a matter of contract. If the doctrine is the only route to the Contractor’s defence, the Contractor loses by name.
The Finnish-law position must therefore be tested independently. Two questions arise. First, does Finnish law recognise an equivalent doctrinal route that bars the Employer from relying on its own breach to recover LDs? Second, even if it does, does the Contractor’s missed notice itself break the chain of causation between the Employer’s breach and the delay, so that the Employer can recover anyway? The figure below traces the two doctrinal paths to the same destination, and Möller’s endorsement that follows confirms that the route may be different but the result is the same.
Notification window missed. Employer claims LDs and threatens termination.
No causal link between the absent notification and the delay.
The doctrine of Prevention Principle is, as such, not known under Finnish law. The principles of good faith and loyalty have, however, an important role in the Finnish legal system. There is hardly any difference between the purpose and use of the good faith and loyalty concepts; both are Finnish applications of the internationally recognised principle of good faith. In particular, the principle of loyalty includes an obligation to collaborate to achieve the purpose of the contract.
It follows that even if the Contractor did not submit a notice of claim for an extension of time in accordance with the requirements of the contract, the Employer would not be entitled to liquidated damages or associated costs for the delay caused by the Employer’s own failure to issue design information in a timely manner. To allow it would be construed as bad faith and a breach of the principle of loyalty. There is, in any event, no causal link between the Contractor’s failure to give notice and the delay. In this scenario the Employer is not entitled to terminate the contract.