LDs and Practical Completion

Project is ongoing.

In a situation were works are delayed for almost two years, the
Employer extended and fixed the Final Completion for 2,5 years.

On the Practical Completion date, the situation is mum. It still stands

on the Original Contract Date.

As per terms in a Bespoke Contract, Liquidated Damages are based

and tied to the Completion Date. There is no any action by the
Employer, on LDs, until now.

If the Works reach completion stage before any further Employer's

reaction, on LDs, what is possible scenario for both parties in the
Contract, Employer's and Contractor's?

Whether LDs may be considered after the project has reached

Practical/Substantial completion, as per mentioned scenario?

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1w
Chris Nixon Todor I am trying to tie together your two first lines (a)The
employer has extended final completion date (b) practical completion date is as
stated in the contract.

I would have thought practical completion is what we would refer to as

completion and any outstanding works would be de minimis done in the defects
period before a perfance certificate or equivalent. Can you clarify why the
completion date is not amended ?Show less
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1w
Todor Unkovski Strange situation.
Neither a Client, nor the Contractor reacted after the Practical Completion, and
even date of the Final Acceptance, both expired.
Only a year later, the Client sent the Amendment to the Contractor stating new
date of the Final Completion, ignoring date of the Practical/Technical
Completion. Without reasonable explanation.
Until present time, there is no further reaction from both sides. Works
 continue...
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6d
wayne robinson Did the client not extend the comp date by 2.5 years? Your
statement is a conflict. If you have given the appropriate notices as reqd by the
contract and the employer has not responded in the prescribed manner then he
is in breach and time is at large. He has no right to levy lds. If he does take him
to adr.
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6d
Todor Unkovski The Final Completion Date was May 2016. The Practical
Completion targeted as March 2016. Both parties were causing delay, with late
payments and slow progress. No one contractualy reacted.
In April 2017, the Client extended the Final Completion Date to December 2018,
but remained silent on the issue of date for The Practical Completion.
Liquidated Damages are connected to that Date of the Practical Completion,
which as it is, stands on March 2016. There are no further notices from either
side.
Liquidated damages are in limbo, not levied to date. What is happening to them
in present situation? More or less, previous was explained in the topic.
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5d
Angulo Okiring This is a matter resolved by ADR options. Contract
administration and management comes to play. I would conclude that the
contract wasn't well administered and managed. Correspondence on the project
also was weak.
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4d
Eng. E J Basil Jayasiri Perera As Todor has stated, this is a situation not
only strange, but unbelievable too. I don't like to pretend, this as a gross
negligence or severe unawareness of the Employer's party, since such inaction
can never be expected in any Contract.

I think, the Contractor may have a legal responsibility to remind the Employer
about this situation, though it is not a Contractual requirement. Otherwise, the
Contractor need not worry, if LDs are not imposed. Depending on the Contract
sometimes, the Employer may be not entitled to recover LD at a later stage.

Without knowing the Conditions of Contract, the above are the facts I can set
down.
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3d
Gavin Edwards Who is administering the Contract and what are they doing
(or more likely not doing?)?
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2d
Todor Unkovski The Project is located in one of Gulf countries.
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2d
Todor Unkovski As per Contract Document:

Practical/Technical Completion is achieved when: All structures has been

completed in strict compliance with the dwngs & specs., All required testing and
commissioning has been conducted, The work site is clean and in safe
condition, The Client has given Contractor a written notification that all
technical completion activities have been completed and is ready use by
company, All utilities and support systems are fully operational, All marked-up
dwngs and other documents has been received by client, All warranties are in
placed 5. All outstanding snag list items are completed.

Final Completion/ Acceptance is achieved when Practical/Technical Completion

has been achieved, All as-built dwngs and other documents has been received
by the Client, the Contractor has fully demobilized from construction/work site.

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2d
Eng. E J Basil Jayasiri Perera What about the issuance of Performance
Certificate? According to standard Conditions of Contract, "Only the
Performance Certificate shall be deemed to constitute acceptance of the
Works."

If the above Certificate too has already been issued and the Contract is silent
on not recovering LD in time, this situation will become Extra - Contractual,
which may be solved either amicably, through ADR/DAB/DB if such method is
still prevailing. Otherwise the only solution is Arbitration and failing which,
Litigation.

Anyway, it is wise for the Contractor to obtain legal advices on this situation,
whether to keep quiet or to initiate any pertinent action. Show less
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