What happens if the engineer fails to issue a contractual determination?

An engineer's failure to issue a contractual determination under a FIDIC construction contract can affect the parties' claims and dispute procedure, but the legal consequence depends on the edition, contract form and applicable Particular Conditions. In the 2017 Red and Yellow Books, Sub-Clause 3.7 deals with agreement or determination by the Engineer. The 2017 Silver Book uses Sub-Clause 3.5 concerning the Employer's Representative. Failure to act is not necessarily an automatic rejection or approval of every submitted claim; the correct contractual timetable and deemed consequences must be examined.

Establish which officer has determination powers

The employer, contractor, Engineer and Employer's Representative do not have identical functions in every FIDIC form.

Obtain the executed agreement, definitions, appointment notices and any delegation. A letter to an unauthorised site supervisor may not constitute a claim referred to the competent decision-maker.

Identify the matter requiring determination

Payment disputes, extension-of-time applications, variations, additional cost and employer claims can engage different contract mechanisms.

A determination may be required after specified notices and supporting submissions. The contractor should identify exactly what issue was referred and when the applicable procedure began.

FIDIC 2017 Red and Yellow Books

Sub-Clause 3.7 provides a structured agreement or determination process in the 2017 Red and Yellow forms.

The Engineer's duties, consultation period and determination mechanism are defined by the contract, subject to amendment. The parties should avoid importing an older Sub-Clause 3.5 procedure from the 1999 forms.

FIDIC 2017 Silver Book

The Silver Book places the relevant agreement or determination function on the Employer's Representative under Sub-Clause 3.5.

This distinction can matter when the employer's own appointed representative is asked to assess contractor claims. The actual terms control procedural rights and later Notice of Dissatisfaction requirements.

Completeness of the submission

A party alleging failure to determine should establish that it submitted a valid, sufficiently supported claim.

A brief letter saying "all losses are reserved" may not trigger the same duties as a detailed claim required under the contract. Preserve claim particulars, schedules, cost documents and proof of delivery.

Notice of claim versus fully detailed claim

The 2017 forms distinguish initial claim notification from later detailed substantiation under Sub-Clause 20.2.

The contractor should not assume a general project complaint starts every contractual time period. Each required procedural step should be identified and documented.

Relevant time limits

The determination mechanism and claims procedure can specify periods for consultation, decision and notices. Particular Conditions may amend those periods.

Counsel should calculate the dates from actual receipt, not simply assume a universal thirty-day deadline. A calendar of notices and replies helps avoid accidental loss of procedural rights.

Failure to decide

If the designated decision-maker fails to issue a determination within the required framework, the contract may prescribe a particular consequence or further procedural route.

Do not assume silence means full acceptance of a claim, or automatic final rejection, without reading the exact edition and amended provisions. The party should seek formal clarification and preserve any required next step.

The duty to act fairly

The contractual decision-maker may be required to follow a specified consultative or fair determination process within their defined role.

A decision rejecting all claims without considering relevant evidence may be challenged through the contract's dispute mechanism. However, dissatisfaction does not automatically prove procedural bad faith.

Reasons and supporting evidence

A proper determination should relate the contract provisions to actual facts, including records concerning delay and cost.

The party receiving an adverse decision should examine which claims were addressed and which were omitted. A payment certificate and a contractual determination can serve different functions.

Interim payment certificates

An Engineer may certify interim amounts under Clause 14 while separately determining disputed EOT or variation claims.

Failure to determine a separate claim does not necessarily authorise wholesale refusal of undisputed certified payments. The payment and claims clauses should be analysed together.

Employer claims

Determination procedures can govern employer assertions such as delay damages or reimbursement. The employer may also have to comply with applicable claims notices.

The employer should not assume it can make final unilateral deductions without following a mandatory determination process merely because it appointed the Engineer.

Notice of Dissatisfaction

The 2017 forms provide Notice of Dissatisfaction mechanisms and may impose strict procedural timing.

Where the determination is issued, the dissatisfied party should identify the actual clause and deadline. An informal email complaining that the decision is unfair may not satisfy required form and content.

Dispute Avoidance/Adjudication Board

Clause 21 of the 2017 forms addresses the DAAB mechanism. A dispute may proceed to the board according to the contract.

The party should establish whether a notice or prior determination step is required and whether a failure to determine affects admissibility. The conditions are not identical in every FIDIC book.

Arbitration and preconditions

A contract may require board adjudication or other steps before arbitration. A party should not assume delay by an Engineer automatically entitles immediate arbitration without examining applicable exceptions or frustration of the mechanism.

The arbitration agreement and governing law must also be considered. A procedural dispute can be separate from the merits of the payment claim.

Evidence of administrative delay

Preserve correspondence requesting action, meeting minutes, reminders and the full claim register.

A chronological schedule identifying submission, agreed extension and missed contractual decision date is more persuasive than a broad allegation that the Engineer "never cooperates."

Design-delay example

An employer delays release of approved design drawings, the contractor claims EOT and prolongation cost, and the Engineer repeatedly postpones a decision.

The contractor should preserve programme analysis, design correspondence, initial notice, detailed claim and missed determination dates. The claim may proceed through the prescribed dispute process while work continues as required.

Silver Book example

The Employer's Representative does not determine a disputed change under an EPC contract, while the employer deducts alleged delay damages.

The contractor should analyse Sub-Clause 3.5 alongside claims, payment and dispute clauses. A failure to determine can be material to the legality of the employer's position but does not automatically establish the full amount of the contractor's counterclaim.

Practical notice

Send a formal request identifying the outstanding matter, applicable contractual provision, completed submissions and decision due.

Do not alter the original submission dates or suggest the decision was actually issued. A precise documentary record preserves the party's position.

Opinion and recommended course

Failure to determine can constitute a significant contractual procedural issue and lead toward DAAB dispute resolution, subject to the exact form. Identify Red/Yellow Sub-Clause 3.7 or Silver Sub-Clause 3.5 as applicable, calculate notices and deadlines, and preserve the full claim. Silence should never be treated as a universal substitute for the determination process.

Principal authorities: FIDIC 2017 Red/Yellow Books, Sub-Clause 3.7; FIDIC 2017 Silver Book, Sub-Clause 3.5; Sub-Clause 20.2 and Clause 21 where applicable; Particular Conditions, governing contract law and arbitration agreement.