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A subcontractor had to pay winter precautions out of his own pocket

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Legal news
calendar 28 September 2014
globus Denmark

The Court of Arbitration found that a subcontractor had to pay for a part of the expenses regarding winter precautions since he could not prove that an extension of time had been agreed with the main contractor. Furthermore, the subcontractor had no claim for payment for his extra work because he had no documentation of the main contractor’s defective preparatory work.

An owner made an agreement with a main contractor about construction of concrete chutes and some other works. The main contractor had a subcontractor to carry out the concrete work.

The work was delayed and the owner accepted an extension of time if the main contractor paid the expenses for winter precautions. Subsequently, the main contractor and subcontractor agreed that the subcontractor’s work had to be completed by 2 December 2010.

However, the subcontractor’s work was not completed as agreed. Therefore, the main contractor stated that he would not pay for winter precautions after 2 December 2010. The subcontractor stated that he expected to continue the work until 30 December 2010.

After the handing-over meeting the parties disagreed about who had to pay for the winter precautions and extra works. The subcontractor filed a writ whereby he claimed payment for the expenses and the main contractor filed a counterclaim which, among other things, related to defects in the works.

The Court of Arbitration: The subcontractor had no proof of time extension
The Court of Arbitration decided that the subcontractor had to pay for winter precautions in the period after 2 December 2010 because he could not prove that he was entitled to time extension after this date. However, the main contractor had to pay for winter precautions until 2 December 2010 because he had accepted an extension of time until this date.

The subcontractor also claimed payment for extra works which in his opinion was due to the main contractor’s defective initial works. However, he had no proof of the defects and he had not given any notice of the defects. For that reason, the Court of Arbitration found that the subcontractor could not claim payment for extra work.

Some of the main contractor’s counterclaims, based on defects in the subcontractor’s work, were rejected. This was due to the fact that the main contractor had no proof of the defects and that he had not given any notification of the defects until he filed his writ of defence.

IUNO’s opinion

The party, who believes he has a justified claim, has the burden of proof. In this case the subcontractor could not prove that the parties had agreed on extension of time after 2 December 2010 and therefore he had no claim of payment for winter precautions in the period 2-30 December 2010.

Furthermore, the subcontractor had no proof of some of his extra work, including his notification of breach due to the main contractor’s defective preparatory work.

The decision clearly illustrates that the Court of Arbitration emphasizes the importance of documentation. Therefore, it is important to make sure that one has documentation of notifications and agreements concerning extra work. Furthermore, the decision illustrates how important it is to give notice of defects if a contractor takes over defective work from another contractor.

IUNO recommends that agreements concerning construction works as well as notices concerning delays and defects are always made in writing.

[Judgement of the Court of Arbitration, 9 January, 2014, C-12560]

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