ICC Awards

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The essence of Defendant's argument on the issue of competence runs as follows:

A tribunal acting under clause 67 of the conditions of Contract is only competent to entertain claims resulting from

(a) A written decision from the Engineer

or

(b) Failure of the Engineer to issue a decision within the 90 days provided by the contract.

It is not disputed that in this case there was a submission to the Engineer, nor that the Engineer failed to issue a decision within the 90 days prescribed. Thus, it was necessary for the Request for Arbitration to be lodged within 180 days from submission of the dispute to the Engineer.

The crux of this matter lies in determining when such submission to the Engineer took place. The Defendant claims that the operative date was that of a letter sent by Claimant to the Under-Secretary of the Ministry of Public Works with a copy to the Engineer, viz., November 4, 1987. The Claimant contends that the submission of the dispute to the Engineer was by its letter of January 11, 1988. In the latter case the request for Arbitration was clearly submitted within the 180 day period.

The Defendant contends that a "dispute or difference" existed between Claimant and Defendant as early as June 18, 1987, when Claimant sent a registered letter to the Engineer complaining about Defendant's failure to reduce the bank guarantee from 20% to 10%. It is not however contended by Defendant (in the Tribunals' view correctly) that this letter constituted a submission of a dispute under Clause 67. However, on November 4, 1987, the Claimant addressed the letter to the Under-Secretary of the Ministry of Public Works with a copy to the Engineer demanding a reduction of the guarantee. The Memorandum of March 14 filed by the Defendant quotes an extract from this letter as follows:

"We see no alternative than to inform the Government […] via the Minister of Public Works of this matter and to open a 'settlement of disputes' in accordance with Clause 67 of the General and Particular Conditions of Contract 1 Book of Tender, Document II."

This letter, contends the Defendant,

"[m]ust by any reasonable construction be treated as a reference of the dispute under claim to the Engineer, thereby triggering the first 90 day period contemplated by that clause."

The Claimant, in its Memorandum of March 31, contends that it is clear beyond reasonable doubt that Claimant's letter of November 4 'constitutes no such request' because

"First. The letter is not addressed to the Chief Engineer, but to his Excellency the Under-Secretary of the Ministry of Public Works; the Chief Engineer received only a copy for information."

"Second. The letter does not refer any dispute to any person but specifically and expressly declares that the Claimant would do so in the future if certain conditions were not met in the meantime."

The Claimant points out that the portion of the November 4 letter quoted by the Defendant omits relevant wording which should prefix the quotation:

"Should this reduction not be granted by November 30, 1987, we see no other alternative…" (underlining added by Tribunal).

In the judgment of the Tribunal having regard to the terms of the letter as a whole, it did not constitute a submission to the Engineer under Clause 67. Such a submission should be a clear reference to the Engineer for a decision. On the contrary, however, the letter of November 4 expressed at most an intention to submit the dispute to the Engineer only if the matter was not settled by November 30, 1987. In the event it was not settled and therefore on January 11, 1988, the Claimant sent a letter containing a formal submission to the Engineer under Clause 67.

In the judgment of the Tribunal it was this letter which constituted the only true reference to the Engineer. Thus, the Request for Arbitration filed on May 9, 1988, was lodged within the 180 day period prescribed by the Contract.

Accordingly the Tribunal dismisses the plea of the Defendant, and holds itself competent to entertain this case.'