FIDIC Conditions, 3rd ed./ Dispute between Contractor and Sub-Contractor/ Application of Clause 67 to disputes under Sub-Contract/ Interpretation and adaptation of Clause to Sub-Contract disputes/ Absence of an Engineer with respect to Sub-Contract performance/ Obligation to refer to Engineer before initiating arbitration proceedings not applicable.

The Defendant is the Main Contractor for the construction of a Power Generating Station. He subcontracted some civil works to the Claimant (Sub-Contractor). The Claimant claims additional costs due to various delays, and contractually agreed payments allegedly withheld by the Contractor, Defendant. This extract from the partial award on jurisdiction briefly addresses the issue of the application of Clause 67 to disputes under sub-contracts. See also Partial Award on Jurisdiction in Case 6611, above.

'[…]

The problem here is twofold: that the Sub-contractor is not a nominated subcontractor in the terms of Clause 69 of the Main Contract and apart from being approved under Clause 4 by the Engineer under the Main Contract is not under the direct control of the Engineer, and that the Engineer has no duties or powers in connection with the sub-contract. There is therefore no Engineer to refer to.

In order to resolve this issue we must go to Clause 28 of the sub-contract. I quote: "In effect the Sub-Contractor shall observe, perform and comply with all the provisions of the Main Contract on the part of the Contractor to be observed, performed and complied with so far as they relate and apply to the sub-contract works (or any part of the same) AND ARE NOT REPUGNANT TO OR INCONSISTENT WITH the express provisions of this sub-contract as if all the same were severally set out hereon" (Emphasis is mine).

I construe this to mean that the sub-contract, setting out the equivalent dispute clause to Clause 67, would be redrafted to remove the inconsistencies, to identify the Contractor and the Sub-Contractor as the proper parties, to identify the Sub-Contract and the Sub-Contract works and to omit requirements for adjudication by "The Engineer."

Accordingly I RULE that Clause 67 of the Main Contract as so adapted is applicable to the resolution of disputes under the Sub-Contract […].'