An Italian Claimant/Contractor entered into contracts with a public authority in an African State (the Respondent/Employer) for the construction of roads in that State. A German engineer was appointed for the work. The Claimant/Contractor brought an arbitration for damages for matters for which it alleged the Respondent/Employer was responsible.

FIDIC Red Book, Fourth Edition (1987). Clauses 11 and 67.

In the final award in ICC Case No. 10619, the Arbitral Tribunal examined, among other things:

whether the Respondent/Employer could rely on a notice of intention to commence arbitration of the Claimant/Contractor in order to be entitled to request an arbitral tribunal to review and revise decisions of the Engineer under Clause 67; and

whether the Claimant/Contractor could justifiably rely on data as to the local resources for materials provided by the Respondent/Employer during the tender period, for purposes of Clause 11.

Entitlement to rely on other party's notice of intention to commence arbitration

'17. The Respondent does not dispute any more that [Claimant] was entitled to additional time as granted by the Engineer . . . Consistently therewith, he requests only that any decisions of the Engineer awarding sums to Claimant be reversed . . .

Under Clause 67.1 of the Conditions of Contract any dispute arising between the Employer and the Contractor shall have first to be referred in writing to the Engineer, with a copy to the Employer.

This is what the Claimant had done by letters of 18 October 1998, leading to the Engineer's decisions of 17 November 1998, and by letters of 9 September 1998, leading to the Engineer's decisions of 5 May 1999.

The Claimant, being dissatisfied with both the time extensions and the amount of money granted to him by the Engineer has notified the Employer and the Engineer, within the prescribed time limit, of his intention to commence arbitration and filed on 11 August 1999 the Request for Arbitration initiating this proceedings.

The only question which deserves consideration at this stage is whether the Respondent, who has not objected within the prescribed time limit to the Engineer's decisions and has not stated his intention to commence arbitration to have the same reviewed and revised, may take advantage of the notice made by the Claimant to that effect and request the Arbitral Tribunal to reverse the Engineer's decisions.

18. The answer should be in the affirmative considering that the Claimant has declared his dissatisfaction with the entire content of the Engineer's decisions. Therefore, since notification of intention to commence arbitration has been given within the prescribed time limit by the Contractor, the Engineer's decisions have not become final and binding and "the arbitrator(s) shall have full power to open up, review and revise any decision, opinion, instruction, determination, certificate or valuation of the Engineer related to the dispute" (Sub-clause 67.3). This conclusion is confirmed by Sub-clause 67.3 when the same provides that "neither party shall be limited in the proceeding before the arbitrator(s) to the evidence or arguments put before the Engineer . . .".

On the other hand, the Claimant has never disputed the Respondent's entitlement to challenge the Engineer's decisions.

However, as mentioned above [omitted from this extract], the Respondent has requested that the Engineer's decisions be reversed only insofar as sums have been awarded to the Contractor and not regarding extensions of time which have been granted.'

Contractor's reliance, for purposes of tender, on Material Reports provided by Employer

'73. A first issue to determine in connection with the [alleged design changes] is whether the Contractor justifiably relies on the Materials Reports as a legal basis for his contention.

There is no doubt that the Materials Reports were not contractual in nature. It was said in introduction thereto that they were "not definitive and should be used as a guideline only as to what can be encountered in the projected area. It is also expected that during the construction period additional and differing materials will be encountered from those described therein". In paragraph 2.2., "Pavement materials", it was also said that "the results of the preliminary tests undertaken on these materials indicate that all sites are potential sources for natural gravel wearing course material": "potential" undoubtedly leaves a margin of uncertainty. Furthermore, in the last lines of the minutes of the pre-bid meeting held on 31 March 1994, "the Bidders attention [was] drawn to the fact, that the Materials Report [sic] does not form part of the Contract Documents, and is provided for information only". Undoubtedly that statement should have been an incentive to the bidders to carefully verify by their own means the reliability of the relevant information.

For its part, Article 11 GCC [General Conditions of Contract] requires that "the Employer shall have made available to the Contractor, before the submission by the Contractor of the tender, such data from investigations undertaken relevant to the Works, but the Contractor shall be responsible for his own interpretation thereof". The Tribunal thinks, however, that one cannot expect from a bidder, within the short period of time left for him to prepare his bid, to investigate on matters of local resources of materials over the Employer's findings which are deemed to result from lengthy prior queries in subsoil and are supported by graphs, diagrams, samples and other probatory materials; a bidder is justifiably required to interpret the data made available to him; he is not required to expedite new thorough investigations which the Employer says in good faith to have carefully carried on presumably for months if not years, in the interest of the Works. Interpreting data is one thing; undertaking new investigations in a region plus or minus close to a road of about 180 kms to check whether the required materials exist or not as described in quantity and quality, at the locations identified by the Employer, is not a thing which can reasonably be said to pertain to a bidder.'

The Arbitral Tribunal found that the data provided by the Respondent/Employer was erroneous and misleading and confirmed the decisions of the Engineer granting a time extension and extra costs to the Claimant/Contractor.