Article 40 The subcontract provides the exclusive remedies for all claims between the parties

40.1 All claims to payment or compensation of any kind are to be asserted and established in accordance with the provisions of this Subcontract. These Subcontract provisions are a complete system for establishing all and any entitlements as between the Parties, arising out of or in connection with the Subcontract, its breach, its alleged termination or execution of the Subcontract Works.

40.2 Unless established by the provisions of this Subcontract, no claim by either Party is enforceable against the other Party.

Article 41 payment of the subcontract price

41.1 As payment to the Subcontractor for the full and complete performance of the Subcontract Works the Main Contractor shall pay and the Subcontractor shall accept the sum set out as the Subcontract Price in the Subcontract as varied in accordance with the Subcontract.

41.2 Payments to the Subcontractor are made by instalments calculated by reference to either the progress of the Subcontract Works in a given period (the “Invoice Period”) or to the milestones set out in the Schedule of Subcontractual Payments or otherwise in accordance with the provisions of this Subcontract.

41.3 The Subcontract Price may be varied only in accordance with the Subcontract. The value of each payment will be established by the rules set out in this Chapter 6.

Article 42 applications and procedure for payment

Invoice Periods

42.1 With respect to any Invoice Period, the Subcontractor shall be entitled to apply for the payment of the amount corresponding to progress on the Subcontract Works and/or milestone if it has achieved such milestone, including any daywork instructed under Article 35.15, within that Invoice Period.

Applications for payment

42.2 The Subcontractor shall submit applications for payment in the currency(ies) of the Subcontract for the amounts that are associated with the progress of the Subcontract Works (including claims) and/or milestones achieved in an Invoice Period after the last Day in that Invoice Period.

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42.3 Applications for payment shall be submitted in the form set out in an Appendix (if any), or, if there is no such Appendix, in a form established by the Subcontractor and agreed by the Main Contractor.

Certification of payment

42.4 The Main Contractor shall certify to the Subcontractor the amount due and payable to the Subcontractor with respect to each application for payment. The Main Contractor shall certify the entirety of the amount set out in the Subcontractor’s application for payment other than the following:

  1. an amount included in the application for payment that has been included fraudulently or in error;
  2. any amount agreed as due from the Subcontractor in accordance with the terms of the Subcontract;
  3. with respect to any milestone, the amount associated with that milestone, if the Subcontractor has not submitted the documentation required to be submitted for that milestone as set out in the Subcontract;
  4. any amount to be paid by the Subcontractor for the invoice period covered subject to Article 27.2
  5. subject to Article 30.2, any amounts paid by the Main Contractor in order to discharge, or reserved for the purposes of discharging, any lien, encumbrance or third-party right created on or in respect of the Subcontract Works or any work, materials, supplies or Plant unless, if necessary, the Subcontractor has provided adequate security for such amounts to the Main Contractor in form and amount reasonably satisfactory to the Main Contractor; and
  6. if this Subcontract is terminated by either Party, the Main Contractor shall not be obligated to make further payments except in accordance with Articles 56 and 57 and Chapter 13.

Notification of the certified amount

42.5 The Main Contractor shall notify the amount to which the Subcontractor is entitled on or before the twenty-first Business Day after the Main Contractor’s receipt of the Subcontractor’s application for payment. The amount stated in that Notice shall be the “certified amount”. If the Main Contractor does not certify the entire amount claimed in the Subcontractor’s application for payment, the Main Contractor shall give a reasoned explanation for not certifying the difference at the same time as it certifies the amount acknowledged as due.

42.6 If the Main Contractor does not certify the entire amount claimed in the Subcontractor’s application for payment, invoicing by the Subcontractor for a lesser amount does not signify that the Subcontractor accepts that the Main Contractor is discharged from the payment of the amount not certified. Such sums are considered to be the subject of a Notice as sums claimed under Chapter 13, which may eventually be dealt with by the dispute procedure in that Chapter.

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Submission of the invoice

42.7 The amount certified shall be a sum due and payable, and the Subcontractor shall be entitled to issue the corresponding invoice. The invoice shall be payable by the Main Contractor 35 Days after the Day on which the Main Contractor receives the Subcontractor’s invoice (and if such Day is not a Business Day, then on the immediately following Business Day).

No withholding

42.8 The Main Contractor shall not be entitled to unilaterally withhold or deduct from any invoice any amounts in respect of set-off, abatement or counterclaim unless and until a decision under Chapter 13 or otherwise has been made that the Main Contractor may withhold or deduct such amount.

Payments

42.9 All payments made under this Subcontract shall be made by the method set out in an Appendix (if any), and otherwise by bank transfer to an account or accounts nominated by the Subcontractor.

42.10 Any payment that the Main Contractor is not obliged to make under Article 42.4 shall be made, without interest, together with the next payment applied for that falls due, after satisfaction by the Subcontractor of the conditions described in that Article and/or the correction of any Defect necessary to enable certification of such amount. Unless otherwise agreed, there is no right to keep retention money (in the sense of a percentage of a sum otherwise due for the performance of the Subcontract Works).

Interim payment does not constitute acceptance of the Subcontract Works

42.11 No payment to the Subcontractor by the Main Contractor, with the exception of the final payment, shall constitute an acceptance of any of the Subcontract Works to be performed or furnished by the Subcontractor or shall relieve the Subcontractor of any of its obligations or liabilities with respect thereto.

Final Payment

42.12 The final payment shall constitute acceptance of the Subcontract Works performed or furnished by the Subcontractor if the Subcontractor in its application for the final payment and in the final invoice includes an express statement that effecting the final payment will have the effect of acceptance of the Subcontract Works, unless the Main Contractor has reserved its rights.

Article 43 VAT/GST or equivalent consumption taxes

43.1 If under this Subcontract any payment is due to one Party from the other (including Delay Damages due under Article 37), they shall be paid as they fall due, along with accrued financing charges at the rate described in Article 44. Each invoice shall be a VAT/GST (Value Added Tax/Goods and Services Tax) invoice where VAT/GST is due on such payment, and, to the extent required by law, each Party shall pay VAT/GST in addition to the amount invoiced.

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Article 44 Financing charges for late recognition of rights between the parties

44.1 The purpose of this payment is to compensate the Party affected for the delay in receipt of money otherwise due to it. Without prejudice to any other right or remedy, any payment that becomes due, or should become due, to either Party under the Subcontract (including claims that have to be established under Chapter 13) shall bear simple (uncompounded) financing charges (i.e. interest) from the Date that the payment becomes due or should become due until the Date of Payment at the rate agreed by the Parties, or, if there has been no such agreement, three percentage points above the basic lending rate for immediate money of the central bank of the country or countries of the currency or currencies of payment.