Article 40 Contract Price

40.1 “Contract Price” shall be the price set out in the Main Contract Form for the provision, on a Turnkey basis, of the Works, including the supply of all the goods and services that are indicated in this Contract, subject to such additions thereto or deductions therefrom as may be made in accordance with the provisions of the Contract.

Article 41 Payment of the Contract Price

41.1 As payment to the Contractor for the full and complete performance of the Works the Employer shall pay and the Contractor shall accept the Contract Price as varied in accordance with the Contract.

41.2 The Parties recognise and agree that the Contract Price is payable in instalments according to the progress of the Works in an Invoice Period and/or milestones as set out in an Appendix (if any) and otherwise in accordance with the provisions of this Contract.

41.3 The Contract Price may be varied only in accordance with the Contract. The value of each payment shall 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 Contractor shall be entitled to apply for the payment of the amount corresponding to progress on the Works and/or milestone if it has achieved such milestone within that Invoice Period.

Applications for payment

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

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 Contractor and agreed by the Employer.

Approval of payment

42.4 The Employer shall approve the amount due and payable to the Contractor with respect to each Contractor’s invoice by marking a copy of the invoice as “accepted and approved for payment”. Such accepted and approved statement shall be referred to as a “Payment Certificate”. The Employer shall approve the entirety of the amount stated in the Contractor’s application for payment subject to the following exceptions:

  1. An amount is included in the Contractor’s invoice that has been included in error or fraudulently; and
  2. With respect to any payment; when the Contractor has failed to submit documentation relevant to, and required to be submitted for, such payment.
  3. Unless otherwise specified in the Special Conditions, the Employer shall approve payments to the Contractor at monthly intervals as they arise, unless the Employer has referred the claims to the CDB, if the Parties have appointed one before the application for payment was made. In that case, the CDB shall also approve any sums it determines to be due to the Contractor, on a monthly basis, unless such sums have been already approved by the Employer.

Notification of the approved amount

42.5 The Employer shall certify the amount to which the Contractor is entitled in a Payment Certificate on or before the tenth (10th) Business Day after the Employer’s receipt of the Contractor’s application for payment. The amount stated in that Notice shall be the “approved amount”. If the Employer does not approve the entire amount claimed in the Contractor’s application for payment, the Employer shall give a reasoned explanation for not approving the difference at the same time as it approves the amount acknowledged as due. If the Employer does not provide the Contractor

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with reasons for non-approval of all or part of the Contractor’s application for payment, on or before the aforementioned tenth (10th) Business Day then the entire amount of the Contractor’s application for payment shall be deemed approved and the Employer shall be obliged to issue the Payment Certificate for the full amount of the relevant Contractor’s invoice.

Submission of the invoice

42.6 The amount approved or deemed approved shall be a sum due and payable, and the Contractor shall be entitled to issue the corresponding invoice. Unless otherwise specified in the Special Conditions, the invoice shall be payable by the Employer twenty (20) Days after the Day on which the Employer receives the Contractor’s invoice (and if such Day is not a Business Day, then on the immediately following Business Day).

42.7 If the Employer does not approve the entire amount claimed in the Contractor’s application for payment, invoicing by the Contractor for a lesser amount does not signify that the Contractor accepts that the Employer is discharged from the payment of the amount not approved. Such sums shall be considered to be notified as sums claimed under Chapter 13, which may eventually be dealt with by the dispute procedure in that Chapter.

No withholding

42.8 The Employer shall not be entitled to unilaterally withhold or deduct from any payment of an approved amount, any amounts other than;

  1. Any amount to be paid by the Contractor to the Employer in respect of Articles 27.2, 37, 46.10 through 46.13, or otherwise is overdue;
  2. any amounts paid by the Employer 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 Works or any work, materials, supplies or Plant under Articles 30 and 34 unless, if necessary, the Contractor has provided adequate security for such amounts to the Employer in form and amount reasonably satisfactory to the Employer; and
  3. Any amount that the CDB, if the Parties have appointed one has decided that the Employer may withhold or deduct.

If the Parties have a CDB, it may be called upon at any time to determine the validity of the Employer’s withholding of any kind.

42.9 All payments made under this Contract 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 Contractor.

42.10 Any payment that the Employer is not obliged to make under Article 42.8 shall be made, without interest, together with the next payment applied for, that falls due, after satisfaction by the Contractor 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 Works).

Payment does not constitute acceptance of the Works

42.11 No payment to the Contractor by the Employer shall constitute an acceptance of any of the Works to be performed or furnished by the Contractor or shall relieve the Contractor of any of its obligations or liabilities with respect thereto.

Article 43 VAT /GST or equivalent consumption taxes

43.1 If under this Contract any payment is due to one Party from the other (including Delay Damages or bonuses 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 such tax is due on such payment, and, to the extent required by law, each Party shall pay VAT/GST in addition to the net amount invoiced.

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

44.1 Without prejudice to any other right or remedy, any payment that becomes due, or should become due, to either Party under the Contract (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 in the case of late approval of payment, until the Date of payment at the rate agreed by the Parties, or, if there has been no such agreement, at 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.

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44.2 The purpose of this payment is to compensate the Party affected for the delay in receipt of money otherwise due to it. The right to this payment is established automatically on the occurrence of a non-payment for whatever reason and is due and payable on demand.