The Employer is entitled to claim an amount, to be reimbursed by the Contractor, under Sub-Clause 2.5 of the Red Book, if the Employer considers to be entitled to any payment under any clause or otherwise in connection with the Contract.
The Employer has followed the procedure of notifying the Contractor, though belatedly.
Engineer will have to then proceed under Sub-Clause 3.5 to assess and determine the amount the Employer is entitled to be paid by the Contractor.
The question is, unlike in the Sub-Clauses 1.9, 2.1, 4.7, 4.12, 4.24, … etc., up to 19.6, there is no clause in the contract where it is expressly stated that the Employer is entitled to claim any costs under that clause.
In the current case, the Contractor has been failing to comply with certain environmental and social safeguards around the area of stone quarry and crusher used for the contract works. In the process, the Contractor has been asked to pay the damages caused to the affected persons and the contractor has oblised the demands to some extent. There are coffee farms and some dwelling units around the quarry. Theses parties have kept obstructing the contractor quite often from carrying out the quarrying and crushing operations on the plea that their crops are being damaged, their life is being affected, etc., due to noise and dust emission. These issues have caused delays to the progress. Contractor has requested the Employer many times to arrange for relocating the nearby dwelling units away from the quarry / crusher area to avoid the complaints and stoppages of the quarry/crusher operations. Under this Contract the Employer has to provide the land for the borrow areas, quarries and contractor’s accommodation, by making necessary compensations to the affected persons/parties. Initially the Employer has fulfilled his obligations accordingly. Now, with the increased complaints from the persons around the quarry/crusher area, the Employer has paid compensation to the affected persons and claimed under Sub-Clause 2.5, to be reimbursed by the Contractor, with a contention that the Employer has to incur these additional costs due to the contractor’s non-compliance with the contract provisions related to environmental and social safeguards.
Is the Employer entitled to the claimed amount?