If the early warning was notified in relation to a matter that is a compensation event, then a compensation event should have been notified instead. The CVI procedure, although a practical method of dealing with such issues, is not formally recognized under the contract and an appropriately recognised contractual notification should be given. An early warning stating a matter is a compensation event, is not a notification of a compensation event, which is separate.
With regard to payment, you don’t state what Main Option you have. If a lump sum form then the matter would need to be formally added to the activity schedule or Bill of Quantities to facilitate payment. This would require an implemented CE, although I know that ‘on account’ payments are often made to recognise the fact that the CE procedure can take some time. If a Target Cost approach then payment is not dependent upon agreement of the issue.