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In May 2007 Uniform Building Contractors Ltd (UBC) and the Water and Sewerage Authority of Trinidad and Tobago (WASA) entered into a contract for the design, supply and installation of a 28km pipeline. The Conditions of Contract were the FIDIC Yellow Book, 1999 Edition.
The FIDIC Yellow Book is a standard form of contract for design and build projects with payment in the form of a lump sum fixed price.
UBC claimed additional payment for 4 items of work which they asserted were variations instructed by the Engineer.
1. Laying of pipes in the roadway (cutting out and replacing asphalt) rather than on the verge; 2. Removing unsuitable excavated material; 3. Importing suitable backfill; and 4. Night work
The contract was terminated in 2009. UBC commenced court proceedings regarding the above in 2013. The amount claimed was TT$ 13,9 million, around US$ 2,5 million.
The High Court threw out the claim. The judge found that the fixed price included the disputed work.
The Court of Appeal overturned the High Court decision, ruling that the Engineer approved the work as variations and had waived the need for strict compliance with the provisions of the contract in the interest of “fairness”. Furthermore, since the contract was terminated, Clause 20.1 did not apply.
WASA then appealed this decision to the Privy Council. The Privy Council allowed the appeal.
The Privy Council considered the principles behind the Yellow Book Conditions of Contract.
Lump Sum Design and Build Contracts – the Contractor is deemed to have satisfied himself regarding the price and site conditions (Clauses 4.10 and 4.11). The Contractor bears the risk for work expressly, or which by implication, are included in the contract price.
Variations – work required to meet the requirements of the specifications is not a variation (Clause 4.1).
Notices – the requirement to give notice of a claim within 28 days is a strict condition precedent (Clause 20.1).
Authority of the Engineer – the Engineer does not have the authority to alter or amend the contract, or to relieve a party of any duties, obligations or responsibilities ( Clause 3.1 (b)) .
The Privy Council ruled that none of the 4 items were variations.
1. Roadway excavation- the specifications described cutting through asphalt and reinstating the roadway. UBC were responsible for the design, changing the route from the verge to the roadway was a design decision and not a variation. 2. Backfill – it was expressly stated that if the in-situ excavated material was unsuitable the contractor must import backfill. As stated above the contractor is deemed to have satisfied himself in relation to site conditions. 3. Night work – this was as a result of the contractor making up time due to UBC’s own performance or as permitted in the site working arrangements.
The Privy Council noted that neither the contractor nor engineer had followed the procedure for variations under Clause 13. Therefore the contractor’s claim regarding the instructed works needed to be notified under Clause 20.1.
The “waiver and estoppel by the engineer” argument would not fly since the engineer had no authority to amend the contract or relieve a party of its contractual obligations. Furthermore this argument was never raised by UBC in its pleadings, nor in the High Court, and should not have been considered by the Court of Appeal.
The Court of Appeal was incorrect in finding that Clause 20.1 did not apply. Any rights and obligations which accrue prior to termination must survive. The time for notifying of claims had expired long before the termination of the contract.
Clearly the waiver and estoppel argument was only introduced after the High Court decision, as a way to avoid the strict compliance with Clause 20.1. Similarly the argument that the termination of the contract meant that compliance with Clause 20.1 did not apply.
You have to question why, if the contract was terminated in 2009, the contractor only instituted legal action in 2013, some 4 years later. The Privy Council judgement was only given this year, 2026. Thirteen years of time and cost wasted.
This outcome may appear obvious to CAASA members, yet the UK Court of Appeal went down another track.
Although the recent editions of both the FIDIC and GCC contracts contain provisions that allow the application of a time bar to be challenged, contractors and employers must note the requirements of the contract in relation to time periods and ensure compliance..
A notice of claim may take an hour or two to draft, failure to do so could cost millions.
CAASA MATTERS
Our monthly webinars commence on 13th February 2026. The first 3 sessions will delve into compensation events under the NEC starting with how the contract deals with inclement weather.
As mentioned in previous newsletters out Mentorship Programme ended inNovember 2025. We are currently putting questions to the mentees on a range of adjudication related issues to gauge both their knowledge and the effectiveness of the programme.
The feedback received from the mentees has been positive and we will, with some tweaks, run this programme again in 2026.
A heads up - our financial year ends on 28th February. We will be sending out membership renewal invoices in the next month or two.
