Final Notice of Default
Our Ref: xxx
Date: xxx
To : xxx Mideast
Oman Branch
Attention : Mr. xxx Sing
Project : xxx Building, Oman
Subject : Final Notice of Default
Reference: a) Xxx letter xxx dated 06 June xxx, Final Notice of Default
b) Xxx letter xxx dated 19 October xxx
Dear Mr Deeptha,
This is in reference to the Main Contractor letter xxx DATE: June 13,xxx in response to our Final Notice of Default ref (a) above.
The response of the Main Contractor describes the challenges he is facing on the Main Contract with the Employer; however, these issues and discussions are unrelated to the Subcontract with Xxx and have no connection to the release of our retention monies.
First, The Sixth Schedule of our Subcontract is clear an explicit (Special terms and conditions, Clause 9: Payment terms). These terms are not subject to any other party’s consent or compliance as suggested in the Main Contractor’s response, and this is specifically the reason why such special terms and conditions exist in our Subcontract.
The delivery of Pods was completed on 10 December xxx. Consequently, the release of the 5% retention which is due no later than 1 year from delivery (10 December xxx) has been now due for over 1.5 years
Second, the main Contractor response attempts to raise allegations of delay against Xxx, such allegations are categorically and fundamentally rejected as false. The deliveries were completed on 10 December xxx in full compliance with the mutually agreed programme issued to all parties in August xxx prior to the start of the deliveries. This milestone was also achieved despite the Main Contractor’s instruction to hold pod deliveries between 11 October xxx and 24 October xxx as recorded in our letter ref (b) above, and despite the Main Contractor’s recorded delays in releasing our advance payment.
Every single Pod delivered has been approved by the Contractor and the Engineer, and all works under our scope have been certified.
Moreover, none of the 38 comments/exclusions listed by the Engineer in the TOC document dated 18 September xxx relate to Pods. All listed comments/exclusions and NCRs relate solely to the Main Contractor’s own incomplete scope of works.
We have extended our cooperation and support to the Main Contractor in the past and we are ready to continue to do so, however it is deplorable that the Main Contractor is now attempting to push false and baseless allegations of delay against Xxx in an attempt to justify his own defaults. Such statements are unacceptable and are opposite to the spirit of continued cooperation the Main Contractor is requesting.
Third, while we may understand that the Main Contractor is facing difficulties in the delivery of his Main Contract scope, such liabilities have absolutely and categorically no relation to the performance of Xxx on the project and we totally reject any attempt either direct or indirect at associating Xxx with such Main Contract Liquidated Damages or any attempt at associating Xxx with the performance or delays of the Main Contractor on the Main Contract. Xxx has delivered its scope in full and on schedule and the Main Contractor remains solely liable for his own performance under his Main Contract. Xxx will not be party to,or agree to,any negotiations or amicable resolutions between other parties at its expense.
Finally, Xxx remains open to reasonable discussions to accommodate the Main Contractor’s cash flows, however the Main Contractor’s current response is vague and fails to put forward any proposed schedule for the release of overdue payments of certified works and release of retentions which are now due for 2 years and 1.5 years respectively.
Instead, the Main Contractor is attempting to alter the terms of Subcontract and shift his own liabilities onto Xxx. At the same time the Main Contractor has been, and is still, making use of funds due and owed to Xxx to alleviate his own cashflows while directly and deliberately inducing financial harm to Xxx, its shareholders and its employees.
We reiterate our good will to maintain the cooperation and relation with the Main Contractor, on the prior condition that such cooperation is reciprocated.
Therefore, kindly provide us under 7 days from the date of this letter with the following:
- A clear date for the unconditional release and payment of the 5% retention money amounting to OMR xxx in accordance with our Subcontract which has been due since 10 December xxx. This date shall be no later than 30 days from the date of our Final Notice of Default dated 6 June xxx.
- If the Main Contractor wishes to schedule this payment to accommodate his cash flows, we can extend our support on the condition that the complete balance is paid in full no later than 30 days from the date of our Final Notice of Default dated 6 June xxx.
- A best estimated date for the release of the pending amount of OMR xxx against certified and invoiced works which have been Due since June xxx, with all substantiation, including supporting documents showing under which payment application these completed works have been submitted by the Main Contractor to the Engineer together with proof of payment or lack thereof by the Employer.
If the requested information above is not received within 7 days of this letter we will understand that the Main Contractor has, in fact, no intention for amicable cooperation and no intention to make full payment against monies owed and due. We will then have no other recourse but to proceed with legal action against the Main Contractor for the recovery of the full amount, interest and loss of profit.
The proposal above is intended as a cooperation gesture and does not waive any of our rights under our Subcontract agreement.
As always, we remain at your disposal for any amicable discussion you wish to entertain in this respect.
All our rights are reserved.
Thanks,
On behalf of Xxx LLC
xxx
Project Manager