Notice of default.
Our Ref: xxx
Date: xxx
To : xxx Middle East,
P.O.Box xxx,
Dubai – UAE.
Attention : Mr. xxx
: Project Manager
Project : xxx Towers Project, Dubai
Subject: Notice of default.
References:
- xxx dated 17 October xxxx
Dear Ms. xxx,
We refer to the above reference letters and all preceding letters and emails.
- Default in settling progress payments:
We are writing again to put on record that XXXX remains in blatant and flagrant default on Xxxx progress payments. Your company is continuously failing to settle our progress payments as per our Sub-Contract Agreement payment terms.
- Our interim Payment Application (IPA No. 12) was due for payment on 30 October xxxx and remains unsettled.
- Default in payment is 174 days.
- Our interim Payment Application (IPA No. 13) was due for payment on 30 January xxx and remains unsettled.
- Default in payment is 82 days.
- Our interim Payment Application (IPA No. 14) was due for payment on 28 February xxx and remains unsettled.
- Default in payment is 53 days.
- Our interim Payment Application (IPA No. 15) was due for payment on 31 March xxx and remains unsettled.
- Default in payment is 22 days.
The total value of overdue payments is now AED xxx.
We remind you and record again that the all the previous payments from advance to IPA No. 11 were released with a delay of 180 to 378 days from the due dates.
Xxxx cannot sustain such an ongoing default in payment of around 3 million AED and cannot continue to finance your project. You are deliberately putting Xxxx in a position where we are unable to pay our suppliers and causing incalculable damage to our company supply chain. You are fully accountable of such acts.
- Delay in release of Advance Guarantee.
In addition to the above, even though our advance payment has been fully recovered in the PC No. 16, you are still declining to return the original Advance Guarantee No.xxx and its amendments along with an NOC from XXXX stamped and signed by the authorized signatories for onward submission to our bank as we have officially requested in our letter ref xxx dated 23 March xxx.
Your failure in issuing the NOC and returning the Original Advance Guarantee for cancellation is restricting our bank facilities and unduly imposing on Xxxx facilities costs without any reason or justification.
You shall be held fully accountable for such damaging actions, and for all costs Xxxx is incurring due to the above.
In closing
Xxxx will not be liable for any delay caused by your default on your contractual liabilities as such delays are on account on XXXX acts. In addition we reserve our rights under the Terms of our Sub-Contract Agreement for an Extension of Time (EOT) equivalent to the same number of days by which your progress payments are delayed in addition to 84 days for the default in the advance payment as recorded in previous correspondence.
We reserve our rights to claim for all other EOT claims related to design changes, delivery of FIM material, etc. as recorded in our letters referenced above.
We equally reserve our right to suspend the execution of the Sub‐Contract Agreement until full payment of our outstanding dues in reference to Article 247 of the UAE Civil Code and/or to terminate the Sub‐Contract Agreement in view of your uncontested and unjustified default pursuant to Article 272 of the same Code.
In the same line, Xxxx will not be held liable for any direct or indirect impact on the site progress and work completion. These liabilities reside with XXXX.
We urge you to settle all our overdue progress payments immediately and release the advance guarantee. Should you maintain in default and/not or get back to us with any reasonably clear settlement, we will have no other choice but to proceed with taking actions against you.
All Xxxx rights are reserved.
Yours faithfully,
On behalf of Xxxx LLC
Lucien Selfani
Projects Manager
Yours faithfully,
On behalf of xxx LLC
xxx
Project Manager