Notice of Default on Progress Payment and Work Certification
Our Ref: xxx
Date: xxx
To : xxx Construction Engg. Corp. (Middle East) LLC
P. O. Box xxx
Dubai, U.A.E.
Attention : Mr. xxx
Project : xxx – Zabeeel Second, Dubai, UAE.
Subject: Notice of Default on Progress Payment and Work Certification
Reference:
a) xxx dated 27 November xxxx
b) xxx dated 04 December xxxx
c) xxx dated 05 May xxxx
d) xxx dated 11 May xxxx
e) xxx dated 19 May xxxx
f) xxx dated 28 May xxxx
g) xxx dated 01 July xxxx
h) xxx dated 04 August xxxx
i) xxx dated 23 November xxxx
j) xxx dated 29 March xxxx
k) xxx dated 21 April xxxx
l) xxx dated 10 June xxxx
m) xxx dated 30 August xxxx
Dear Sir,
We are writing again to put on record that XXX remains in blatant and flagrant default on Xxx progress payments and certificates.
Our payment terms are very clear as noted in our Subcontract Agreement – Appendix 1, Interim Payment, Clause B “Payment shall be released within 60 days by PDC from the receipt of respective payment from the Employer by the Main Contractor for the same. The Employer shall certify the Main Contractor’s payment application within 28 days and pay within 15 days after certification”.
Your continuous disregard to the terms of the subcontract is unacceptable, and you remain in blatant default of your contractual obligations in relation to our certifications and our payments.
- Historical Default
- Payment against IPA No.16, progress work for the month of November xxxx.
You have received the payment from the employer on 28 January xxxx and our payment due date is 29 March xxxx.
The payment received from XXX was dated 30 May xxxx.
Your delay of releasing November xxxx payment is 62 days.
- Payment against IPA No.17, progress work for the month of December xxxx.
You have received the payment from the employer on 16 February xxxx and our payment due date is 17 April xxxx.
The payment received from XXX was dated 31 May xxxx.
Your delay of releasing December xxxx payment is 44 days.
- Payment against IPA No.18, progress work for the month of January xxxx.
You have received the payment from the employer on 28 March xxxx and that our payment due date is 27 May xxxx.
The payment received from XXX is dated 30 November xxxx.
Your delay of releasing January xxxx payment is 187 days.
- Payment against IPA No.19, progress work for the month of February xxxx.
You have received the payment from the employer on 28 April xxxx and that our payment due date is 27 June xxxx.
The payment received from XXX is dated 30 November xxxx.
Your delay of releasing January xxxx payment is 156 days.
- Current Default
- Payment against IPA No.21, progress work for the month of April xxxx.
According to our Payment Terms, the payment due date is 10 August xxxx. However, till date and after more than 100 days from the due date, XXX are intentionally holding our payment and not releasing the cheque with a clear and flagrant breach to our Subcontract Agreement.
- Certificate for progress work for the month of May till October xxxx.
You are intentionally withholding certification and preventing us from raising our Tax Invoice for the sole purpose of avoiding payment of the approved works.
You are in direct breach of the Terms of Payment, and you are instructed to release our work certification for the month of May-June xxxx amounting to AED 1,676,697.21 with immediate effect.
- Additional Default
Blanket short certification
You are also continuing to withhold 1% for final T&C as a breach of the Subcontract.
We again remind you that T&C of MEP systems on the project site is the responsibility of XXX.
Furthermore, the Subcontract allows a retention of only 5% to be released upon issuance of TOC as stated in Appendix 1 – Subcontract particulars. This 5% retention is already in place, and you are enforcing an additional retention of 1% in a direct breach of our Subcontract.
You are in direct breach of the Terms of Payment, and you are requested to release this unjustly withheld short certification with immediate effect.
- Detention Charges
You are solely liable of any and all costs imposed by trailer companies due to your failure to unload the pods in accordance with the terms of the Subcontract. Accordingly the amount of AED 226,050.00 must be certified and paid with immediate effect.
- Conclusion:
Xxx cannot sustain such an ongoing default in payment and cannot continue to finance your project. You are deliberately putting us in severe financial difficulties and causing incalculable damage to our company supply chain. You are fully accountable of such acts.
Xxx will not be liable for any delay caused by your default on your contractual liabilities as such delays are on account on XXX 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, Xxx will not be held liable for any direct or indirect impact on the site progress and work completion. These liabilities reside with XXX.
We urge you to settle all our overdue progress payments immediately and release all the pending certificates including the detention charges. 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.
Yours faithfully,
On behalf of xxx LLC
xxx
Project manager