Our Ref: xxx
Date:
To
xxx Contracting LLC
P. O. Box xxx
Dubai, U.A.E.
Attention : Mr. xxx, Group Procurement Manager
Project : : xxx Tower, Dubai – U.A.E.
Subject : Notice of delay in establishing the Letter of Credit
Reference : a) M/s xxx (Contractor Name) letter xxx dated 21 January xxx
b) M/s xxx (Contractor Name) letter xxx dated 04 February xxx
Dear Sir,
We refer to our letter reference (b) dated 04 February xxx and the Main Contractor reply reference xxx dated 11 February xxx.
This is to record that M/s xxx (Contractor Name) has entered into a Sub-Contract Agreement with xxx Contracting LLC based on the Terms of Payment stipulated in the Sub-Contract Agreement #C-xxx/20 dated xxx clause 16 (b) Payment.
First, in accordance with our Sub-Contract Agreement progress payment is to be made through Letter of Credit (100 days credit). M/s xxx (Contractor Name) has not agreed, at any time, to change the Payment Terms stipulated under our Sub-Contract Agreement.
Second, The Main Contractor is in sustained and deliberate violation of the Terms of the Sub-Contract clause 16 (b) Payment and is therefore in clear breach of the Sub-Contract Agreement.
Third, your statement that you have opted to prepare CDC payment is incorrect since the alternative form of payment you have opted to prepare is postdated cheques which is in violation of the secure Terms of Payment stipulated in our Sub-Contract Agreement.
Fourth, M/s xxx (Contractor Name) has negotiated and financed its payments to its vendors and supply chain on the basis of a secure mode of payment (L/C) from the Main Contractor as stipulated in our Sub-Contract Agreement. Consequently, your actions are both damaging and disrupting to M/s xxx (Contractor Name) and its supply chain.
Fifth, any receipt by M/s xxx (Contractor Name) of delayed payments made in a way other that stipulated in the Sub-Contract clause 16 (b) Payment, in order to alleviate our obligations and limit damages to our suppliers and employees does not infer acceptance in the change of the Payment Terms, nor does it relieves the Main Contractor of his obligations under the Sub-Contract Agreement.
Finally, while we have continuously supported the Main Contractor, we will not accept any statement from the Main Contractor alleging that M/s xxx (Contractor Name) is attempting to evade from its contractual responsibilities when the Main Contractor is unilaterally and blatantly changing the Payment Terms of our Sub-Contract to his own benefit, directly resulting in financial damage to M/s xxx (Contractor Name) and to our supply chain.
We reiterate that M/s xxx (Contractor Name) will not be liable for any delays resulting from your failure to adhere to the Terms of the Sub-Contract Agreement as highlighted above, and we reserve our right to claim for an Extension of Time (EOT) equivalent to the same number of days by which our advance payment and progress payments are delayed.
Yours faithfully,
On behalf of xxx LLC
xxx
project Manager
