Our Ref: xxx
Date:
To
xxx Contracting LLC
P. O. Box xxx
Dubai, U.A.E.
Attention : Mr. xxx, Group Procurement Manager
Project : xxx Phase 2
Subject : Notice of Delay in release of L/C Documents
References : a) xxx dated 5th January xxxx
b) xxx dated 27th January xxxx
c) xxx dated 22nd February xxxx
d) xxx dated 04th March xxxx
Dear Sir,
We are writing following the receipt of the Post-dated L/C documents for November works and would like to note the following:
You are deliberately delaying the signing of LC documents for October, November & December works which have already been excessively delayed in being certified. We refer to previous letters on this subject and remind you the following:
- IPA#2 for month of November
In addition to having received delayed and post-dated L/C documents for the IPA#1 of the month of October as highlighted in our letter Ref. (d), we are again appalled to find that similarly to the month of October, you have again post-dated the L/C documents for the month of November which have been signed with a date of 30 April xxxx.
IPA#02 for the month of November was submitted to you on 20 November xxxx. Certification and release of LC documents was due 15 days after IPA in accordance with Clause 16.3 of our subcontract. Therefore, the due date for certification and release of LC documents was 05 December xxxx.
After multiple reminders and letters, you have only released to us signed LC documents on 16 March xxxx post-dated with a date of 30 April xxxx. You are again pushing the payment by another 45 days which would result in an actual payment date for IPA#2 of 27 September xxxx instead of the contractual payment date of 20 March xxxx. (192 days delay)
However, you are perfectly aware that the L/C which you have put in place also expires on 30 April xxxx (Friday), which is a non-working day, and that the bank will not accept the L/C documents to be submitted in advance of 30 April xxxx. Therefore you have intentionally signed the L/C documents for the month of November past the L/C expiry date, knowing full well that M/s xxx (Contractor Name) will not be able to submit the L/C documents to bank.
We remind you again that our payment terms are 120 days from the date of our IPA (Refer to Clause 16.3 of our subcontract)
Your continuous and recurring actions to push back, defer and avoid payment to M/s xxx (Contractor Name) is reprehensible. You are requested to immediately remedy this situation by providing current dated L/C documents and extending the L/C expiry date as applicable to allow us to secure our due payments.
- IPA#3 for month of December
IPA#03 for the month of December was submitted to you on 20 December xxxx. Certification and release of LC documents was due 15 days after IPA in accordance with Clause 16.3 of our subcontract. Therefore the due date for certification and release of LC documents was 04 January xxxx.
We record that you have till this dated failed to provide us with the signed LC documents for December xxxx, even though we have submitted our tax invoice.
In closing:
M/s BGC is systematically: 1) delaying certification 2) arbitrarily and without justification imposing short certification and deductions 3) intentionally delaying signing L/C documents and even 4) postdating such documents to dates where M/s xxx (Contractor Name) will not be able to submit, all in an effort to defer, delay, and reduce due payments to M/s xxx (Contractor Name).
We remind you that we have fully financed the project and have invested the full amount of the contract, while at the same time you have failed to release our advance payment in accordance with the terms of our Subcontract, and you are now employing every means and measure to delay the release of due progress payments.
The financial damage you have caused and are still causing M/s xxx (Contractor Name) is leaving us with no other options than to submit Tax invoice based on arbitrary and short certified amounts you are indicating on your unsigned and unsubstantiated draft payment certificate documents in the hopes of securing at least some form of payment, and in contrast you are signing postdated L/C documents to further defer due payments in complete disregards to your contractual and legal obligations.
We also remind you that issuance of our Tax invoices does not infer an acceptance by M/s xxx (Contractor Name) on short-certified amounts or on the arbitrary deductions included therein, nor should it be considered as an acceptance on the part of M/s xxx (Contractor Name) on the change in payment terms that BGC is implementing in the issuance of LC and in the release of L/C documents which are in direct breach of our Subcontract Agreement. Accordingly, M/s xxx (Contractor Name) will not be liable for any delay to the works caused by your actions above. Such delays are on account of BGC acts.
We again reserve our rights for an Extension of Time (EOT) equivalent to the same number of days by which our advance payment is delayed in addition to the delays occurring in progress payments certification as listed above. We further reserve our rights to claim for any and all damages resulting from your direct actions and your recurring evidenced bad faith in the execution of the Sub-Contract Agreement.
All rights are reserved.
Yours faithfully,
On behalf of xxx LLC
xxx
project Manager
