Outstanding Payments / Missing Items

M/s xxx Pojects Co.

P.O. Box xxx, Riyadh, K.S.A

Tel : xxx

Fax: xxx

Attention:       Mr. xxx

                        Chief Executive Officer

Cc:                  Eng. xxx

                        Sr. Project Engineer

                        Eng. xxx

                        Project Manager

Project:          xxx Project -KSA      

Subject            :           Outstanding Payments / Missing Items

Dear Sir,

We acknowledge receipt of your email dated 16^th February xxx along with the lists of apparently missing items which is in response to our letter related to the outstanding payments of retention money for the above referred project.  While we acknowledge receiving the list of alleged missing items, we are surprised that these materials are planned to be back charged to Xxx(Name of the Sub-Contractor) Interiors.

Please be informed that Xxx(Name of the Sub-Contractor) Interiors has completed its works on this areas long time ago and handed over to the Client, subsequently, the Client has taken over the completed works without any notice of rejection on the completed works. Moreover, the premises has been occupied and used for its intended purpose which indicates that the handed over works have been satisfactorily accepted by the Client, consequently, the works have been paid by the Client in full with the exception of the retention money and the variation works.

Contractually, after acceptance of the works by the Client and utilization of the premises, any damages or missing items that may occur shall not be the responsibility of Xxx(Name of the Sub-Contractor) Interiors as this does not fall on faulty workmanship which is guaranteed under the contract. As previously stated on our previous correspondence, “in accordance with the Article 6.3 of the contract agreement, in case of any rejection by the Employer on delivered goods, the Owner shall notify the Vendor of such rejection within a reasonable time which shall not be more 30 days” which is not the case on the notification issued to Xxx(Name of the Sub-Contractor) Interiors. The notification issued to Xxx(Name of the Sub-Contractor) Interiors is related to missing and damaged items after the premises has been occupied and utilized.

In addition to the above paragraph, Article 15.1.1 Notice of Claims clearly states that “claims by either party must be initiated by written notice to the other party within 21 days after occurrence of the event giving rise to the claim or within 21 days after the claimant first recognizes the conditions giving rise to the claim….”. Moreover, as per Article 15.1 last sentence clearly states that “the responsibility to substantiate the claim shall rest with the party making the claim”, hence, unless and until proven that the missing and damaged items are the responsibility of Xxx(Name of the Sub-Contractor) Interiors, we will not be in a position to accept any deduction that may be applied on our account.

In view of the above, we reject any deduction that may be applied in our account due to the missing or damaged items as listed on the list provided, as the responsibility already resides with Client due to its occupancy of the premises and this is not under a faulty manufacturing or workmanship, rather it is due to any third party which is not guaranteed under the contract, therefore, we request for the immediate release of our due payments as per below details.

PHASE I: (Scope of Works under the Contract)

PHASE II: (Scope of Works – Repainting, under separate Purchase Orders)

Note: Attached herewith is the Statement of Accounts for Phase I & Phase II

This is for your information and necessary action.

Best Regards,

For: Xxx(Name of the Sub-Contractor) Interiors L.L.C.

xxx

Commercial Manager