Response to Delay in Delivery of PODs
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 : Response to Delay in Delivery of PODs
References : (a) BGC letter ref: xxx dated 17 Aug xxxx
(b) M/s xxx (Contractor Name) letter ref: xxx dated 6 Aug xxxx
(c) M/s xxx (Contractor Name) letter ref: xxx dated 19 July xxxx
(d) M/s xxx (Contractor Name) letter ref: xxx dated 13 Aug xxxx
(e) BGC letter ref: xxx dated 14 July xxxx
(f) M/s xxx (Contractor Name) letter ref: xxx dated 8July xxxx
(g) M/s xxx (Contractor Name) letter ref: xxx dated 9 Aug xxxx
(h) M/s xxx (Contractor Name) letter ref: xxx dated 9 Aug xxxx
Dear Sir,
We are in receipt of your letter Ref. xxx dated 17 August xxxx regarding the alleged “Delay in Delivery of PODs”.
We reject the content of your letter mentioned hereinabove in its entirety and respond as follows:
First, your reference to the “mutually agreed schedule” is misguided and denied. You are precluded from relying on any such schedule to claim any delay on our account for the simple fact that no such schedule was ever finalized and/or jointly agreed between the Parties.
In this respect, we refer to Clause 7.1 of Subcontract Agreement, which clearly provides that “the program of deliveries shall be mutually agreed by the Contractor and Subcontractor”.
Said provision is unequivocal and expressly underlines that there was no “mutually agreed schedule” at the time of the issuance of the Subcontract Agreement to M/s xxx (Contractor Name) on 14 July xxxx.
Second, and as regards the programme dated 14 May xxxx found under Appendix 8 of the Subcontract Agreement (“Programme”) we assert that:
- The Programme was a tentative draft subject to the Parties’ agreement as underlined therein and written on it; and
- The Programme was suggested two months prior to the commencement date.
As a matter of fact, M/s xxx (Contractor Name) insisted that it would require at least 3 months for the first delivery of PODs throughout the Subcontract Agreement’s negotiations (Ref: UP‐1727/LET‐1065‐20/LS‐at- point 2 of the letter).
The Programme, as you very well know, was a tentative procurement and delivery schedule based on available materials, in which we apprehended to start with the delivery of PODs after 3 months i.e. on 16 August xxxx on the premise that the Subcontract Agreement would be issued and executed by 8 June xxxx at the latest to allow M/s xxx (Contractor Name) to start placing purchase orders.
However, our Subcontract Agreement was only released by M/s Beaver Gulf on 14 July xxxx, as in two months after we issued our tentative schedule and more than six months from our initial discussion during which we underlined the necessity of having a finalized and executed subcontract agreement enabling us to deliver PODs.
This is further confirmed by the fact that the tentative Programme presented in May xxxx apprehended for the first delivery to take place in August xxxx.
Additionally, we informed you as early as 5 days following the issuance of the Subcontract Agreement that it would be impossible and impractical for M/s xxx (Contractor Name) to deliver the PODs on 16 August xxxx in view of the current conditions of approvals (Ref: UP-1727/LET-1048-20/LS-at).
As a result, the Programme could not have been and was not de-facto agreed between the Parties. Thus, you have failed to issue the Subcontract Agreement on time, and we hold you liable for any legal consequences arising out of this failure.
Third, since the tentative Programme was not agreed, and (i) in view of ensuring the success of your project, (ii) in good faith; and (iii) in due compliance with its obligation under Clause 2.3 of the Subcontract (General Conditions), the Claimant submitted once more a programme for the Parties’ agreement in its letter of 13 August xxxx (Ref: xxx).
The programme suggested thereunder accounted for and resolved crucial outstanding issues such as and without limitation:
- Your unnecessary and unjustified delay in signing the Subcontract Agreement and thus postponement of the commencement date[1];
- The impact of the recent and unexpected antidumping duties imposed by the UAE legislator on orders of floor and wall tiles originating from named countries;
- Your delay in providing us with the Engineers comments on M/s xxx (Contractor Name)’ material submittals and or the Engineer’s approval on the same for several items (in which M/s xxx (Contractor Name) has no hand); and
- Your delayed confirmation as to whether you will rectify the slab cut‐outs on site to match the bathtub drain enabling M/s xxx (Contractor Name) to start casting the POD bases.
However, for reasons best known to you, our suggestion was disregarded.
Instead, you have chosen to harass us with notices of delays that lack any contractual foundation. By way of example, you have sought to establish our delay on the same day on which you (belatedly) reverted back to us with the counter-executed version of the Subcontract Agreement, which contained no finalized schedule and on the mere basis of the tentative Programme (Ref: xxx dated 14 July xxxx).
Based on the foregoing and considering your evidenced bad faith in the execution of the Subcontract Agreement (in total disregard of your legal duties under Article 246 of the UAE Civil Code), should you maintain your refusal to finalize and agree a programme that accounts all outstanding issues (none of which attributable to us) such as the one suggested in August xxxx, the Subcontract Agreement shall be deemed as repudiated by you and you shall be liable for the same.
We hope to avoid the above and invite you, in good faith, to discuss and finalize the delivery programme within close of business Monday 24 August xxxx.
Our rights are fully reserved.
Yours faithfully,
On behalf of xxx LLC
xxx
project Manager