This was an application by the attorney general for the Falkland Islands (on behalf of the Islands' government) for the determination of a preliminary point of law in arbitration proceedings. Gordon Forbes and the government entered into a FIDIC fourth edition contract in 1997 to carry out some building works. A dispute arose that was referred to arbitration. Clause 53.4 of the FIDIC conditions required such claims to be verified by contemporary records. Gordon Forbes wanted to introduce witness statements into the arbitration covering those parts of the claim where no such contemporary records existed. The arbitrator refused an application by the attorney general inviting the arbitrator to rule on the meaning of "contemporary records", and also the extent to which witness statements could be used to cover the absence of such records.
The issue for determination was whether, on the true meaning of clause 53 of the FIDIC conditions, witness statements could be introduced into evidence to supplement contemporary records.

Reference

Acting Judge Sanders held that "contemporary records" in the FIDIC conditions meant original or primary documents or copies produced or prepared on or about the time giving rise to the claim. These documents could be produced by the contractor or the employer. However, contemporary records did not mean witness statements that were produced long after the event. As a result, where there were no such contemporary records in support of a claim, that claim must fail. Witness statements could only be used to identify or clarify contemporary records but not substitute them.

Postscript

Clause 53 of the FIDIC conditions deals with procedures for claims, and requires a contractor to give notice of claim to the engineer (with a copy to the employer) within 28 days of the event arising. It is not unusual for notices to be sent late, or indeed not be sent at all. Contractors often bring claims long after the event, and often a failure to service notices is not fatal to contractor claims. However, clause 53 requires the contractor to keep contemporary records in order to support the claim. It seems clear that a failure to keep those contemporary records will effectively mean that the contractor is unable to support his claim and that the claim will fail. The case emphasises the need not only to give notice at the time of the claim, but also, and perhaps more importantly, to ensure that contemporary records are kept in support of the claim. For further information, call Tony Francis or Nicholas Gould on 0207 956 9354