ABS & Co is proud to announce a major success representing Habib Construction Services Limited in an arbitration against the Lahore Development Authority (LDA) concerning the Lahore Orange Line Metro Train Project (Package-I), one of the largest infrastructure projects in Pakistan.
The dispute arose from disagreements over the effective date of the Taking Over Certificate (TOC) and the Contractor’s entitlement to an Extension of Time (EOT) under the FIDIC 1987 Red Book conditions. Central to the case was the interface between civil works and the electrical & mechanical (E&M) works performed by another contractor, CR-NORINCO JV.
LDA had argued that the Claimant could not be deemed to have substantially completed the works until the project was fit for its “intended use,” asserting that the TOC could not be issued until E&M works were also completed. In support of its argument, the Respondent relied on Sub-Clause 31.1 of the FIDIC Conditions, which provides:
“The Contractor shall, in accordance with the requirements of the Engineer, afford all reasonable opportunities for carrying out their work to:
(a) any other contractors employed by the Employer and their workmen,
(b) the workmen of the Employer, and
(c) the workmen of any duly constituted authorities who may be employed in the execution on or near the Site of any work not included in the Contract…”
However, ABS & Co successfully argued that CR-NORINCO JV was not employed by the Employer (LDA) but by a separate public body—the Punjab Mass Transit Authority (PMA). Therefore, the interface obligations under Sub-Clause 31.1 were inapplicable. The Tribunal accepted this argument, holding that no positive obligation existed under the contract requiring the Claimant to coordinate its civil works with CR-NORINCO’s E&M scope.
The Tribunal found that:
- The Claimant had substantially completed the civil works as of April 29, 2019, entitling it to a TOC effective from that date;
- FIDIC Sub-Clause 31.1 did not apply, as CR-NORINCO was not a contractor of the Employer (LDA);
- There was no contractual obligation to delay TOC until the project was fully operational or the interface works were completed by CR-NORINCO;
- Respondent’s counterclaim for delay damages amounting to PKR 2.567 billion was inadmissible and dismissed.
As a result, the Tribunal declared that the effective date of TOC was 29 April 2019 when the Habib Construction Service completed civil works under Package-1. The Respondent was also directed to release the balance retention money of the contractor currently being held in an account being maintained by the Government of Punjab.
The ABS & Co team was led by Bakhtawar Bilal Soofi and Barrister Anza Mahmood Lilla with support from the firm’s Band-1 ranked construction disputes practice group. The result reinforces ABS & Co’s reputation as a market leader in large-scale construction and engineering disputes governed by FIDIC contracts.
