FIDIC is no doubt aware that in English law liquidated damages are usually held to be an exclusive remedy for delay and, in the event of termination the usual position is that liquidated damages will no longer be payable by the Contractor (the Employer having removed the opportunity for the Contractor to complete). Of course at the date of termination there may be "accrued" programme delay where delay damages have not yet fallen due (e.g. in a situation where the Contractor is 10 weeks behind schedule at the date of termination but only 1 week of delay damages has fallen due).
This often gives rise to discussion as to whether unliquidated damages can be claimed for the losses resulting from this "accrued" delay and if so, whether such unliquidated damages are capped to the agreed liquidated damages figure. It is submitted that these questions are usually decided as a matter of construction of the specific clause in question and we do not believe that Sub-Clause 8.7 is completely clear on this point.
In the second paragraph the clause provides that the liquidated delay damages sum shall "be the only damages due from the Contractor for such default [delay] other than in the event of termination under Sub-Clause 15.2…".
Therefore, in the event of termination the clause contemplates that additional damages can be claimed from the Contractor for the default of delay; the question is, what are these additional damages?
This provision could mean that (1) in the event of termination prior to completion of the Works unliquidated damages could be claimed for the breach (delay); or (2) that in the event of termination arising from the delay pursuant to Sub-Clause 15 (c) the Employer can claim additional costs pursuant to 15.4 (additional costs of completing the works etc.) or (3) both (1) and (2).
FIDIC should therefore consider clarifying this drafting. We believe that following a termination pursuant to 15.2 the Employer should be able to claim unliquidated damages which include additional costs pursuant to Sub-Clause 15.4.