Performance Certificate

Performance Certificate
Performance Certificate is the certificate issued under sub-clause 11.9 of the FIDIC contract
to constitute acceptance of the Works by the Engineer. This will enable the Contractor to
submit to the Engineer within 56 days, a draft final statement with supporting documents.
When the Engineer verifies the statement, the Contractor will issue a final statement (sub-
clause 14.11) and a discharge for full and final settlement (sub-clause 14.8). In addition,
insurance coverage will no longer be required to be maintained by the Contractor (sub-clause
18.2).
The Engineer will issue the Performance Certificate within 28 days after the latest of the
expiry dates of the Defects Notification Period or as soon as the Contractor has completed
and tested all the Works, including remedying any defects. The Defects Notification Period is
the period for notifying defects and/or damage in the works or a section or a part (as the case
may be) under sub-clause 11.1 [Completion of Outstanding Work and Remedying Defects],
as stated in the contract data (if not stated, one year), and as may be extended under sub-
clause 11.3 [Extension of Defects Notification Period]. This period is calculated from the
Date of Completion of the works or section or part.
The Defects Notification Period starts when the Engineer issues the Taking Over Certificate
if works are completed according to the contract. The Contractor may submit a notice to the
Engineer no earlier than 14 days before expected completion or requesting take over (sub-
clause 10.1).1
11.9 Performance Certificate.

The Performance Certificate provides written confirmation that the Engineer has completed
his obligations and this document constitutes “acceptance of the Works.”
The definition of Performance Certificate at Sub-Clause 1.1.3.8 is singularly unhelpful. It
defines the Performance Certificate as follows: “Performance Certificate” means the
certificate issued under Sub-Clause 11.9 [Performance Certificate].”
The Performance Certificate is important in that it is linked to the Employer’s obligation to
return the Performance Security within 21 days after receiving the Performance Certificate
(Sub-Clause 4.2). It is also linked to the Contractor’s right of access to the Site (Sub-Clause
11.7), the obligation on the Contractor to issue the draft final statement (Sub-Clause 14.11),
and some of the Contractor’s insurance obligations (Sub-Clauses 18.2 and 18.3).
The Performance Certificate should be issued within 28 days after the latest of the expiry
dates of the Defects Notification Periods or as soon thereafter as the Contractor: (1) has
supplied all the Contractor’s Documents; (2) completed and tested all the Works; and/or (3)
remedied any defects.
It should be noted that under Sub-Clause 11.3 the Defects Notification Period shall not be
extended by more than two years. Sub-Clause 11.3 was included to prevent an Employer
from indefinitely extending the Defects Notification Period and thereby preventing the issue
of a Performance Certificate.
Robert Knutson16 raises the interesting question of whether under English law the issuing of
this Certificate is final and conclusive as to the Contractor’s satisfactory performance of the
Contract and thus stops the Employer from subsequently alleging that the work was
defective. He states that there is a line of English authorities on different forms of Contract
1
https://pmweb.com/ensure-issuing-performance-certificate-construction-contracts-accordance-relevant-
contract-clauses/
and arbitral decisions in international contracts to this effect and that the FIDIC language
found here allows such arguments to be made, although their efficacy may be tempered by
Sub-Clause 11.10. In Matthew Hall Ortech Ltd v Tarmac Roadstone Ltd17 the court had to
consider whether the Final Certificate issued under an IChemE Red Book was conclusive
evidence that the works had been completed in accordance with the contract. The court held
that it was. However, the contract stated that the Final Certificate was “conclusive
evidence ... that the Contractor had completed the Works and made good all defects.” The
wording under Sub-Clause 11.9 is substantially different.
The alternative view is that there is nothing within the Performance Certificate that indicates
that it is intended to be conclusive evidence of the facts certified. Without such a clear
statement the Performance Certificate does not become final and conclusive. In AG v Wang
Chong Construction Co Ltd18 the Hong Kong Court of Appeal stated that if the parties to a
contract intended the completion certificate to be final and conclusive such that an employer
would be left without a remedy even for latent defects of a very serious nature, the certificate
would have to set out in the clearest possible terms that this was what was intended.
Similarly, Lord Diplock in Gilbert-Ash (Northern) Ltd v Modern Engineering (Bristol) Ltd19
stated:
“So when one is concerned with a building contract one starts with the presumption
that each party is to be entitled to all those remedies for its breach as would arise by
operation of law …To rebut that presumption one must be able to find in the contract
clear unequivocal words in which the parties have expressed their agreement that this
remedy shall not be available in respect of breaches of that particular contract.”

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11.9 Performance Certificate.

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