engineering & law
Suspension
Water ResourcesOfManagement
Work: In
Malaysia
An – The Way Forward
Overview
By Ir. Harbans Singh K.S., BE (Mec) S’pore, P.E., C. Eng,
LLB (Hons) London, CLP, DiplCArb
S
uspension represents a contingency that can be
made available to both parties to the contract in
certain defined situations whereby the progress
of the work can be temporarily halted. The
reasons for such freezing of rights and obligations under
the contract are many and are furthermore dependent upon
the identity of the particular party invoking the said
mechanism. In practice, the common grounds giving rise
to suspension vary from issues connected with financial
matters 2 at one end of the spectrum to the vagaries of the
weather at the other end. Despite its importance in the
implementation of a typical contract, little or no emphasis
has been placed by local drafters of conditions of contract
3
to expressly empower the parties to exercise the right of
suspension. Even where prudent draftspersons have
envisaged its application, such rights are usually one-
sided i.e. permitting only the employer and not the
contractor to invoke such a remedy. Perhaps it is timely
for the engineering/construction industry to give due
recognition to the above-mentioned contingency by
incorporating express stipulations vis-à-vis the subject
at hand; a move that definitely will not stultify but on
the contrary will auger well for the balancing of the rights
between the parties. In Malaysia, such a shift in thinking
is reflected in some standard forms, such as the CIDB
Standard Form of Building Contract (2000 Edition) 4, the
Putrajaya Conditions of Main Contract 5 and the IEM.ME
1/94 Forms 6. However, it is necessary to take the exercise
one step further by affording all parties to the contract
reciprocal rights to the like effect.
MEANING OF SUSPENSION
Synonymous with the term ‘postponement’, suspension
has been variously defined in different texts; some
common dictionary examples are listed hereunder:
7
● The Longman Dictionary of Contemporary English
holds the word ‘suspension’ to mean:
‘…. the act of officially stopping something from
continuing for a period of time ….’
● Mozley and Whiteley’s Law Dictionary ascribes a rather
concise meaning 8 as reflected herebelow:
‘…. a temporary stop or cessation of a ……. right’
BULETIN INGENIEUR
Drawing upon the above definitions, it can be concluded
that the word ‘suspension’ entails the following meanings
and consequences within its ambit:
● By suspending the works under the contract, the parties
merely stop or cease all work related activities on a
temporary basis. The contract, inclusive of all rights
and obligations thereunder, however subsists during
the period of suspension;
● In a similar vein, by suspending the contract itself there
is a moratorium on all facets, rights and obligations
under the contract inclusive of the performance of all
work related activities. In essence, the ‘suspension of
the contract’ is, prima facie, wider in scope and effect
than the limited ‘suspension of works’ under the
contract only; and
● The alternative description of ‘postponing’ works or
the contract has fundamentally a similar meaning and
effect as suspension. It involves either the ‘works’ or
the rights and obligations of the respective parties being
held in abeyance for the period of suspension.
SUSPENSION: PRINCIPAL TYPES
Logically, both the parties to the contract should be
able to exercise the power of suspension, if and when
necessary. This is subject to the express terms of the
agreement that they have entered into. Hence, in the
engineering/construction industry, the parties who may
be vested with such powers include the employers, main
contractors, sub-contractors, suppliers and the like.
1. Director, HSH Consult Sdn. Bhd.
2. See Channel Tunnel Group Ltd. v Balfour Beatty Con-
struction Ltd. & Others [1992] 2 All ER 609, [1993] 32
Con LR1.
3. Including the standard forms
4. Clause 19
5. Clause 58.0
6. Clause 29
7. At P 1453
8. 9th Edn. by J.B. Saunders at P 332.
24
engineering & law
In the context of an ‘employer-main contractor’
agreement the main types of suspension that can be
encountered in practice include, inter alia, the following:
A. Employer Ordered Suspension
This species of suspension represents the bulk of
the suspensions effected in the industry as express
provisions permitting their realization are not only
included in standard forms of conditions of contract
but also enshrined in the many ‘bespoke’ forms used.
B. Contractor Invoked Suspension
In the local context, though rarely practiced in
agreements employing the standard forms of conditions
of contract, its usage in projects involving larger
institutional employers utilising ‘bespoke’ forms of
conditions of contract is slowly increasing in frequency.
C. Contractor Requested Suspension
More commonly seen in agreements where only
the employer is given the power to suspend works e.g.
‘package deal’ types of contracts, nominated sub-
contracts, etc., under this species of suspension, either
the contract provisions expressly permit the contractor
to request the contract administrator to allow works
to be suspended on particular grounds e.g. need to
reassess the design, adverse weather affecting quality/
safety of work, etc. or the contractor persuades the
contract administrator to order suspension ‘for the
proper construction and completion of the works’ 9.
D. Constructive Suspension
Strictly, this applies where any act or omission of
the employer has the effect of impliedly halting the
contractor from undertaking his obligations or
suspending the works for an unreasonable time 10. A
local example of this is clause 29.1 of the IEM.ME 1/
94 Form where the contractor is deemed to be instructed
to suspend work if he is prevented by the engineer
from delivering or erecting Plant in accordance with
the programme.
GENERAL RULE ON SUSPENSION
It is trite law that unless there is an express term
permitting suspension enshrined in the contract, parties do
not have a right to either:
● Suspend work under the contract, or
● Order work to be so suspended
Hence, in essence, there is no right at common law to
effect the above 11. The only other permissible way to effect
suspension is by the variation of the contract through
mutual consent.
BULETIN INGENIEUR
The consequences of the abovementioned general rule
include, inter alia, the following:
● The employer does not have a power to order the
contractor to suspend work under the contract unless
there is an express term in the contract empowering
him so to do 12;
● Likewise, a contractor cannot suspend work under
the contract if he so desires in the absence of an
express provision permitting him to do so. The
Channel Tunnel Group Ltd. v Balfour Beatty
Construction Ltd. & Others 13;
● Should the contractor proceed with the suspension
of work, this may constitute a breach of contract on
his part e.g. in failing to proceed ‘regularly and
diligently’ with the work: Canterbury Pipelines Ltd. v
Christchurch Drainage Board 14. Such a breach may
further entitle the employer to determine the
contractor’s employment provided there is an express
term making provision for the same and the said
ground is one of the default’s stipulated therein e.g.
clause 25.1(i) and (ii) PAM ‘98 Forms (With and
Without Quantities) Editions;
● There must be actual and not just a virtual suspension
of work: JM Hill & Sons Ltd. v Camden LBC 15.
Furthermore, a mere threat to suspend work has been
held on the facts not to constitute a repudiatory breach
of contract: F. Treveling & Co. Ltd. v Simplex Time
Record Co. (UK) Ltd. 16; and
● In situations, where the contractor desires to respond
appropriately to the employer’s alleged defaults e.g.
failure to pay on interim certificates, etc. in the
absence of express provisions permitting him to
suspend works, other than arbitration and/or
litigation, the only option he may have is to determine
his employment under the contract: DR. Bradley (Cable
Jointing) Ltd. v Jefco Mechanical Services 17. This
matter was further explored in the New Zealand case
9. See ‘The ICE Design and Construct Contract: A Commentary’
by. B. Eggleston at P 235.
10. See ‘Law and Practice of Construction Contract Claims’ by
Chow Kok Fong at P 170.
11. See also ‘100 Contractual Problems and Their Solutions’ by
R. Knowles at P 87. See also Kah Seng Construction Sdn.
Bhd. v Selsin Development Sdn. Bhd. [1997] 1 CLJ Supp. 448.
12. See ‘An Engineering Contract Dictionary’ by Vincent
Powell-Smith at P 546.
13. [1992] 2 All ER 609, [1993] 32 Con LR 1.
14. [1979] 16 BLR 76.
15. [1980] 18 BLR 31
16. [1981] Unreported.
17. [1989] Unreported. See also Kah Seng Construction Sdn.
Bhd. v Selsin Development Sdn. Bhd. [1997] 1 CLJ Supp.
448.
26

of Canterbury Pipelines Ltd. v The Christchurch
Drainage Board where the court of appeal stated: 18
‘In such cases, if the contractor cannot or does not
wish to rescind and cannot prove impossibility or its
equivalent, he will be left with whatever remedies
regarding the recovery progress payment may be
available to him under the contract’.
In view of the above judicial pronouncements spelling
out the court’s approach to this matter, the issue of
suspension must be handled with due circumspect and
vigilance.
EXPRESS CONTRACTUAL PROVISIONS
General
From the foregoing discussion it is apparent that most
standard forms of conditions of contract make no provision
whatsoever for the eventuality of suspension,
concentrating instead on determination or termination of
employment. Only as of recent have the newer standard
forms attempted to specifically incorporate suitably drafted
clauses to cater for the suspension of works; notable
examples of which are as listed herebelow.
● CIDB Standard Form of Contract For Building Works
(2000 Edition): The main provision is clause 19 entitled
‘Suspension’.
● IEM.ME 1/94 Form for Mechanical and Electrical
Works: The applicable express provision is clause 29:
Suspension of Works, Delivery or Erection.
● PUTRAJAYA Conditions of Main Contract: Under the
instant form, the issue of suspension is dealt with
vide clause 58.0 19.
Comments on the Provisions
Cognisance should be taken of the following matters
pertaining to the express contractual provisions:
● Except for clause 19 CIDB Form (2000 Edition), clause
29 IEM.ME 1/94 Form and clause 58.0 Putrajaya
Conditions of Main Contract, the rest of the common
local standard forms of conditions of contract e.g.
the JKR Forms, the PAM ‘98 Forms, the IEM.CE 1/89
and CES 1/90 Forms, the Putrajaya Conditions of
Nominated Sub-Contracts, etc. have no express
contractual provisions covering the issue of
suspension. Hence, for the latter forms neither the
employer has an express power to order suspension
nor the contractor the right to suspend works under
the contract;
● Even where express stipulations have been enshrined
in the conditions of contract, it is obvious that these
are blatantly one-sided i.e. they are intended to
empower only the employer to suspend or order
BULETIN INGENIEUR
engineering & law
suspension of the works. The contractor has no similar
rights although under sub-clause 29.1 of the IEM.ME
1/94 Form, the contractor has a limited avenue of
suspension under the so called ‘deemed’ or
‘constructive’ suspension provision. However, even
the latter is of very restricted nature and application;
● The common express provisions as listed hereabove
essentially encompass the following facets of the
suspension mechanism:
1. The power of the contract administrator to order
suspension;
2. The circumstances or situations in which such
power can be exercised;
3. The formalities pertaining to the ordering of the
suspensions;
4. The procedural requirements vis-à-vis issues
consequent to the suspension such as
responsibilities of the contractor, cost and time
implications, effect of prolonged suspension and
resumption of work following suspension.
5. Miscellaneous formalities and procedural
requirements.
● Prima facie, the said express provisions give the
contract administrator an apparently wide or
unfettered power to order suspension of work in terms
of scope, timing and manner.
● The duty of compliance to a properly issued or
contractually valid suspension order is on the
contractor; and
● The form of the suspension order is envisaged to be
in an express mode i.e. through a formal instruction
issued by the contract administrator. However, the
IEM.ME 1/94 Form vide sub-clause 29.1 makes
provision for the so called ‘deemed’ suspension order
in the limited circumstances spelt out in that sub-
clause. However, such a mode is unique only to the
said IEM Form.
PRINCIPAL PURPOSES FOR SUSPENSION
General
Contrary to popular belief, suspension is, and remains
a convenient mechanism at the disposal of the contracting
parties to address specific issues during the currency of
the contract without incurring liability for breaching the
contract in any way. In most instances, suspension affords
18. [1979] 16 BLR 78.
19. Entitled ‘Suspension of Works’.
27
engineering & law
the parties the necessary opportunity to take a ‘breather’
i.e. freeze the contract or hold it in abeyance whilst
reflecting upon or reassessing particular issues before
resuming or restarting the contract with the benefit
obtained therefrom.
The necessity for such an eventuality arises in most
contracts either by chance or by design. Specific
problems occurring during the progress of the works
e.g. the breakdown of the contractor’s quality assurance
system, the reassessment of the design by the
consultants, etc. may compel a suspension to be
effected. Factors beyond the parties’ control e.g.
governmental policy changes, legislative amendments,
etc. may on other occasions trigger a requirement for
an appropriate postponement of rights and obligations
under the contract inclusive of the progress of work.
Be that as it may, in the final analysis, there are in
most contracts compelling grounds or reasons for both
the employer and the contractor 20 at one time or another
to initiate or resort to the suspension of works.
Although there are in specific instances common
reasons or grounds for effecting the same, in general
the principal purposes show marked variance between
the different parties. Owing to this distinct difference,
each of the principal parties will be dealt with
separately.
Employer’s Purpose
A review of the common express contractual
provisions 21 reveals the fact that though such
stipulations give the contract administrator an
apparently absolute discretion to suspend works under
the contract as he deems necessary, the rationale behind
such exercise of power is not specified. Prima facie,
such clauses therefore appear one-sided and on the face
value inequitable. However, if one were to delve deeper
into the matter, it is apparent that there may be valid
grounds for the employer to resort to suspension in
any particular situation. Various reasons have been
proffered by leading authorities 22 in the engineering/
construction field to justify the employer’s invoking
the instant mechanism; a summary of which is appended
herebelow:
● Reassessment of the design of the works;
● Change in the employer’s requirements;
● Adverse weather conditions affecting the safety
and/or quality of the works or people engaged
thereon;
● Breakdown of the contractor’s quality assurance
system;
● Contractor’s default or unsatisfactory performance;
● Access and possession of site problems;
BULETIN INGENIEUR
● Site safety considerations;
● Unforeseen conditions encountered;
● Unexpected restrictions imposed on the works;
● Pre-planned closures; and
● Changes in authority requirements and/or legislative
requirements.
A more compelling reason of late is the financial
difficulty faced by employers in terms of temporary lack
of funds or cash flow problems. Though prima facie, a
seemingly valid reason prompting the justification of
suspension, it has been dismissed as an abuse of the said
provision by many authorities. As an example, Eggleston
opines 23:
‘From the clause ………. and its wording it is clearly
intended principally for practical matters relating to
when and how the works are constructed and not to
financial matters’
Despite the above-mentioned position, it has not
prevented employers from expressly listing temporary lack
of funds as one of the relevant suspension events. In
tandem with contractual stipulations of the like of
‘Determination by Convenience’, suspension on financial
grounds is beginning to feature commonly in ‘bespoke’
forms on the local scene.
Contractor’s Purpose
It is obvious that none of the common local standard
forms of conditions of contract makes any provision
whatsoever for the contractor to suspend works under
the contract no matter how valid a ground he may have.
However, this does not mean that the said deficiency
should, and has been overlooked by fair-minded
practitioners inclusive of the contractors themselves. A
good proportion of ‘bespoke’ forms afford the contractor
a commensurate right to suspend works; these being
premised on the following principal grounds:
● Failure of the employer to pay on interim certificates;
● Reassessment of design of works where the design
element is included in the contractor’s scope of
work 24;
20. And the sub-contractor.
21. See hereabove.
22. See ‘The ICE Design and Construct Contract: A
Commentary’ by B. Eggleston at P 235.
23. Ibid. Whilst dealing with clause 40 of the ICE Design and
Construct Contract Conditions.
24. E.g. for works under P.C. Sum or ‘Package Deal’ types of
contracts.
28

● Adverse weather conditions affecting the safety and/
or quality of the works or people engaged thereon;
● Specific defaults of the employer or the contract
administrator 25;
● Site safety considerations; and
● Unforeseen conditions encountered;
Of the many grounds listed hereabove, failure of the
employer to effect payment remains the main reason where
contractors feel entitled to suspend works until the
employer remedies the default. This is especially so where
the conditions of contract do not make failure to pay a
ground for permitting the contractor to determine his
employment.
PROCEDURAL REQUIREMENTS
General
For the suspension to be tenable at law not only must
it comply with the substantive matters but also the
procedural requirements expressly stipulated in the
contract. Otherwise it may constitute a breach of contract
on the part of the party initiating the suspension with its
dire consequences. With the said proposition in mind, it
is necessary to examine the procedural requirements vis-
à-vis the issue of suspension from the employer’s point
of view since such a remedy seems to be available only to
the latter in the applicable standard forms 26.
Suspension Procedure
Under the CIDB Form, IEM.ME 1/94 Form and
Putrajaya Conditions of Contract, the following principal
procedural requirements can be noted:
● The respective conditions of contract empower only
the contract administrator to order a suspension of
the works. Hence, such a body would include:
1. The ‘Superintending Officer (S.O.)’: CIDB Form
2. The ‘Engineer’: IEM.ME 1/94 Form; and
3. The ‘Employer’s Representative (E.R.)’: Putrajaya
Conditions of Main Contract
It should be appreciated that none of these forms
bestow a commensurate power on the employer
himself. Hence, he must act through the contract
administrator;
● The contract administrator may suspend work only
by means of an instruction issued formally to the
contractor. Although clause 58.01 of the Putrajaya
Conditions uses the terminology of a ‘written order’,
it essentially refers to an instruction in line with the
BULETIN INGENIEUR
engineering & law
other forms. Presumably the suspension instruction
must comply with the relevant formalities and
procedural requirements applicable to a typical
instruction under the particular form of contract;
● By virtue of the instruction, the contract administrator
is permitted to order suspension of the execution of:
1. Part of the works; or
2. The whole of the works
The above includes the suspension of the delivery of
plant or equipment to site and the erection of such
items already delivered to site 27.
● The contract administrator may issue such instruction
as and when he so desires and for such time or times
and in such manner as in his absolute discretion is
considered necessary. He does not need to give any
reason/justification to the contractor for the exercise
of the same. Hence, the contract administrator’s power
to order suspension appears indeterminate and
unfettered. This is subject to an implied obligation
to exercise the absolute discretion bestowed on him
on objective grounds although, prima facie, appearing
purely subjective. Should the discretion be abused
i.e. ordering of suspension on purely financial grounds
where such grounds are not enshrined in the contract,
the contractor has a right to mount a challenge on
the basis of mal-administration of the contract;
● The instruction to suspend work must stipulate
essential matters such as the extent and nature of the
work involved and the timing for the commencement
of the suspension. In emergency situations e.g. where
safety issues are concerned, such suspension orders
may be of immediate effect. For others e.g. need to
reassess design, change in employer’s requirements,
etc. a reasonable notification period is usually given
28
; and
● Cognisance should be taken of the fact that the
instruction to suspend work may not necessitate the
issue of a formal instruction at all under certain
conditions of contract or in the case of ‘constructive’
suspension. As an illustration, by virtue of clause
29.1 of the IEM.ME 1/94 Form, should the engineer
prevent the contractor from delivering or erecting
Plant in accordance with his approved programme,
this is deemed to be considered to be an instruction
to suspend. Therefore, one should be mindful of the
precise wording of the applicable clause and the
25. A good example would be the specified events in the CIDB
Form (2000 Edition).
26. Furthermore, it is the most common form of suspension in
practice.
27. See clause 29.1 IEM.ME 1/94 Form.
28. E.g. between 7 to 14 days as appropriate.
29
engineering & law
implied effects of the parties’ acts or omissions in
relation to their rights and obligations under the
contract.
Contractor’s Duties Following Suspension
Upon receipt of the order to suspend works from the
contract administrator, the contractor has forthwith to
adopt certain measures consequent to the said order. These
measures must be in line with the relevant contract
stipulation e.g. clause 19.1 (a) of the CIDB Form (2000
Edition) which reads:
‘The contractor shall on an instruction of the
Superintending Officer, suspend the execution of the
works or any part of the works …… and shall during
such suspension, properly protect and secure the works
or such part of the works so far as is necessary or in
accordance with the instruction of the Superintending
Officer’.
Since the contractual provisions are never complete
and exhaustive, the bulk of the required measures have
to be established by necessary implication. The essential
procedural arrangements would generally include 29:
1. Contractor to Suspend Works
The initial response of the contractor should be to
comply with the suspension order effective on the
date named in such order by discontinuing all works
under the contract. This would entail basically:
a) Halting all construction, erection, installation, etc.
related activities;
b) Suspending the ordering, fabrication off-site,
delivery to site, etc. of all material, plant and
equipment; and
c) Ceasing to undertake all other activities or
operations in relation to the works under the
contract e.g. design work, appointment of sub-
contractors, etc.
Since most contractors would have farmed out the
bulk of the elements under the contract to a host of sub-
contractors/suppliers, it would be incumbent for the former
to accordingly initiate the commensurate suspension
downstream. This exercise should not pose any problem
as most contractors normally tie their sub-contractors/
suppliers on a ‘back-to-back’ basis.
2. Contractor to Demobilise
In tandem with the cessation of the activities
related both to site work and ‘off-site’ disciplines, it
would be prudent for the contractor to undertake a
demobilization of resources for the anticipated
BULETIN INGENIEUR
duration of the suspension. Human resources, plant,
equipment can be reassigned, if possible, as necessary,
in an attempt to mitigate the full rigours of the
suspension. A skeleton staff essential to undertake
the remaining duties during the suspension period
e.g. security and maintenance of site, preparation of
claims, other administrative duties, etc. should be
maintained as these may be eventually paid for by
the employer.
3. Contractor to Secure and Protect the Works
The contractor’s duty to secure and protect the
works so far as is necessary in the opinion of the
contract administrator during the period of suspension
is not only an implied requirement but in addition
expressly stipulated in most standard forms of
conditions of contract 30. Furthermore, there is often
either an implied or express necessity for the
contractor to maintain the works in question for the
said period.
In assigning this responsibility to the contractor,
the consequent risks during the suspension period
are accordingly passed on to him. He then remains
primarily liable for the security of the works,
protection against the elements and deterioration from
foreseeable causes, etc. In discharging this duty, the
contractor is expected to implement only reasonable
steps within the context of the contract and no more.
Should measures over and above the norm be
necessary, he must seek the consent and direction of
the contract administrator as at the end of the day
the employer has to ultimately reimburse the
contractor for the same.
Position Post Expiry of Suspension Period
Suspension, being essentially of a temporary nature,
can be of a limited period only. This fact is supported by
the various express provisions which stipulate a definite
duration for any one suspension order; examples of such
life spans being:
1. IEM.ME 1/94 Form: Maximum 84 days 31
2. Putrajaya Conditions of Main Contract: Maximum
150 days 32
3. CIDB Form (2000 Edition): Maximum of 3 months 33
29. See ‘Law and Practice of Construction Contract Claims’ by
Chow Kok Fong at P 170 & 171.
30. See Clause 19.1 CIDB Form (2000 Edition), Clause 58.01
Putrajaya Conditions of Main Contract, etc.
31. Clause 29.4
32. Clause 58.03
33. Clause 19.2 and Appendix to Conditions
30

Following the issue of a typical suspension order to
the contractor, the situations as listed hereunder can
occasion:
1. The contract administrator lifts the suspension by
instructing the contractor to resume work before
the suspension period is over; or
2. The contract administrator instructs the contractor
to resume work upon the lapse of the suspension
period; or
3. The contract administrator expressly extends the
suspension period by a definite time either before
the original suspension period is over or upon its
lapse; or
4. The suspension period lapses and the contract
administrator gives no instruction whatsoever to
the contractor.
The 1st and 2nd situations have clear implications as
these are usually contractually valid and have the
consequential effects well spelt-out. The contractor
under such scenario would adopt a series of measures
i.e.:
1. Resume with the works i.e. recommence with all
work related activities such as construction,
erection, installation, ordering, delivery of materials
to site, etc.;
2. Remobilise all necessary resources to resume with
the works under the contract.; and
3. Proceed with his relevant claims for additional
costs, extension of time, etc. to cover the suspension
period.
In contrast, the 3rd and 4th situations are problematic
as under such scenarios the contractor’s position is less
well defined; being vague and nebulous. Labeled as
‘Prolonged Suspension’ is most standard forms 34, the
general procedure for the contractor to follow under
these circumstances can be reduced to the steps as listed
herebelow:
1. The Contractor to Determine Whether the
Suspension Period Had Lapsed
Before the contractor can initiate any action,
he must establish that the suspension falls under
the contractual definition of ‘Prolonged
Suspension’. Hence, he must establish whether the
suspension has actually exceeded the period
permitted under the contract i.e. 84 days, 150 days,
3 months, etc. as applicable.
2. The Contractor to Establish Reasons for the
Prolonged Suspension
BULETIN INGENIEUR
engineering & law
Unless the suspension is due to the following
reasons, the contractor has a right to invoke the
consequential steps to deal with the prolonged
suspension 35:
● Expressly provided for in the contract e.g. clause
19.2 CIDB Form (2000 Edition), clause 58.03
Putrajaya Conditions of Main Contract, etc.; or
● Necessary by reason of the contractor’s default
e.g. clause 29.4 IEM.ME 1/94 Form, etc.
3. Contractor to Notify Contract Administrator for
Permission to Proceed With Works
Should the reasons for the prolonged suspension
be neither expressly provided for in the contract nor
attributable to the contractor’s default, the contractor
may serve a written notice to the contract
administrator for permission to recommence or resume
with the suspended works in whole or part (as
applicable) within a stipulated period of receipt by
the latter of the said notice.
The period stipulated in the above notice is usually
prescribed in the applicable contractual provision;
common examples include:
● 14 Days: Clause 19.2 CIDB Form (2000
Edition); and
● 28 Days: Clause 29.4 IEM.ME 1/94 Form and
Clause 58.03 Putrajaya Conditions of Main
Contract
Where no such period is expressly indicated, by
necessary implication it is to be taken as a reasonable
time under the particular circumstances.
4. The Contract Administrator To Make Decision and
Respond Accordingly
Upon receipt of the contractor’s notice, the contract
administrator has to make a considered decision and
respond appropriately within the period stipulated in
the notice 36. Should the said decision be in line with
the contractor’s application, the suspension is
accordingly lifted and the contractor can resume with
the works in question. However, if permission to
proceed with the works is not granted, the contractor
is entitled to initiate the next step in the procedural
chain as listed hereunder.
34. E.g. Clause 19.2 CIDB Form (2000 Edition).
35. See ‘The ICE Design and Construct Contract: A Commentary’
by B. Eggleston at P 239.
36. See Clause 19.3 CIDB Form (2000 Edition), Clause 29.4
IEM.ME 1/94 Form, Clause 58.03 Putrajaya Conditions of
Main Contract.
31
engineering & law
5. Contractor to Exercise Right of Election
If permission is not granted by the contract
administrator within the time prescribed in the
contractor’s notice of application, the contractor has
to decide on the next course of action to be adopted.
The option to be exercised is dictated both by the
extent of work affected by the suspension and the
remedies permitted contractually. These include:
● In the case where the suspension affects the whole
or substantially the whole of the works, the
contractor is entitled to:
1. Determine his own employment i.e. if his
contract contains a clause to this effect:
Clause 19.3 and 45.1 CIDB Form (2000
Edition); or
2. Terminate the contract i.e. if the contract
expressly permits: Clause 29.4 and 37.1
IEM.ME 1/94 Form; or
3. Treat the suspension as a Termination for
Convenience of the Contract by the Employer
where the contract prescribes this remedy:
Clause 58.03 and 60.0 Putrajaya Conditions
of Main Contract.
● In the case where the suspension affects only a
part or section of the works, the contractor may
treat such suspended part as an omission 37 under
the relevant clause of the contract e.g.
1. Clause 28: CIDB Form (2000 Edition)
2. Clause 19: IEM.ME 1/94 Form
3. Clause 41: Putrajaya Conditions of Main
Contract.
Whatever option is adopted by the contractor it must
be communicated forthwith to the contract administrator.
Though only the Putrajaya Conditions of Contract 38
prescribe the form of the said notice, it is advisable for
the contractor to effect the same through a written notice.
A further point to note is as to the unique third option
afforded to the contractor by the IEM.ME 1/94 Form 39 i.e.
where the contractor decides to treat the prolonged
suspension as neither a termination nor an omission. In
such an eventuality the contractor can request the
employer to take over the responsibility for protection,
storage, security and insurance of the suspended works
and the risk of loss or damage shall thereupon pass on to
the Employer. Whilst this option has been expressly
prescribed under the conditions of contract, its validity
and practicality in actual practice is uncertain since it
has been hardly adopted. It is a moot point as to whether
such an option can in reality result in a viable option in
the event of the contract administrator’s failure to respond
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to the contractor’s application in a prolonged suspension
scenario. However, since it has been stipulated in one of
the standard local forms, its availability and ambit should
be taken cognizance of.
CONTRACTOR’S ENTITLEMENTS
General
Unless the reason for the suspension ordered by the
contract administrator is primarily due to the contractor’s
default or otherwise provided for in the contract, the latter
is generally entitled to the following entitlements
consequent to the suspension of works 40:
● A commensurate extension of time to the contract to
cater for the suspension period; and/or
● Reimbursement for the extra cost incurred in giving
effect to the suspension ordered.
The above listed broad categories of entitlements are
primarily meant to compensate the contractor for the usual
consequences of the disruption to the progress of his works.
Most contracts have express stipulations or formulae to
cater for these eventualities; notable examples of such
provisions encompassing financial reimbursements include:
● Clause 19.1(b) CIDB Form (2000 Edition);
● Clause 29.2, 29.3 and 29.5 IEM.ME 1/94 Form; and
● Clause 58.02 Putrajaya Conditions of Main Contract.
Such express stipulations, where provided for, prescribe
in addition to the valuation methodology, also the
procedural requirements e.g. notification, etc. for the
contractor to pursue in seeking the necessary
reimbursements. It should be noted that in the absence
of express contractual stipulations governing the
contractor’s entitlement, the common law principles would
have to be accordingly applied.
Extension of Time Entitlement
The general rule is that the contractor is entitled to an
extension of time to the contract for any disruption to his
progress of works i.e. if it affects the whole of the works.
Should the suspension be limited to a part or section of
the works only, extension can be considered if the affected
part or section of the works lies on the critical path 41 and
any float, if allotted, does not belong to the employer.
37. or a variation.
38. See Clause 58.03 stipulating the ‘written’ mode.
39. See Clause 29.5.
40. See ‘The ICE Design and Construct Contract: A Commentary’
by. B. Eggleston at P 236.
41. See ‘Law and Practice of Construction Contract Claims’ by
Chow Kok Fong at P 170.
32

In establishing the contractor’s entitlement to any
extension of time to his contract, the principles and
procedures in relation to this subject have to be strictly
complied. Of particular concern are the following pre-
conditions:
● There must be enshrined in the contract a clause
permitting extension of time in the first place; and
● One of the relevant grounds or events stipulated
therein should cover the instant eventuality i.e. of
suspension of works.
Examining the various standard forms of conditions
of contract permitting suspension, it is apparent that they
satisfy the above pre-conditions to the following effect:
● CIDB Form (2000 Edition) 42
1. 1st pre-condition: Clause 24 Delay and Extension
Of Time
2. 2nd pre-condition: Sub-clause 24.1 (k)
● IEM.ME 1/94 Form
1. 1st pre-condition: Clause 31.2 Extension Of Time
for Completion
2. 2nd pre-condition: Sub-clause 31.2 (g)
Interestingly, the Putrajaya Conditions of Main
Contract do not contain an express ground to extend time
to the contract due to suspension of work. Hence, under
such circumstances, the only option available to the
Employer’s Representative would be to instruct the
contractor to accelerate works pursuant to clause 43.06
in order to recover the period of delay occasioned by the
suspension. Where such recovery is wholly or partly not
capable of being practically achieved, the employer may
inevitably compromise his rights pertaining to liquidated
damages.
Cost Entitlements
The applicable formula governing the contractor’s
entitlement to the various additional costs entitlement
consequent to the suspension are usually stipulated in
the respective conditions of contract. Such express
provisions in general spell out the relevant matters
pertaining to this issue including, inter alia:
● The heads or components of the costs available;
● The exceptions to the contractor’s right of recovery;
and
● The procedural requirements inclusive of any special
pre-conditions
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engineering & law
1. The Heads/Components of the Costs Claimable
Here again, the different forms approach this subject
in varying fashions. The CIDB Form 43 does not define
the components of the cost entitlement but vide clause
19.1(b) merely labels these as ‘Loss and Expense’. In
a similar vein clause 58.02 of the Putrajaya Conditions
of Main Contract underlines the contractor’s right to
additional expenditure by reason of a suspension order
given by the Employer’s Representative without
delving into further details or classification. The
IEM.ME 1/94 Form on the other hand whilst
maintaining the ‘broad brush’ approach of the two
previously mentioned forms, however, is a bit more
generous with the description and classification of
the contractor’s entitlement; these being reflected in
clause 19.2 44 and 19.3 45 respectively.
In the absence of and notwithstanding any express
stipulations as previously considered, the cost
entitlements of the contractor 46 can be basically
broken down into a number of principal heads or
components as listed hereunder 47.
● Additional costs incurred in protecting, securing
and maintaining the works for the period of
suspension;
● Reasonable costs involved in the demobilization
process following the suspension order and
remobilization upon the resumption of the works;
● Additional costs, charges and/or premiums in
extending the various insurances, performance
bonds, guarantees, warranties, etc. incurred due
to the suspension;
● Reasonable expenses incurred due to the
suspension of sub-contracts and purchase orders,
cancellation charges (if incurred), storage and
warehousing charges, etc. during the period of
suspension;
● Compensation for the contractor’s maintenance
of its organization, plant and equipments, etc.
which have been committed to the project or part
of it affected by the suspension 48;
42. See also Clause 19.1(b).
43. Form of Contract for Building Works [2000 Edition].
44. Entitled ‘Cost of Suspension’.
45. Labeled ‘Payment in Event of Suspension’.
46. Whether described as ‘Loss and Expense’ or ‘Cost of Suspen-
sion’, etc.
47. See also ‘Law and Practice of Construction Contract Claims’
by Chow Kok Fong at P 171.
48. Ibid.
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engineering & law
● Additional costs incurred by the contractor owing
to the adverse effect of the suspension process
on the contractor’s performance of the remainder
of the work following the lifting of the suspension
e.g. loss of productivity, inefficient sequencing
of the work, abortive work, etc.; and
● Other miscellaneous additional costs, charges
and/or expenses which can be proven attributable
to the suspension.
2. The Exceptions To The Right of Recovery
The contractor’s entitlement to the right of
recovery is curtailed by any exceptions agreed to by
the parties and as expressly enshrined in the contract.
Once more, the number and types of such exceptions
differ according to the particular conditions of
contract employed. Hence, these stipulations must
be strictly construed and adhered to.
A. IEM.ME 1/94 Form
By virtue of clause 29.2 the contractor is not entitled
to be paid any additional cost if the suspension is
necessary by reason of a default on the part of the
contractor.
B. CIDB Form (2000 Edition)
Clause 19.1(b) lists out the exceptions as:
a) Express provisions in the contract denying the
recovery of additional costs 49; or
b) Where the suspension is necessary because of the
contractor’s default or breach of contract; or
c) Where the suspension is necessary for the proper
execution of the works; or
d) Where the suspension is necessary for the safety
of whole or any part of the works.
C. PUTRAJAYA Conditions of Main Contract
The exceptions stipulated under clause 58.02 include:
a) Express provisions in the contract denying the
recovery of additional costs;
b) Where the suspension is necessary because of the
default of the contractor, his sub-contractors /
suppliers, etc.;
c) Where the suspension is necessary by reason of
adverse weather conditions;
d) Where the suspension is necessary for the proper
execution of the works;
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e) Where the suspension is necessary for the safety
of the works;
f) Where the suspension is necessary by reason of
direction/order of any statutory/governmental
authorities
As a general rule, unless the contractor can show
that either the stipulated exceptions are inapplicable
or are not relevant on the facts, his right of recovery
of additional costs or loss and expense by reason of
the suspension will be likely to be compromised.
3. The Procedural Requirements
In seeking a commensurate compensation to the
loss and expense suffered or additional costs incurred
by reason of compliance with the suspension order,
the contractor must follow any procedural requirements
expressly spelt out in the conditions of contract in
force. The common standard forms have express
stipulations to this effect; compliance with which is a
necessary pre-requisite to the contractor’s satisfactory
recovery. The following pertinent points need to be
taken note of in relation to some of the salient features
pertaining to the procedure to be adopted:
● The contractor is required to notify the contract
administrator of his intention to make a claim 50;
● The notice must be in writing and must be made
within a stipulated period after the receipt of the
order to suspend works. This period is normally:
a) 28 days: Clause 29.2 IEM.ME 1/94 Form and
Clause 58.02 Putrajaya Conditions of Main
Contract; or
b) 30 days: Clause 32.1 CIDB Form (2000
Edition) 51
● The contents of the notice should specify:
a) The event giving rise to the claim and its
consequences 52;
b) An estimate of the likely daily cost 53 or the
value of the loss and expense 54; and
c) Any other relevant information e.g. the
appropriate contract reference, etc. 55
49. Or as labeled ‘Loss and Expense’.
See Clause 29.2 IEM.ME 1/94 Form, Clause 58.03
Putrajaya Conditions of Main Contract.
51. Entitled ‘Notice of Claims’.
52. Clause 32.1(a)(i) CIDB Form.
53. Clause 58.03 Putrajaya Conditions of Main Contract.
54. Clause 32(a)(ii) CIDB Form.
55. Clause 32(a)(ii) CIDB Form.
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● Within a reasonable period 56 of the issue of the
notice by the contractor or at such times as
mutually agreed to by the parties, the contractor
must submit to the contract administrator all
records and documents to substantiate the claim;
● Upon receipt of the contractor’s claim together
with the supporting documents, the contract
administrator must check these for sufficiency
and accuracy. Should there be a necessity to
request for further and better particulars, the
contract administrator must initiate the
appropriate procedural steps to effect the same;
● If upon the receipt of all relevant information,
the contract administrator is of the opinion that
the contractor is contractually entitled to
additional expenditure by reason of the
suspension order issued, he shall ascertain the
extra costs incurred and add it to the Contract
price; and
● The amount due shall be included in any
payment certified by the contract administrator
and disbursed within a reasonable period of the
contractor’s submission of all the relevant
documents and/or records.
Most standard forms of contract are worded to the
effect that the condition precedent to the contractor’s
right to recover the additional costs being the issue of
the notice of intention to claim within the stipulated
period e.g. clause 29.3 IEM.ME 1/94 Form, Clause 58.02
Putrajaya Conditions of Contract and Clause 32.1 CIDB
Form (2000 Edition). As to whether non-compliance
with such a condition precedent is fatal to the contractor’s
claim is a moot point depending as to whether such a
provision is construed as a mandatory requirement. To
obviate the possibility of a claim being rendered invalid
by reason of the breach of such a provision, it is advisable
for contractors to comply as far as is reasonably
practicable to its stipulations unless extenuating
circumstances or reasons beyond the contractor’s control
render such compliance impossible.
CONCLUSION
Suspension and determination are two disparate
topics that arise quite frequently in engineering/
construction contracts. Though appearing at first blush
to be distinct, they do however have a nexus in that
under certain conditions of contract they share common
grounds for disrupting the flow of the work under a
contract. In particular circumstances, suspension and
determination represent alternative remedies for the
parties in the event of any default and/or breach on part
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engineering & law
of the other. Coupled with repudiation and frustration,
both suspension and determination serve as the common
mechanisms for stopping the works under the contract;
whether these be on a temporary or permanent basis.
Suspension is seldom encountered in everyday
practice; a fact evidenced by the dearth of corresponding
express provisions in the common forms of conditions
of contract being employed in this country. However,
this apparent lack of emphasis does not negate the fact
that suspension is, and does, represent an important
mechanism for the parties to temporarily stop or freeze
the works and/or their rights and obligations under their
contract due to various reasons. More importantly, it
does serve a secondary purpose of allowing the parties
to address specific areas of concern e.g. reassessment of
design, review of safety measures, etc. without having
to breach the contract and thereby incur the
consequences of perhaps repudiating the contract. Hence,
it is timely for practitioners to appreciate the legal and
procedural intricacies of this important but often ignored
area of contract implementation by according it due
consideration in practice. BEM
REFERENCES
1. Bockrath, J. ‘Contracts and the Legal Environment
for Engineers and Architects’ [5th Edn.], McGraw Hill.
2. Chappel, D. ‘Parris’s Standard Form of Building
Contract’ [3rd Edn.], Blackwell.
3. Chow Kok Fong ‘Law and Practice of Construction
Contract Claims’ [2nd Edn], Longman.
4. Eggleston, B. ‘The ICE Design and Construct Contract:
A Commentary’, Blackwell.
5. Gajria, K. ‘GT Gajria’s Law Relating to Building and
Engineering Contracts In India’ [4 th Edn.],
Butterworths.
6. Harbans Singh K.S. ‘Engineering and Construction
Contracts Management: Post-Commencement
Practice’, Lexis Nexis/Butterworths.
7. Knowles, R. ‘100 Contractual Problems and Their
Solutions’, Blackwell Science.
8. Murdoch, J. & Hughes, W. ‘Construction Contracts’
[3rd Edn.], Spon Press.
56. 30 days in the CIDB Form: Clause 32.3
35