Charles Edwards, high performing Construction & Engineering Barrister at New Temple Chambers, reviews the significant judgment and court guidance from the privy council in Uniform Building Contractors Ltd v The Water and Sewerage Authority of Trinidad and Tobago (Trinidad and Tobago) [2026] UKPC 2 (22 January 2026) in relation to the FIDIC Yellow Book 1999 in this case summary. This judgment was delivered by the Judicial Committee of the Privy Council on the FIDIC Yellow Book (1999 Edition) and involved the interpretation of the FIDIC Yellow Book (1999 Edition) in relation to claims, conditions precedent and payment and the extent to which the procedural requirements including, conditions precedent needed to be complied with in order to be preserve the Contractor’s entitlement to payment.
Factual Background
Uniform Building Contractors Ltd (the “Contractor”) entered into a contract with the Water and Sewerage Authority of Trinidad and Tobago (the “Employer”) in May 2007 to design, supply and install 28.43km of pipeline pursuant to a lump-sum FIDIC Yellow Book (1999) contract (the “FIDIC Contract”).
The FIDIC Contract consisted of two distinct packages:
· Package 1, covering 14.4 km of pipeline works valued at TT$15,928,924; and
· Package 2, covering 14.03 km of pipeline works valued at TT$12,642,701.50.
A dispute arose between the parties and in 2009 the Employer issued termination notices to the Contractor in respect of both packages. The Contractor’s claim included four items of disputed work which the Contractor characterised as variations for which it was entitled to additional payment pursuant to the FIDIC Contract:
(i) laying pipework in roadways rather than verges;
(ii) disposal of unsuitable excavated material;
(iii) importing suitable backfill; and
(iv) night work.
It was the Employer’s case that the four items of work above were not variations and in any event, the Contractor had failed to comply with the procedural requirements of the FIDIC Contract, at least one of which was arguably the condition precedent. Thus, the Contractor was not entitled to any sums in any event.
First Instance Decision: High Court
In 2017, the High Court dismissed the Contractor’s claims and the trial judge’s conclusions included the following:
“… She held that the contract conditions “catered for all eventualities, unforeseen circumstances and delays that could be anticipated in a project such as this. The contract would have provided for supervision, notifications, and approval processes and for variations.” She went on to find that UBC “chose to deviate from the express terms of its contract with WASA, for example, with the night works engagement and did so at its own risk and for its own account outside of the fixed price of the contract. In fact, this court accepts that the fixed price agreed upon by the parties took into account some, if not most, of the eventualities and circumstances which occurred during the course of the project”, para 114.
As part of her analysis of whether there were implied terms, she found at paras 121 and 122 that the contract was “complete and effective”, and that the sums claimed by UBC were based on terms that did not form part of the contract. She dismissed the claim in its entirety.” [paragraphs 8 – 9 of the Judgment]
[Emphasis added]
Court of Appeal (Appeal from the High Court)
The Court of Appeal of Trinidad and Tobago overturned the High Court’s decision in 2023, finding in favour of the Contractor in the sum of TT$13.9 million and found at paragraph 42 that the trial judge’s decision “was against the weight of the evidence and the judge misunderstood the significance of important aspects of the evidence and did not take account of relevant evidence which was placed before her”. The Court of Appeal determined that the site engineer’s approval constituted evidence of a variation and that the contractual requirement for the Contractor to provide a notice in writing for changes was evidently waived through the site engineer. The heart of the Court of Appeal’s judgment was set out at paragraphs 47 to 50 and 58 and stated as follows (further set out at paragraph 11 of the Privy Council Judgment):
“47. In this context, when one looks at the evidence as a whole and objectively, it is clear that although the parties signed the agreement with the FIDIC terms incorporated, the management of the contract demonstrated some flexibility in its actual day to day operation. Hence, the approach of, after the fact, returning to the strict literalist language of the contract, without examining the evidence of how the contract was in fact performed, leads to an unfair outcome and not one that can be justified on the evidence.
48. There was strong evidence that the changes made to the project as detailed by UBC’s witnesses were in fact variations. The pipes were being laid on the roadway and not the verge. The excavated material was being removed instead of being reused. Significantly larger amounts of new material had to be sourced and brought in. Mr […] explained the change in quantities which resulted from this. Night work was being done instead of solely day work due to congestion and complaints of the residents. Most importantly, WASA’s site engineer approved these as variations.
49. Even if the contract provided for one method in the execution of the contract, the contract itself allowed for variations to be made. Parties are entitled to mutually agree a different method of performance. This is clearly what took place here based on the evidence before the judge. This is different from what clause 3 of the general FIDIC contract provided for, that the engineer had no authority to amend the contract. This was not an amendment of the contract. Variations and adjustments were contemplated by the contract.
50. Further, while the contract may have provided for notice in writing for changes, it is clear that WASA, through the site engineer, waived these requirements as explained by the witnesses. Discussions occurred on an on-going basis on site and adjustments were made. These were detailed by the witnesses in their evidence. As Mr […] explained, his priority was in getting the project done. There was also clear evidence that WASA was given notice of the change of the prices for materials from the bill of quantities and that no objection was taken to those changes and in fact approval was given by Mr […]. It would be fundamentally unfair in the circumstances after the engineer had approved the works being done and agreed they were variations for which additional payments were to be made later on, for WASA to seek, after the fact, to dispute that these additional payments did not arise…
…
58. Mr […] evidence was to the effect as well that the additional works were approved with the payments to be made later. The 28-day period for submission of claims was therefore waived. It is clear from the evidence that the FIDIC terms were varied and waived in several instances based on the stated intention to have the project proceed as quickly as possible. In particular, provisions for notices in writing and for specific periods for submissions were put aside. Decisions were taken onsite after discussions and instructions were given. Neither WASA nor UBC insisted on the procedures for notice of variations or the time frame for claims being complied with. The evidence was that instructions were given by the site engineer Mr […] who was aware of the terms of the contract. The manner in which the contract was terminated also informed the submission of the claim at the time and in the manner it was done.”
[Emphasis added]
Privy Council Decision
The Employer submitted that the Court of Appeal had incorrectly interfered with the trial judge’s findings of fact and that those should be reinstated. The Employer relied upon legal authorities which warn appellate courts against interfering with findings of fact such as, “Volpi v Volpi [2022] EWCA Civ 464; [2022] 4 WLR 48. and the Board’s recent decision in Christo Gift v Dr Keith Rowley [2025] UKPC 37 [2025] UKPC 37for the proposition that the Court of Appeal should only interfere with findings of fact when it is satisfied that the trial judge was plainly wrong. It was not enough to say, as the Court of Appeal did here, that the trial judge’s decision was against the weight of the evidence.”
Although the Employer was correct as a matter of principle, the trial judge’s, at first instance, findings of fact were negligible and therefore the Court of Appeal were entitled to “consider for itself whether or not the four items were variations, and the consequences of UBC’s failure to comply with the relevant contractual requirements.”
The Board set out three difficulties in assessing the Court of Appeal’s approach.
“…First, although they concluded that the four items were variations, they did not refer to the terms of the contract itself. Whether or not an item of work is a variation is primarily a function of the contract terms, so the absence of contractual analysis was, with respect, a fundamental flaw in their reasoning. Secondly, the Court of Appeal’s conclusion that, on the one hand, the Engineer’s conduct did not amount to an amendment of the contract (which he was prohibited from agreeing) but that, on the other, that same conduct waived the relevant contractual requirements, fails to give full effect to the terms of the contract and is contradictory. Thirdly, there are problems arising out of the Court of Appeal’s approach to the issue of waiver and estoppel (or what they called “fairness”), an issue which had neither been pleaded, nor addressed in the evidence, nor raised in any form before the trial judge.” [paragraph 15 of the Judgment]
The Privy Council summarised the issues which it had to consider as follows:
1. The nature and scope of the general terms of the FIDIC Contract between the parties, to see what might have been expressly or impliedly included in the agreed lump sum;
2. Against the background and certain specific terms of the FIDIC Contract, analyse whether or not the four disputed items were variations, as defined in the FIDIC Contract;
3. Analyse the procedural failings on the part of the Contractor and the extent to which they bar the Contractor from making any claim for the four disputed variations in any event;
4. The general issue of fairness and in particular, how and to what extent the question of waiver and estoppel arose, or could have arisen, in this case.
Issue 1: The Nature and Scope of the General Terms of the FIDIC Contract
The Privy Council examined extent of the relevant contractual provisions to assess whether the disputed works fell within the agreed lump-sum price. It observed that, under the FIDIC Yellow Book, the Contractor bears responsibility for both designing and constructing the works. It is a lump-sum arrangement intended to ensure financial certainty for both parties and as a lump sum contract, clause 14.1 (a) of the FIDIC conditions stated that “the Contract Price shall be the lump sum Accepted Contract Amount”. This particular form of a FIDIC contract envisages that a Contractor has allowed for all foreseeable risks in its rates.
At paragraph 23 of the Judgment it was pointed out that “an underestimate of the work required to meet the contractual requirements of a lump sum contract cannot be a variation: it will be “precisely the thing which [the contractor] took the chance of”: see Sharpe v San Paulo Railway Co (1873) LR 8 Ch App 597, 607.”
The Privy Council rejected the Contractor’s argument “that they should not be held to the terms of the contract that they freely agreed” [paragraph 28 of the Judgment].
Issue 2: Were the Four Disputed Items Variations?
The Privy Council, following a detailed analysis of the terms of the FIDIC Contract, found that none of the four items were variation pursuant to the definition of a variation under sub-clause 1.1.6.9 (“any change to the Employer’s Requirements or the Works which is instructed or approved as a variation under clause 13.”) and that pursuant to the FIDIC Contract, these were items which should have been included in the Contractor’s lump sum price.
Issue 3: The Contractor’s Procedural Failures and their Consequences
The Privy Council made it clear that:
“55. The absence or otherwise of a written instruction in this case is, however, immaterial. That is because, even on the assumption that the Engineer could have orally instructed UBC to carry out a variation, the next step in the process would have been for UBC to notify the Engineer of the additional cost under clause 3.6 and, as set out in clause 13.3, to seek a determination under clause 3.5 in respect of the value of the extra work. That would have required a proper proposal from UBC setting out what they said was the value of the variation. WASA would then have responded and the matter would have been determined by the Engineer. UBC’s contractual entitlement was to recover the amount determined by the Engineer under clause 3.5.
56. In this way, the need for a determination by the Engineer under clause 3.5 was paramount, because it was that which gave rise to an entitlement on the part of UBC to be paid additional monies. If there was no determination by the Engineer because there had been no clause 3.6 notice and no request for a determination, there was no entitlement on the part of UBC to be paid additional sums. On the other hand, if a notice had been given under clause 3.6 and a determination had been requested by UBC, but neither had been acted on by the Engineer, the course available to UBC was to make a claim under clause 20.1.”
In regard to the third issue, the Board first confirmed that the Contractor failed to comply with essential contractual procedures and secondly held that clause 20.1 was a condition precedent to any claim for additional payment. Clause 20.1 stated the following:
“The first and last parts of clause 20.1 (entitled “Contractor’s Claims”) were in these terms:
“If the Contractor considers himself to be entitled to any extension of the Time for Completion and/or any additional payment, under any Clause of these conditions or otherwise in connection with the Contract, the Contractor shall give notice to the Engineer, describing the event or circumstances giving rise to the claim. The notice shall be given as soon as practicable, and not later than 28 days after the Contractor became aware, or should have become aware of the events or circumstances.
If the Contractor fails to give notice of a claim within such period of 28 days, the Time for Completion shall not be extended, the Contractor shall not be entitled to additional payment, and the Employer shall be discharged from all liability in connection with the claim. Otherwise, the following provisions of this Sub-Clause shall apply…
The requirements of the Sub-Clause are in addition to those of any other sub-clause which may apply to a claim. If the Contractor fails to comply with this or another Sub-Clause in relation to any claim, any extension of time and/or additional payment shall take account of the extent (if any) to which the failure has prevented or prejudiced proper investigation of the claim, unless the claim is excluded under the second paragraph of this Sub-Clause.” [paragraph 57 of the Judgment]
[Emphasis added]
As pointed out by the Privy Council at paragraph 58, clause 20.1 is designed to ensure certainty for both parties:
“If there has been no engagement by the Engineer at the clause 13.1 or clause 3.5 stage, clause 20.1 provided a route for the contractor to unlock the problem. For the contracting authority, it meant that there was an early warning of a claim (even if the situation that gave rise to the claim was ongoing), with a clear statement of how and why a claim for additional monies had arisen, and an attempt to estimate the additional sums due.”
The Contractor’s procedural failings as summarised by the Privy Council, included the fact that the Contractor failed to give any proper notice as to the increase in costs due to the four disputed items:
“…the Board considers that the first procedural failure was the failure on the part of UBC to give an early – or any proper – notice of the likely increase in costs caused by disputed items (i)-(iv) (contrary to clause 3.6 of the Conditions of Particular Application), and the concomitant failure to seek a determination from the Engineer under clause 3.5. UBC never gave notice; they never sought a determination; and they never offered any material which could have been the subject of any such determination…
… the second and fatal procedural failure by UBC was the failure to make a claim under clause 20.1. That provided them with a complete remedy if, as they maintained, the Engineer had failed to operate the variation process properly. In such circumstances, UBC was entitled to bring a claim under cause 20.1 for the sum which it said was the additional value of the varied work. That claim could have been made irrespective of the Engineer’s failure (if that is what it was) to issue a written instruction under clause 3.1 or to issue a determination under clause 3.5. It was the route to be followed by UBC if [..] WASA was complicit in the Engineer’s non-compliance with the procedure under clause 13…
The language of clause 20.1 of the FIDIC conditions is in classic condition precedent form: “if the Contractor fails to give notice within 28 days of it becoming apparent that a claim had arisen…the Contractor shall not be entitled to additional payment and the Employer shall be discharged of any further liability…” (emphasis supplied). Clauses which require a specified provision to be fulfilled before a corresponding right or obligation arises are commonly construed as conditions precedent: Tata Consultancy Services Ltd v Disclosure and Barring Service [2025] EWCA Civ 380; [2025] 4 WLR 42, para 26. The defining feature of a condition precedent is dependency between the requirement and the relief; one must be conditional upon the other: Bremer Handelsgesellschaft mbH v Vanden Avenne-Izegem PVBA [1978] 2 Lloyd’s Rep 109. The link between the two contractual steps must usually be expressed in terms of obligation, that X must necessarily lead to Y: Scottish Power UK plc v BP Exploration Operating Co Ltd[2015] EWHC 2658 (Comm); [2016] 1 All ER (Comm) 536, para 206. The Board considers that all those features were present in clause 20.1.”
[paragraphs 59 to 61 of the Judgment]
[Emphasis added]
Issue 4: Waiver, Estoppel and Fairness
Due to the fact that the issue of waiver, estoppel and fairness were never raised by the Contractor at first instance in the High Court, the Privy Council rejected the Contractor’s arguments based on waiver, estoppel and fairness. The first time the Contractor had raised waiver and estoppel was in their submissions before the Court of Appeal which the Privy Council found was too late. Further, no evidence was adduced to support such a claim. The Privy Council further stated that if waiver and estoppel is to be an issue in a case, it must be properly pleaded so that the party against whom the point is being asserted knows the case they have to meet. Therefore, this point should not have been allowed in the Contractor’s submissions to the Court of Appeal.
Conclusion
The decision of the Privy Council in Uniform Building Contractors Ltd v The Water and Sewerage Authority of Trinidad and Tobago (Trinidad and Tobago) [2026] UKPC 2 (22 January 2026) provides a clear and authoritative restatement of the principles governing risk allocation, variations, and conditions precedent under the FIDIC Contract. In doing so, the Privy Council focused on contractual provisions of the FIDIC Contract and then procedural requirements of the FIDIC Contract which the Contractor failed to adhere to, rather notions of fairness submitted about the Contractor.
This judgment also reinforces the fact that the pricing mechanism in the FIDIC Yellow Book Contract is a lump contract. A Contractor cannot reallocate risks under the FIDIC Contract by characterising it as a variation in circumstances where the FIDIC Contract, properly construed has already allocated such risks to the Contractor. Whether work carried out or to be carried is a variation is a question is to be determined in accordance with the terms and conditions of the FIDIC Contract.
Notwithstanding any instructions issued or approved on site, the Contractor’s entitlement to additional payment will be determined in accordance with the strict contractual terms and conditions of the FIDIC Contract.
In the absence of strict compliance by the Contractor with the procedural requirements of the FIDIC Contract, no contractual entitlement to payment arose. In accordance with the judgment, pursuant to Clause 20.1 “the Contractor shall not be entitled to additional payment” was to be treated as a condition precedent.
Copyright © 2026 Charles Edwin Edwards MSt(Cantab) MSc(Lond) MRICS MCIArb FCInstCES of Middle Temple, Barrister
NEW TEMPLE CHAMBERS
28th Floor
30 St Mary Axe (The Gherkin)
London
EC3A 8BF
W: https://newtemplechambers.com/
If the facts and matters referred to above are relevant to you or your organisation, then please do not hesitate to contact me in chambers to find out how I can assist you or your organisation. New Temple Chambers specialises in construction and engineering law, adjudication, commercial litigation and international arbitration.
The above is for general information only and to encourage discussion and does not constitute legal advice. The author does not assume any responsibility for the accuracy of any statements made and appropriate legal advice should be taken and relied upon before taking or omitting to take any action in respect of any specific matter.
