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🔍 Breakdown of the Clause – Let’s Get Into the Details!
📘 FIDIC Yellow Book 1999 – Clause 13.4 [Payment in Applicable Currencies]
“Where the Contract provides for payment of the Contract Price in more than one currency, the proportion of each currency in which the Contract Price is to be paid shall be specified in the Appendix to Tender, and the payment of each such proportion shall be made in that currency.”
Summary (Plain English): “If we agreed you’d be paid in different currencies, and wrote those proportions into the tender documents, you should be paid each part in exactly that currency.”
📗 FIDIC Yellow Book 2017 – Sub-Clause 14.15 [Currencies of Payment]
“Payment of the amounts due to the Contractor shall be made in the currencies and proportions set out in the Contract. The Contractor shall provide details of the bank accounts into which the payments are to be made, in the relevant currencies. The Employer shall pay the Contractor by direct transfer into these bank accounts.”
Summary (Plain English): “Tell us where to send the money for each currency, and we’ll send it directly—no conversions, no excuses, no funny business.”
✍️ Side-by-Side Visual Summary
| 📘 1999 – Clause 13.4 | 📗 2017 – Sub-Clause 14.15 |
|---|---|
| Focuses on what currencies to pay | Focuses on what, where, and how to pay |
| No mention of bank accounts | Requires Contractor’s account details for each currency |
| Doesn’t specify payment method | Must pay by direct bank transfer |
| Basic currency protection | Robust for real-world project execution |
Key Observation:
1999: Like a handshake—“Sure, we’ll pay in USD and INR.”
2017: Like a legal checklist—“Which bank? Which currency? Direct transfer, no delays.”
1999: Like a handshake—“Sure, we’ll pay in USD and INR.”
2017: Like a legal checklist—“Which bank? Which currency? Direct transfer, no delays.”
Want a deep-dive on multi-currency payments?
Understanding Clause 14.15: Navigating Multi-Currency Payments in FIDIC Contracts
[See full article]
Key Interpretations and Implications
Let’s face it: in international projects, money rarely flows in just one currency. When currency management goes wrong, it leads to real headaches — not just inconvenience, but disputes, payment delays, and sometimes even contract termination. That’s why these clauses, though brief, have serious contractual weight.
✅ Fundamental Interpretation – The Common Ground
- Both Clause 13.4 (1999) and Sub-Clause 14.15 (2017) require the Contractor to be paid in exactly the mix of currencies defined in the Contract.
- They place a strict obligation on the Employer to respect this split — it’s a contractual commandment, not a suggestion.
- The goal? Shield the Contractor from FX risks if the Employer tries to pay only in local currency.
Big Idea: These clauses are financial insulation — protecting Contractors from currency swings and payment irregularities.
🔄 Evolution from 1999 to 2017 – What’s New and Why?
| Feature / Focus | 1999 – Clause 13.4 | 2017 – Sub-Clause 14.15 |
|---|---|---|
| Currency Proportion Enforcement | ✔️ Yes | ✔️ Yes |
| Reference to Tender Appendix / Contract Data | ✔️ Yes | ✔️ Yes |
| Operational Clarity (bank accounts, transfer method) | ❌ Absent | ✅ Clearly stated |
| Direct Transfer Requirement | ❌ Not mentioned | ✅ Mandatory |
| Contractor’s Obligation to Provide Account Details | ❌ Silent | ✅ Explicit |
| Dispute Avoidance Tools | Minimal | Stronger enforcement language |
Interpretation Tip:
The 1999 clause works in principle, but leaves gaps. The 2017 update transforms the principle into an actionable process — a big leap in reducing disputes and improving accountability.
The 1999 clause works in principle, but leaves gaps. The 2017 update transforms the principle into an actionable process — a big leap in reducing disputes and improving accountability.
⚖️ Who Bears the Risk?
1999 clause:
If the Employer pays only in local currency (by mistake or design), the Contractor has to chase for the correct payment or raise a claim. There’s no guidance on who eats the bank fees or covers FX changes if conversions are needed — opening the door to Employer “excuses” (“Bank wouldn’t process EUR today, sorry!”).
If the Employer pays only in local currency (by mistake or design), the Contractor has to chase for the correct payment or raise a claim. There’s no guidance on who eats the bank fees or covers FX changes if conversions are needed — opening the door to Employer “excuses” (“Bank wouldn’t process EUR today, sorry!”).
2017 clause:
The Employer must pay directly into designated accounts, in the relevant currency. If the Contractor doesn’t provide an account, payment can be justifiably withheld. The direct transfer process makes payments traceable and disputes far less likely.
The Employer must pay directly into designated accounts, in the relevant currency. If the Contractor doesn’t provide an account, payment can be justifiably withheld. The direct transfer process makes payments traceable and disputes far less likely.
Implication: FIDIC 2017 balances the scales: The Contractor must give clear instructions, the Employer must execute clean, currency-specific payments.
Explore more on Payment in Applicable Currencies under FIDIC
[Further reading]
🚨 Real-World Implications – What Could Go Wrong?
When these clauses aren’t followed, the risks aren’t just theoretical — here’s what can really happen in the wild world of multi-currency contracts:
⚠️ Scenario 1: Employer Pays Everything in Local Currency
Contractor’s Risk: They must convert the foreign portion at commercial rates, often losing money to poor rates or transfer fees.
1999 Outcome: Contractor can dispute, but enforcement is tricky—Clause 13.4 is vague on remedies.
2017 Outcome: Clear breach of Sub-Clause 14.15. Contractor can file a Claim under Sub-Clause 20.2. Employer has no excuse.
2017 Outcome: Clear breach of Sub-Clause 14.15. Contractor can file a Claim under Sub-Clause 20.2. Employer has no excuse.
⚠️ Scenario 2: Contractor Forgets to Give USD Bank Account
1999 Outcome: Not addressed—Employer might delay or avoid the USD payment.
2017 Outcome: The obligation stalls until the Contractor supplies the details. Lesson: Contractors must be proactive!
2017 Outcome: The obligation stalls until the Contractor supplies the details. Lesson: Contractors must be proactive!
⚠️ Scenario 3: Government Currency Restrictions
Example: Central bank restricts outward remittances in USD; Employer can’t comply.
Both Editions: Silent. Particular Conditions can help—consider a clause allowing agreed alternate currency payments if legal blocks arise.
Both Editions: Silent. Particular Conditions can help—consider a clause allowing agreed alternate currency payments if legal blocks arise.
Practical Tip:
In uncertain FX environments, add a Particular Condition that allows alternate currency payment at a pre-agreed exchange rate if legal restrictions pop up.
In uncertain FX environments, add a Particular Condition that allows alternate currency payment at a pre-agreed exchange rate if legal restrictions pop up.
✍️ Interpretation Nuggets (Stuff Most People Miss)
- “Shall be made in that currency” (1999) and “shall pay by direct transfer” (2017) are hard legal obligations, not soft guidelines. Failure can lead to claims, interest on delays, or even suspension (see Sub-Clause 16.1).
- Neither clause defines “proportion” — if your Contract Data is vague, the payment system may break down.
- The 2017 update is better aligned with lender/audit demands: currency-specific accounts make payments traceable.
⚙️ Contractual Leverage: Contractor vs. Employer
| Party | What They Gain | What They Risk |
|---|---|---|
| Contractor | FX protection, predictable procurement, easier cash flow forecasting | Delayed payments if they forget to nominate accounts (2017) |
| Employer | Clarity in payment duties, traceable payments | Liability for FX losses, or claims if they deviate from agreed proportions or methods |
Cross-Referencing with Other Clauses
“Who Else Is in the Room When Currency Is on the Table?”
Think of Clause 13.4 and Sub-Clause 14.15 as team captains in the FIDIC payment game. But they don’t work alone — here’s how their teammates help (or complicate!) the play.
🔁 FIDIC 1999: Clause 13.4 & Its Siblings
✅ Clause 14.1 – The Contract Price
Sets the contract amount and currency structure. If split currencies are agreed, Clause 13.4 is activated.
Variations (Clause 13.1) must respect these proportions unless otherwise agreed.
Cross-Link: If a Variation adds funds, it usually follows the original split — unless you specify otherwise.
Read: Clause 14.1 The Contract Price (FIDIC Yellow Book 1999)
Sets the contract amount and currency structure. If split currencies are agreed, Clause 13.4 is activated.
Variations (Clause 13.1) must respect these proportions unless otherwise agreed.
Cross-Link: If a Variation adds funds, it usually follows the original split — unless you specify otherwise.
Read: Clause 14.1 The Contract Price (FIDIC Yellow Book 1999)
✅ Clause 14.3 – Application for Interim Payment Certificates
Contractor’s statements must break down amounts by currency, as per Clause 13.4.
Practical: Submitting a single-currency total may lead to rejection and delay.
Explore: Interim Payment Certificates (FIDIC Yellow Book)
Contractor’s statements must break down amounts by currency, as per Clause 13.4.
Practical: Submitting a single-currency total may lead to rejection and delay.
Explore: Interim Payment Certificates (FIDIC Yellow Book)
✅ Clause 14.6 – Issue of Interim Payment Certificates
The Engineer must certify the amounts in the right currency mix. Single-currency certificates violate the spirit of Clause 13.4.
The Engineer must certify the amounts in the right currency mix. Single-currency certificates violate the spirit of Clause 13.4.
✅ Clause 14.7 – Payment
Payment must occur within 28 days of the Interim Payment Certificate, and in the correct currency split — not just on time!
Payment must occur within 28 days of the Interim Payment Certificate, and in the correct currency split — not just on time!
Hidden Risk: An Employer might claim “we paid on time,” but if it’s all in INR when USD was due, that’s not compliant under Clause 13.4.
📎 FIDIC 2017: Sub-Clause 14.15’s Cross-Functional Family
✅ Sub-Clause 14.1 – The Contract Price
Sets the contract sum and currency split (now in Contract Data). Adjustments (under 13.3 Variations/13.5 Provisional Sums) should honor this split unless the parties agree otherwise.
Details: Variation Procedure (2017)
Sets the contract sum and currency split (now in Contract Data). Adjustments (under 13.3 Variations/13.5 Provisional Sums) should honor this split unless the parties agree otherwise.
Details: Variation Procedure (2017)
✅ Sub-Clause 14.3 – Application for Interim Payment Certificates
Application must be split by currency — no lumping, no arbitrary conversions.
Application must be split by currency — no lumping, no arbitrary conversions.
✅ Sub-Clause 14.6 – Issue of Interim Payment Certificates
The Engineer must certify each amount in the correct currency. Changing the mix during certification may breach Sub-Clause 3.7 (see 3.7 Explained).
The Engineer must certify each amount in the correct currency. Changing the mix during certification may breach Sub-Clause 3.7 (see 3.7 Explained).
✅ Sub-Clause 14.7 – Payment
Payment must be made on time and in the correct currency/account as per 14.15. If USD is late but INR is on time, Sub-Clause 14.8 allows for finance charges.
Payment must be made on time and in the correct currency/account as per 14.15. If USD is late but INR is on time, Sub-Clause 14.8 allows for finance charges.
✅ Sub-Clause 20.2 – Claims for Payment Breaches
If payment isn’t compliant, the Contractor can claim. Sub-Clause 14.15 is the foundation for this.
Tip: Always attach breakdowns and proof for claims!
If payment isn’t compliant, the Contractor can claim. Sub-Clause 14.15 is the foundation for this.
Tip: Always attach breakdowns and proof for claims!
Claim Strategy: When filing a claim, show your currency breakdowns and bank evidence. Your 14.15 rights support you.
💡 Summary Chart – Who Talks to Who?
| Clause | Role in Currency Payment | Links to 13.4 / 14.15 |
|---|---|---|
| 14.1 (Both Editions) | Sets initial currency structure | Directly tied to 13.4 / 14.15 |
| 14.3 | Contractor’s application must honor currency split | 13.4 / 14.15 enforce it |
| 14.6 | Engineer must certify payments in correct currencies | Relies on accurate application |
| 14.7 | Employer must pay in stated currencies | Enforced by 13.4 / 14.15 |
| 20.2 (2017) | Allows claims for payment breaches | 14.15 is the claim foundation |
Final Thought:
“Clause 13.4 and Sub-Clause 14.15 are the gatekeepers of currency integrity — but their whole team has to execute for payments to go smoothly.”
“Clause 13.4 and Sub-Clause 14.15 are the gatekeepers of currency integrity — but their whole team has to execute for payments to go smoothly.”
What If Scenarios?
💭 “What Could Possibly Go Wrong with Payment in Multiple Currencies?”
Construction is rarely an ideal world! Here’s what happens when payment in applicable currencies goes off script.
⚠️ Scenario 1: Employer Pays Everything in Local Currency
Contract Context:
Contract Price = ₹70 Cr (INR) + $1.2M (USD)
IPC certified for ₹35 Cr + $600,000.
Contract Price = ₹70 Cr (INR) + $1.2M (USD)
IPC certified for ₹35 Cr + $600,000.
What Happens: Employer pays INR equivalent for the USD portion using the day’s rate.
-
Under FIDIC 1999 (Clause 13.4):
Contractor can object, but Clause 13.4 is vague on remedies. Likely, Contractor must initiate a claim under Clause 20.1.
Frustration Level: High. -
Under FIDIC 2017 (Sub-Clause 14.15):
Clear breach. Contractor can:- File a Claim under Sub-Clause 20.2.1
- Seek FX loss under Sub-Clause 20.2.4
- Claim finance charges under Sub-Clause 14.8 for unpaid USD
⚠️ Scenario 2: Contractor Forgets to Provide Bank Details for Foreign Currency
Setup: Payments split 70% INR, 30% EUR. Application only lists INR account.
Employer pays INR, but holds back EUR waiting for details.
Employer pays INR, but holds back EUR waiting for details.
- Under FIDIC 1999: Clause 13.4 doesn’t require account info. Employer delaying EUR may still be a breach, but logistics can get messy.
-
Under FIDIC 2017: Sub-Clause 14.15 makes account details mandatory. If not provided, Employer is right to delay that portion.
Pro Tip: Always include account details in Contract Data or submit them with your first application!
⚠️ Scenario 3: Exchange Rate Skyrockets Between Certification and Payment
Example: IPC certified $500,000 on June 1st. Payment delayed until July 15th; INR depreciates 7% in that time.
- Under 1999 FIDIC: Clause 13.4 doesn’t cover FX risk after certification. Interest for delayed payment (Clause 14.8) might help, but FX losses are a grey area.
- Under 2017 FIDIC: Sub-Clause 14.15 protects the currency, not value. But Sub-Clause 14.8 lets you claim finance charges, and Sub-Clause 20.2 can support cost claims for actual loss (with proof). Pro Move: Track certification vs. remittance dates, and keep FX rate screenshots from RBI/ECB for claims!
⚠️ Scenario 4: Government Imposes Currency Transfer Restrictions
Twist in the Tale: Project is in India; RBI restricts outward USD remittances for government projects. Employer insists on paying all in INR until rules change.
- Under 1999 FIDIC: Clause 13.4 doesn’t address force majeure or currency controls. Contractor is technically entitled to USD, but law may override. Outcome is unclear—you may need to invoke Clause 19 [Force Majeure] and negotiate.
- Under 2017 FIDIC: Sub-Clause 14.15 is strict, but Sub-Clause 19.2 [Exceptional Events] may apply if the restriction is unforeseeable and outside the Employer’s control.
Practical Solution: Add a Particular Condition: “If currency restrictions apply, payment is made in INR at the Central Bank FX rate on IPC issuance date.” Custom drafting saves both parties!
⚠️ Scenario 5: Lump Sum Variations Create Ambiguous Currency Allocations
Project Change: Variation of ₹2 Cr for imported equipment priced in USD.
Original Contract: 80% INR / 20% USD — but should the Variation follow this?
Original Contract: 80% INR / 20% USD — but should the Variation follow this?
- Under 1999 FIDIC: Clause 13.4 applies only to the “Contract Price.” Variations may default to the same split, which could underpay FX costs if not clarified. Risk: big gap if not negotiated up front!
- Under 2017 FIDIC: Integrated with Sub-Clause 13.3 [Variation Procedure] and 14.15. You can and should clarify currency splits during Variation valuation. Engineer’s Determination should reflect the true mix.
Tactical Tip: When submitting variation proposals under Sub-Clause 13.3.1, always document your proposed currency split—don’t assume it’ll follow the original contract!
✨ Final Reflection: What Do These Scenarios Teach Us?
- Clause 13.4 (1999): Gives you currency rights, but little enforcement muscle or process detail.
- Sub-Clause 14.15 (2017): Gives you both currency entitlement and the procedural tools to enforce it.
- But in both cases, outcomes hinge on careful contract drafting — especially in the Appendix to Tender / Contract Data and Particular Conditions. Don’t leave the “what ifs” to chance!
✨ Suggestions for Clarity and Improvement
📘 Clause 13.4 – FIDIC 1999: Room for Improvement
“Where the Contract provides for payment of the Contract Price in more than one currency, the proportion of each currency in which the Contract Price is to be paid shall be specified in the Appendix to Tender, and the payment of each such proportion shall be made in that currency.”
🔍 What’s Missing or Ambiguous?
- No mention of payment method (direct transfer? cheque? bank draft?)
- No mention of banking details or location
- No clarity on FX regulations or legal restrictions
- Silent on bank charges or deductions
- No fallback if payment in a currency becomes impossible
✏️ Suggested Particular Conditions (1999)
Replacement of Clause 13.4 – Payment in Applicable Currencies
“This Clause replaces General Conditions Clause 13.4 in its entirety.
Where the Contract Price is stated in more than one currency, the proportions and applicable currencies shall be as stated in the Appendix to Tender. The Employer shall make payments of each currency component by direct bank transfer into the Contractor’s nominated accounts in the respective currencies. The Contractor shall provide bank account details no later than 14 days after the Commencement Date.
All associated banking charges, transfer fees, and intermediary bank deductions shall be borne by the Employer, unless otherwise stated in the Appendix to Tender.
In the event that payment in a specified foreign currency is restricted due to a change in applicable law or exchange control regulations, the Parties shall agree on an alternative payment method or currency at the prevailing central bank exchange rate on the date of certification.
This Clause shall also apply to payments under approved Variations and Adjustments, unless otherwise agreed in writing.”
Why this works:
✔️ Follows GP2 (clearly replaces original)
✔️ Introduces process clarity (banking, timing)
✔️ Allocates cost responsibility
✔️ Adds contingency for FX risks
✔️ Covers Variations & Adjustments
✔️ Follows GP2 (clearly replaces original)
✔️ Introduces process clarity (banking, timing)
✔️ Allocates cost responsibility
✔️ Adds contingency for FX risks
✔️ Covers Variations & Adjustments
📗 Sub-Clause 14.15 – FIDIC 2017: Still Great, But Can Be Sharpened
“Payment of the amounts due to the Contractor shall be made in the currencies and proportions set out in the Contract. The Contractor shall provide details of the bank accounts into which the payments are to be made, in the relevant currencies. The Employer shall pay the Contractor by direct transfer into these bank accounts.”
🔍 What’s Still Ambiguous?
- What if Contractor fails to submit account info on time?
- No fallback if FX rules prohibit payment in a foreign currency
- Are Variations/Adjustments payments covered by original split?
- No mention of who pays bank charges/fees
- No deadline for submitting account info
✏️ Suggested Particular Conditions (2017)
Amendment to Sub-Clause 14.15 – Currencies of Payment
“Add the following paragraphs to Sub-Clause 14.15:
The Contractor shall submit the bank account details for each payment currency within 14 days after the Commencement Date, or as otherwise agreed. Failure to provide such details shall entitle the Employer to withhold the corresponding payment without incurring interest liability under Sub-Clause 14.8 until the details are received.
In the event that applicable law or foreign exchange regulations prevent payment in one of the specified currencies, the Parties shall consult in good faith and agree to effect such payment in another freely convertible currency, using the exchange rate published by the Reserve Bank of India (or other agreed source) on the date the Interim Payment Certificate was issued.
Unless otherwise stated in the Contract, the Employer shall bear all bank charges and fees associated with the remittance of each currency.”
Why this works:
✔️ Adds clarity, preserves original clause (GP2 compliant)
✔️ Sets deadlines and protects Employer if waiting on details
✔️ Handles currency control risk fairly
✔️ Establishes who pays bank charges
✔️ Adds clarity, preserves original clause (GP2 compliant)
✔️ Sets deadlines and protects Employer if waiting on details
✔️ Handles currency control risk fairly
✔️ Establishes who pays bank charges
🇮🇳 India-Specific Tips for Domestic FIDIC Contracts
Key points for contracts with Indian Employers (PSUs/private with offshore procurement):
- Reference the RBI Master Circular on Forex Transactions for remittances to foreign contractors.
- Explicitly state all foreign currency payments will comply with FEMA and RBI regulations.
- Allow for conversion at the SBI TT Buying Rate if the RBI daily rate is unavailable.
Bonus Draft Clause:
All foreign currency payments shall be subject to compliance with the Foreign Exchange Management Act (FEMA) and applicable RBI notifications. In case of ambiguity, the exchange rate shall be taken as the SBI TT Buying Rate prevailing on the date of Interim Payment Certificate.
All foreign currency payments shall be subject to compliance with the Foreign Exchange Management Act (FEMA) and applicable RBI notifications. In case of ambiguity, the exchange rate shall be taken as the SBI TT Buying Rate prevailing on the date of Interim Payment Certificate.
✨ Closing Thought
“A beautifully worded clause is only as good as the clarity it brings in the middle of a cash-flow crisis.”
“A beautifully worded clause is only as good as the clarity it brings in the middle of a cash-flow crisis.”
Why refine these clauses?
- Protects both parties from legal gray zones
- Aligns with FIDIC’s Golden Principles (GP1 & GP2)
- Builds a more robust, bankable, and FX-resilient contract
✅ Can the Contractor Provide Separate Bank Accounts for Different Currencies?
Short Answer: Yes! Under FIDIC 2017 Sub-Clause 14.15, the Contractor can designate separate bank accounts for each currency—even if one is in the project country (for local currency) and another is abroad (for foreign currency like USD, EUR, etc.).
What Does Sub-Clause 14.15 Say?
“The Contractor shall provide details of the bank accounts into which the payments are to be made, in the relevant currencies. The Employer shall pay the Contractor by direct transfer into these bank accounts.”
“The Contractor shall provide details of the bank accounts into which the payments are to be made, in the relevant currencies. The Employer shall pay the Contractor by direct transfer into these bank accounts.”
Interpretation:
- The wording allows the Contractor to specify different accounts for different currencies.
- There’s no rule that all accounts must be in the project country.
- What matters is each currency has its designated recipient account.
✅ Why Is This Done in Practice?
Local currency (e.g., INR) → Local Indian bank account:
- Paying site wages, local suppliers, GST, utilities, etc.
- Reduces conversion charges and keeps local cash flow smooth.
- For repatriating profit, paying overseas suppliers, servicing foreign loans, or linking to parent company treasury.
Example:
An Italian contractor working in Mumbai may provide:
• An ICICI INR account in India
• A EUR account with UniCredit Bank in Milan
An Italian contractor working in Mumbai may provide:
• An ICICI INR account in India
• A EUR account with UniCredit Bank in Milan
🧾 What Should Be Specified in the Contract?
The Contractor shall nominate one or more bank accounts for each currency in which payments are due. Such accounts may be located within or outside the Country, subject to applicable foreign exchange regulations.
⚖️ Legal & Practical Considerations (India):
- FEMA compliance: Outward remittance must follow RBI norms, typically via Form A2 & supporting docs.
- Tax Deducted at Source (TDS): Employer must withhold/apply tax before foreign payment.
- Contractor’s Instructions: Clearly specify account name, SWIFT/IBAN, bank address, and account currency.
✍️ Practical Suggestion for Contract Drafting:
Banking Instructions:
“The Contractor shall, within 14 days of the Commencement Date, submit written details of the bank accounts into which each portion of the Contract Price shall be paid.
The INR portion shall be paid into an account held at an Indian bank.
The USD/EUR portion shall be paid into an account held in the Contractor’s home country.
The Employer shall make direct transfers to the respective accounts, in accordance with Sub-Clause 14.15.”
✨ Final Word
“By separating payment flows, you reduce financial friction, simplify compliance, and keep everyone’s auditors happy.”
“By separating payment flows, you reduce financial friction, simplify compliance, and keep everyone’s auditors happy.”
📄 Particular Conditions Clause: Multi-Currency Bank Account Instructions
(Addition to Sub-Clause 14.15 – Currencies of Payment)
Amendment to Sub-Clause 14.15 – Banking Arrangements for Multi-Currency Payments
The following text is added to Sub-Clause 14.15:
“The Contractor shall, within 14 days after the Commencement Date, provide written details of one or more bank accounts for the receipt of payments, designated for each currency specified in the Contract. These accounts may be located within the Country or in another jurisdiction, subject to applicable law and any relevant foreign exchange regulations.
The Employer shall pay the amounts due in each currency by direct bank transfer into the relevant designated account, in accordance with the proportions and currencies set out in the Contract Data.
Unless otherwise stated in the Contract Data:
The INR portion shall be paid into a bank account located in the Country (India), and
The foreign currency portion(s) shall be paid into bank account(s) nominated by the Contractor in its country of domicile or other permitted offshore banking locations.
The Contractor shall ensure that the banking instructions include all necessary details, including the account name, account number, SWIFT code or IBAN, bank name and address, and the currency denomination of each account.
In the event that the Contractor fails to provide complete bank account information for any currency, the Employer shall be entitled to withhold payment of that currency portion without liability for delay or financing charges, until such details are provided.
All payments shall be made without deduction, except as required by applicable tax law or withholding requirements, and all bank charges or transfer fees shall be borne by the Employer, unless otherwise stated in the Contract Data.”
✅ Why This Works:
• Follows GP2: Addition, not replacement—retains original FIDIC logic.
• Both parties protected (clear process for payment, info, and FX compliance).
• RBI/FEMA ready—easily customized for Indian requirements.
• Claims-resistant—avoids payment friction due to missing banking info.
• Suitable for Part A or Part B of Particular Conditions.
• Follows GP2: Addition, not replacement—retains original FIDIC logic.
• Both parties protected (clear process for payment, info, and FX compliance).
• RBI/FEMA ready—easily customized for Indian requirements.
• Claims-resistant—avoids payment friction due to missing banking info.
• Suitable for Part A or Part B of Particular Conditions.
📄 Particular Conditions Clause: Multi-Currency Bank Account Instructions
(Replacement of Clause 13.4 – Payment in Applicable Currencies)
Replacement of Clause 13.4 – Payment in Applicable Currencies
This Clause replaces General Conditions Clause 13.4 in its entirety:
“Where the Contract Price is stated in more than one currency, the proportions and applicable currencies shall be as stated in the Appendix to Tender. The Employer shall make payments of each currency component by direct bank transfer into the Contractor’s nominated accounts in the respective currencies. The Contractor shall provide bank account details no later than 14 days after the Commencement Date.
All associated banking charges, transfer fees, and intermediary bank deductions shall be borne by the Employer, unless otherwise stated in the Appendix to Tender.
In the event that payment in a specified foreign currency is restricted due to a change in applicable law or exchange control regulations, the Parties shall agree on an alternative payment method or currency at the prevailing central bank exchange rate on the date of certification.
This Clause shall also apply to payments under approved Variations and Adjustments, unless otherwise agreed in writing.”
✅ Why This Works:
• GP2 compliant—clear replacement.
• Removes ambiguity (payment process, charges, FX hurdles).
• Ready for India and other multi-currency jurisdictions.
• Covers Variations and Adjustments.
• GP2 compliant—clear replacement.
• Removes ambiguity (payment process, charges, FX hurdles).
• Ready for India and other multi-currency jurisdictions.
• Covers Variations and Adjustments.
✅ Enhanced Particular Conditions Clause
For Use with FIDIC Yellow Book 2017 – Sub-Clause 14.15 [Currencies of Payment]
Title: Multi-Currency Payment and Bank Account Instructions Clause
(Addition to Sub-Clause 14.15 – Currencies of Payment. GP2-compliant: adds to, not replaces, the original clause.)
Title: Multi-Currency Payment and Bank Account Instructions Clause
(Addition to Sub-Clause 14.15 – Currencies of Payment. GP2-compliant: adds to, not replaces, the original clause.)
14.15A – Designation of Currency-Specific Bank Accounts and Remittance Procedure
The Contractor shall, within 14 days after the Commencement Date, provide written notification to the Employer and the Engineer specifying one or more currency-specific bank accounts for the receipt of payments in accordance with the currency proportions and values set out in the Contract. These accounts may be located:
• Within the Country for payments in local currency; and
• In the Contractor’s country of domicile or any internationally recognized banking jurisdiction for payments in foreign currency.
Each banking instruction shall include:
• Account Name
• Bank Name and Address
• Account Number or IBAN
• SWIFT/BIC Code
• Currency of the Account
The Employer shall make payments by direct bank transfer into the respective accounts in the respective currencies.
If the Contractor fails to provide any required banking information for a given currency, the Employer shall be entitled to withhold payment of that portion without penalty, until such information is received. The delay in such payment shall not be considered as late payment for the purposes of Sub-Clause 14.8 [Delayed Payment].
Unless stated otherwise in the Contract Data:
• All banking fees and intermediary charges related to the transfer shall be borne by the Employer.
• Payments shall be made in full, without deductions, except as required by applicable law (e.g., tax withholding).
In the event that exchange control regulations or applicable law prevent payment in one of the specified currencies, the Parties shall consult in good faith to agree on an alternative payment mechanism. In such cases, the payment may be made in a mutually agreed alternative currency, using the central bank’s reference exchange rate on the date of certification of the payment.
✅ How This Clause Complies with the FIDIC Golden Principles
| Golden Principle | Compliance Explained |
|---|---|
| GP1: Recognizable FIDIC Contract Form | Clause builds directly on Sub-Clause 14.15 without altering its framework. Terminology and structure match FIDIC standards. |
| GP2: Clear identification of modifications | Clearly states: “This clause adds to, but does not replace…” ensuring full transparency of modification to the General Conditions. |
| GP3: Parties’ roles, obligations, and risks clearly defined | – Contractor must provide account details. – Employer must pay accordingly. – Risk of delay shifted clearly based on each party’s performance. |
| GP4: Employer’s role through the Engineer maintained | Engineer is copied on banking instructions (per 14.15’s implied payment flow and Sub-Clause 3.7). Engineer can verify compliance. |
| GP5: Dispute avoidance and amicable resolution encouraged | Introduces a “consultation and agreement” fallback if currency payments become unlawful—helps prevent claims escalation. |
Bonus: 🇮🇳 India-Ready Add-On (Optional)
[Only for contracts executed in India or where RBI regulations apply]
All foreign currency payments from the Employer shall be subject to compliance with applicable Indian law, including the Foreign Exchange Management Act (FEMA), and shall be accompanied by the Contractor’s invoice and Form A2 as per RBI remittance norms. The exchange rate used for any required conversion shall be the RBI Reference Rate on the date the Interim Payment Certificate was issued.
[Only for contracts executed in India or where RBI regulations apply]
All foreign currency payments from the Employer shall be subject to compliance with applicable Indian law, including the Foreign Exchange Management Act (FEMA), and shall be accompanied by the Contractor’s invoice and Form A2 as per RBI remittance norms. The exchange rate used for any required conversion shall be the RBI Reference Rate on the date the Interim Payment Certificate was issued.
📄 Particular Conditions Clause (FIDIC 1999 Edition)
Clause Title: Multi-Currency Payment and Banking Instructions
(Replacement of Clause 13.4 – Payment in Applicable Currencies. Compliant with GP2.)
(Replacement of Clause 13.4 – Payment in Applicable Currencies. Compliant with GP2.)
13.4 – Payment in Applicable Currencies and Designated Bank Accounts
Where the Contract provides for payment of the Contract Price in more than one currency, the proportions and applicable currencies shall be as stated in the Appendix to Tender or in the Contract Data, as applicable.
The Contractor shall, within 14 days of the Commencement Date, notify the Engineer and the Employer in writing of the bank account details for each currency. These accounts may be held:
• Within the Country for local currency payments; and
• Outside the Country for foreign currency payments, in the Contractor’s country of domicile or another internationally recognized jurisdiction, subject to applicable foreign exchange regulations.
The Employer shall make each currency payment by direct bank transfer into the corresponding bank account designated by the Contractor. Each banking instruction shall include the following details:
• Account Name
• Bank Name and Address
• Account Number or IBAN
• SWIFT/BIC Code
• Currency of the Account
In the event that the Contractor does not provide complete bank account details for any payment currency, the Employer shall be entitled to withhold payment of the corresponding portion until such details are provided. Such delay shall not constitute a default under Clause 14.7 [Time for Payment] and shall not trigger financing charges under Clause 14.8 [Delayed Payment].
Unless otherwise stated in the Appendix to Tender or Particular Conditions:
• All bank charges, transfer fees, and intermediary fees incurred for transferring payments in accordance with this clause shall be borne by the Employer.
• All payments shall be made in full, without deduction, except where deduction is required under applicable law (e.g., tax withholding).
If at any time after the Commencement Date, a currency transfer restriction or any legal or regulatory change makes it unlawful or impractical for the Employer to remit a specified currency, the Parties shall consult in good faith to determine an acceptable alternative mechanism. Such payment may be made in a mutually agreed alternate currency using the central bank reference rate applicable on the date of certification of the payment.
✅ FIDIC Golden Principle Compliance Checklist (1999 Edition)
| Golden Principle | How It’s Applied |
|---|---|
| GP1: Contract remains recognizable as FIDIC | Uses standard clause numbering, structure, and terminology. Mirrors original Clause 13.4 while expanding functionality. |
| GP2: Modifications must be clearly stated | Begins with “This clause replaces Clause 13.4…” – full transparency of change. |
| GP3: Parties’ roles and obligations are clear | Contractor must nominate accounts; Employer must pay correctly. Risks and duties are well-distributed. |
| GP4: Engineer’s role preserved | Engineer is kept in the loop as per the Contract’s standard information flow. |
| GP5: Supports dispute avoidance | Introduces fallback mechanism in case of FX restrictions to prevent claim escalation. Encourages negotiation before confrontation. |
Optional Add-on: 🇮🇳 India-Specific Language (For Indian Employers or Projects)
Foreign currency payments shall comply with applicable Indian foreign exchange laws and regulations, including the Foreign Exchange Management Act (FEMA) and the RBI Master Directions on remittances. In such cases, the applicable exchange rate shall be the RBI Reference Rate on the date the relevant payment certificate is issued.
Foreign currency payments shall comply with applicable Indian foreign exchange laws and regulations, including the Foreign Exchange Management Act (FEMA) and the RBI Master Directions on remittances. In such cases, the applicable exchange rate shall be the RBI Reference Rate on the date the relevant payment certificate is issued.
✅ Payment in Applicable Currencies – Clause Administration Checklist
(Applies to both FIDIC 1999 Clause 13.4 and FIDIC 2017 Sub-Clause 14.15)
| # | Checklist Item | Applies To | ✔ |
|---|---|---|---|
| 1 | Contract Price is split into two or more currencies (e.g., local + foreign) and stated clearly in Appendix to Tender or Contract Data | 1999 & 2017 | |
| 2 | Currency proportions (e.g., 70% INR, 30% USD) are clearly defined and sum up to 100% | 1999 & 2017 | |
| 3 | Contractor has submitted separate bank account details for each currency, including SWIFT/IBAN | 2017 only (optional for 1999) | |
| 4 | Bank accounts are located in correct jurisdictions (local for local currency, offshore for foreign) | 1999 & 2017 | |
| 5 | Payment applications (under Clause 14.3) are broken down per currency | 1999 & 2017 | |
| 6 | Engineer’s Interim Payment Certificate (Clause 14.6) reflects the certified amounts in correct currency mix | 1999 & 2017 | |
| 7 | Employer pays each currency into the designated account via direct bank transfer (no currency substitutions) | 2017 only | |
| 8 | If Contractor failed to submit account details, payment for that portion is rightfully withheld (no interest payable) | 2017 only | |
| 9 | Banking charges, intermediary bank fees, and FX deductions are clearly allocated (ideally to Employer) in Particular Conditions | 1999 & 2017 | |
| 10 | Fallback mechanism in place if foreign currency payment is blocked due to regulatory change (e.g., FEMA/RBI) | 1999 & 2017 | |
| 11 | Variations or adjustments to Contract Price are paid in same currency ratio unless otherwise agreed in writing | 1999 & 2017 | |
| 12 | Sub-Clause 20.2 Claim process followed if currency payment is delayed, incorrect, or substituted | 2017 only | |
| 13 | Contractor retains documentation to prove exchange losses or FX impacts for potential claims | 1999 & 2017 | |
| 14 | All amendments to Clause 13.4 or 14.15 follow FIDIC GP2 – explicitly stating whether clause is added to, replaced, or modified | 1999 & 2017 | |
| 15 | All payment-related clauses (14.1 to 14.8) consistently reflect the same currency logic | 1999 & 2017 |
Tip: Print this table or save as PDF as your FIDIC multi-currency administration “cheat sheet” for project teams, contract drafters, and auditors.
📄 Sample Letter 1: Submission of Bank Account Details for Multi-Currency Payments
Applicable Clause: Sub-Clause 14.15 (FIDIC 2017)
To: The Employer / The Engineer
From: The Contractor
Subject: Submission of Currency-Specific Bank Account Details – Sub-Clause 14.15
Date: [Insert Date]
Dear Sir/Madam,
Pursuant to Sub-Clause 14.15 [Currencies of Payment] of the Conditions of Contract, we hereby submit the details of our designated bank accounts for each currency as stipulated in the Contract:
Kindly confirm receipt and advise if further documentation is required. We trust this satisfies the procedural requirement for direct payment under the Contract.
Yours faithfully,
[Contractor’s Name]
Authorized Representative
| Currency | Account Name | Bank | SWIFT/IBAN | Country |
|---|---|---|---|---|
| [INR] | [ABC Ltd] | [HDFC Bank, Mumbai] | [HDFCINBBXXX] | India |
| [USD] | [ABC Ltd] | [Bank of America] | [BOFAUS3NXXX] | USA |
| [EUR] | [ABC GmbH] | [Deutsche Bank] | [DEUTDEFFXXX] | Germany |
📄 Sample Letter 2: Claim for Non-Payment in Contractually Agreed Currency
Applicable Clause: Sub-Clause 14.15 + Sub-Clause 20.2 (FIDIC 2017)
To: The Employer
From: The Contractor
Subject: Notice of Claim – Non-Payment in Agreed Currency (Sub-Clause 14.15)
Date: [Insert Date]
Dear Sir,
We refer to Interim Payment Certificate No. [XX] issued on [Date], wherein the Engineer certified the following payment:
INR: [Amount]
USD: [Amount]
We acknowledge receipt of the INR portion. However, we note that the USD portion has been remitted in INR, converted at [Exchange Rate], contrary to the agreed proportions under Sub-Clause 14.15 [Currencies of Payment].
Accordingly, we hereby notify a Claim under Sub-Clause 20.2 [Claims For Payment] for the losses incurred due to foreign exchange rate deviations and breach of payment method.
We reserve the right to submit full particulars in accordance with Sub-Clause 20.2.4 within the stipulated 84-day period.
Yours sincerely,
[Contractor’s Name]
Contract Manager
📄 Sample Letter 3: Request for Alternative Currency Due to Regulatory Restrictions
Applicable Clause: Clause 13.4 (FIDIC 1999) or Sub-Clause 14.15 + Exceptional Events (2017)
To: The Engineer / The Employer
From: The Contractor
Subject: Request for Alternative Currency Payment – Currency Restriction in [Country]
Date: [Insert Date]
Dear Sir/Madam,
We write to bring to your attention a recent change in regulatory policy from [Central Bank Name], effective [Date], which restricts outbound remittances in [Currency] for government-funded infrastructure projects.
As this directly affects our ability to receive the agreed payment in [Currency] under Clause 13.4 / Sub-Clause 14.15, we respectfully request a consultation to agree on an alternative payment mechanism or substitute currency.
We propose that, pending resolution, the payment may be made in [INR or other] at the prevailing [RBI or central bank] exchange rate as of the certification date.
We look forward to your urgent response, so as to ensure continuity of our financial operations.
Yours sincerely,
[Contractor’s Name]
Finance Lead
📄 Sample Letter 4: Clarification on Variation Payment Currency Split
Applicable Clause: Clause 13.4 + Clause 13.1/13.3 (1999) or Sub-Clause 14.15 + 13.3 (2017)
To: The Engineer
From: The Contractor
Subject: Clarification on Currency Allocation for Variation [No. XX]
Date: [Insert Date]
Dear Sir,
We refer to the approved Variation No. [XX] valued at [Amount], relating to [describe scope change].
As the Contract provides for payment in multiple currencies per Clause 13.4 / Sub-Clause 14.15, we seek your confirmation on whether the original payment proportions (e.g., 70% INR / 30% USD) will apply to this Variation.
If the Variation involves primarily imported materials, we propose allocating [XX]% to the foreign currency component.
Kindly advise your determination under Clause 3.5 / Sub-Clause 3.7 at your earliest convenience.
Yours faithfully,
[Contractor’s Name]
Commercial Manager