The Ingenieur Vol. 65 Water Power | Page 69

default or negligence of the contractor and/or its sub-contractors. It can also happen that the employer and/or its authorised agents21 are the parties responsible for the defaults, omissions, acts or negligence giving rise to claims especially by third parties. Hence, it is common practice for the parties to incorporate relevant indemnity provisions in their contracts to protect themselves against such claims that are caused by the other. Accordingly, one party will expressly undertake the obligation to make good for defined damages, costs, losses, etc incurred by the other as a consequence of one or more agreed events or instances that are attributable to it or caused by it. 22 Whilst, it is common practice in other jurisdictions for both parties to provide such indemnities, in Malaysia, it appears that the onus lies only on the contractors and the subcontractors. Indemnity Clauses: Construction It is trite law that an indemnity clause is strictly construed by the courts, ie by the application of the ‘contra proferantum’ rule of construction.23 In Walters v Whessoe Ltd and Shell Refining Co Ltd,24 Lord Devlin stated: If a person obtains an indemnity against a consequence of certain acts, the indemnity is not to be construed so as to include the consequences of his own negligence unless those consequences are covered either expressly or by necessary implication. Further and in addition to the above, the following matters need to be taken due cognisance of: 21 22 23 24 25 26 27 28 29 30 31 32 ●● ●● ●● ●● ●● there is a general presumption that unless very clear words are used,25 the indemnity will not be held to cover loss or damage caused by the indemnified party’s own negligence: AMF International Ltd v Magnet Bowling Ltd;26 the second exception to the said presumption is the situation that there is no other type of loss which the indemnity clause could have been intended to cover: Dorset County Council v Southern Felt Roofing Co Ltd;27 an indemnity clause will also be strictly construed in a situation where it seeks to hold a party liable for the defaults of any persons other than themselves and over whom they have no control: City of Manchester v Fram Gerrard Ltd;28 the liability of a party under an indemnity clause does not crystallise until the loss or damage suffered by the other party has been established: County and District Properties Ltd v C Jenner & Son Ltd; 29 and since it is from this time that the limitation period runs under the relevant Limitation Act or Ordinance,30 that an appropriately drafted indemnity clause can effectively extend the period of l [Z]][ۈ