Techno Legal Cell

Settlement of Disputes through Arbitration

Clause 25 of the standard Form No. CPWD 7 and 8 and other relevant clauses in Form No. CPWD 9, 11, 11 A and 12, provides for appointment of an Arbitrator in case of questions and disputes relating to certain matters, specified therein arising at any stage, whatever, between the parties to the contract. It is the term of this clause that the arbitration shall be conducted in accordance with the provision of Arbitrations & Conciliations Act 1996 (26 of 1996).

Settlement of Dispute through Dispute Redressal Committee (DRC)

In 2011, to redress the disputes with the contractor in accepting any decision of a competent authority on any matter relating to a contract, in all contract agreements there is mechanism of Standing Committee, convened by the Additional Director General, for each Zone in the Region. The Chief Engineer shall refer the matter to the Committee for adjudication. The contractor shall only be entitled to invoke the arbitration clause 25 after exhausting the remedy available under the Dispute Redressal Committee and/or in accordance with the conditions of the contract clauses.

Appointment of Arbitrator

The contractor gives a list of all disputes to the CE. Except the action taken under clause 2 for levy of compensation for delay in execution of work and other clauses where exceptions have been provided, all the disputes are referred to the arbitrator. The Government of India have appointed a panel of Arbitrators in the Ministry whose offices are located in New Delhi, Mumbai & Kolkata. Generally, the disputes are referred to the Sole Arbitrator out of one of them. The CE appoints an arbitrator within 30 days from the receipt of such request for appointment of arbitrator in standard format within 120 days of the intimation to the contractor about preparation of final bill or within 30 days of rejection of his claims by the Chief Engineer as contained in Section 11 of Arbitration Act, 1996. If the CE fails to do so, then, the appointment can be made, upon the request of the party, by the Court. The contractor cannot have recourse to Court of Law for Redressal of his grievances unless he has exhausted the channel of arbitrator.

Award with Reasons

The sole Arbitrator gives separate award against each claim and in all cases if the total amount of all claims in dispute is Rs. 1 lac and above, the Arbitrator has to give reasons for the award.

The authority of the appointed Arbitrator does not become revocable except with the order of the Court. The sole Arbitrator shall adjudicate the matter within 4 months. However this period is extendable with the consent of both the parties.

Limitation Time for Appeal

The application for correction of award under Section 33 is required to be made within period of one month from the receipt of award. The application for setting aside the award is to be made within 3 months. Further, if however, the court is satisfied it can condone the delay of 30 days but not thereafter. Under Act of 1940, the award was only enforceable by the leave of the court and after making a decree. But in the Act of 1996, the Arbitrator’s award is deemed to be a decree of Court after a period of 3 months has elapsed and no application can be made for challenging the arbitration award. Techno Legal Cell headed by Superintending Engineer, attached with the CE (CSQ), handles all Arbitration cases and related matters, where the claim amount exceeds Rs. 30 (excluding interest) lakh. The SE (TLC) at HQ looks after the cases of New Delhi & Delhi regions. The cases of other regions are looked after by SE (TLQA) of concerned region.

The powers for acceptance or challenging arbitration award to officers are given below:

                                        CE                           -Award amount i/c interest            - 15 Lacs

                                        ADG                         -do                                           -45 Lacs

                                        DG( W)                -do                                           -Full powers

Vetting of CSF /SF

TLC units scrutinize the CSF/SF for the cases where claim amount exceeds Rs.30 lakhs (excluding interest) and render necessary advice to the Executive Engineer/Superintending Engineer regarding defence of the case. Section 35 of CPWD Works manual deals the matter in detail.