India: Reduce Construction Disputes To Accelerate India's Infrastructure Rollout

Last Updated: 28 September 2015
Article by Ranjit Prakash and Anshuman Pande

It is important to demystify the conundrum of construction disputes, so that India can accelerate its infrastructure growth and wasteful disputes are avoided.

Infrastructure projects in India are hamstrung with schedule delays and, therefore, cost overruns. As per flash report released by Ministry of Statistics in August 2014, as many as 295 infrastructure sector projects worth Rs 150 crore or more were delayed with total cost overrun of over Rs 1 lakh crore. Concerns including land acquisition, timely approvals and shortage of resources, including infrastructure, are the primary bottlenecks faced by the project stakeholders and have been well-documented. However, other significant causes for these delays are change of project's scope, shortage of manpower and technical resources, lack of planning and finance management, to name a few. Delays (and even rampant delays) are clear and present risks for infrastructure projects in India.

It is somewhat of a contradiction, therefore, that while most project contracts identify causes and provide for mechanisms to deal with delays, legal disputes between developers and executing agencies (contractors) related to time overruns appear to have been increasing over the past few years. These rising incidences have serious time and cost implications, not only for these two sets of parties, but also for the project at large. It is, thus, important to demystify the conundrum of construction disputes, so that India can accelerate its infrastructure growth and wasteful disputes are avoided.

The genesis of such disputes is usually the delay clause in the contract itself – which imposes stiff legal ramifications upon the party responsible for the delay. Such defaulting party would not only be barred from claiming its contractual remedies for delay (which include monetary compensation, the power to disengage from the contract, compensation for special losses and the like), but may also become legally liable to the other party for recompense of losses. Losses involving goodwill and reputation, as well as the possibility that the future of the project may be seen to be in jeopardy, would, in any case, be grievous in the event of a contractual default.

Unsurprisingly, when the time comes to ascertain the causes and to determine the way ahead, both developer and contractor start passing the buck upon each other and expend a lot of time and energy in hurling accusations and proclaiming innocence. Further, each party commissions one-sided 'causes of delays' reports ascribing the reasons upon the other. In fact, to bolster their positions, parties usually start making paper trails almost from the 'Day Zero' of the construction – since legal evidence of a party's stand is based upon the documents it relies on. Such papertrails include vaguely worded correspondences, written records of meetings and decisions, and technical records to avert any legal liability. The absence of any impartial delay analysis and poor recordkeeping complicates the ascertainment of the actual causes of delays.

Moreover, in the absence of clarity on causes of the delay, at times one or both parties do not even formally acknowledge the incidence of a delay and hope that the work continues unabated into delayed time.  They often postpone resolution of critical questions, such as:

  • What are the revised timelines for the works? If not, the timeline may be legally deemed to be open-ended and loose, leaving both sides unsure as to the longevity of the project construction;
  • What is the effect of the delay over the remaining works and how would both parties apportion the responsibility to meet the same? This is an important question, especially if such delays lead to a domino effect and cause further overruns;
  • How would cost overruns be met once the works are carried out into delayed time? How would escalated costs of resources, to take one example, be revised, especially in cases of fixed price or lump-sum contracts?
  • If the cause of the delay is contentious, should a party even continue with the project, especially if the other party is shifting blame? The other party is unlikely to change its stand once issues escalate towards a legal dispute.

Parking these issues aside may avoid short-term adverse ramifications to the projects. However, in our experience, these may get further obscured with time, especially as delays have a snowball effect upon all works onsite. Leaving timelines open-ended takes away the legal sanctity of time-bound completion. In most cases, the progress of construction even in the delayed time is in fits and spurts and is usually, never smooth.

It is, therefore, vital that clauses in the contract should be carefully drafted. This would ensure that in the event of an overrun, there are provisions for fresh timelines and the risks and responsibilities of each party can be exhaustively defined, without much ambiguity. The clauses should also provide for protocols and mechanisms for deciding the way ahead. Delay analysis should be exhaustive and objective – possibly coupled with a signoff from a pre-agreed, independent party acceptable to both sides.

If disputes still arise, then parties should take a call on their remedies expeditiously rather than stalling the resolution of issues that would affect the project's progress and their own legal/contractual recourses.

Finally, the need of the hour is honest and transparent dealing between the parties to a project contract – not only through careful contract mechanisms, but also by realistic project management. While it is undeniable that external factors beyond control of both parties do play a major role in delays, the developers and contractors do not help the situation by hurling charges, hiding behind opaque clauses and relying upon reams of paper trails. Such actions only delay the project construction further and most often end up in courts or dispute-resolution forums.

Originally published by Business Standard.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Similar Articles
Relevancy Powered by MondaqAI
Khaitan & Co
In association with
Related Topics
Similar Articles
Relevancy Powered by MondaqAI
Khaitan & Co
Related Articles
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions