MEASURES TO REDUCE
DISPUTE IN PROJECTS
Programme on Emerging Trends in
Contract Management & Dispute
Resolution.
Maj.Gen Nilendra Kumar
Director, Amity Law School
&
Dean, Faculty of Law
Amity University
What is a Project?
 A project in business is typically
defined as a collaborative
enterprise.
 It may also be termed as a temporary

endeavor undertaken to create a
unique product, service or result.
Examples
1. Project for construction of new key

location plan.
2. Married accommodation project.
3. Project to augment wa...
What is a dispute?
Dispute
means
 A quarrel, controversy or an angry

altercation.
Differing claims or divergent
perceptions.
Why do the disputes take place?
What leads to disputes or in other
words the causes for disputes?
COMMON CAUSES

1.
2.
3.
4.

Trade Union rivalry.
Labour unrest
Legal intervention
Management of funds resulting in
shortag...
5. Delay in obtaining regulatory
clearances
6. Land acquisition problems
Reasons for delayed clearances
1.
2.
3.
4.

Environmental
Security
Safety
Overriding authority of other
agencies or depart...
Nine categories of delay
Delay at project level
 Original contracts duration is too

short
 Legal dispute between various
parties
 Ineffective d...
Owner Group
1. Delay in progress due to payments

by owner
2. Delay to furnish and deliver the site
to the contractor by t...
Example
In fighting amongst co-owners of
land
Contractor Group
1. Difficulties in financing project by
contractor
2. Conflicts among subcontractors
engaged in execution...
Consultant Group
1. Delay in performing inspection and

testing
2. Delay in approving major changes in
the scope of work b...
Example
1. Remove plinth protection
2. Steel door frames instead of teak

wood
Design Group
1. Mistakes and discrepancies in

design documents
2. Delay in producing design
documents
May be due to rivalry or lack of
adequate accountability
Material Group
1. Shortage of construction material

in market
2. Changes in material types and
specifications during the
...
May be shortages in steel, cement,
bricks or sanitary fittings
Equipment Group

1. Equipment break down
2. Equipment shortage
Labour Group

1. Shortage of labour
2. Unqualified work force
3. Low productivity level of workers
External Group
1. Effects of subsurface conditioning
(e.g. soil, high water table)
2. Delay in obtaining municipal
permits...
Effect of a dispute
Dispute may lead to a lock out
LOCK OUT
 A lockout is a temporary work

stoppage or denial of employment
during the course of a dispute. It is
initiated...
How to resolve the dispute?
OVER ALL OBJECTIVE
To end the dispute make efforts to
remove or reduce tension or conflict.
A dispute mechanism is a structured
process that addresses disputes
between two or more parties.
Dispute mechanism offers an
effective tool for establishing
communication channels between
the parties.
 Call the other side.
 At the first stage, get into a

dialogue.
 Talk it cover.
 Give a patient hearing.
Negotiation is a dialogue between two
or more people or parties, intended to
reach an understanding, resolve points
of dif...
 However, negotiations may not

always succeed to resolve the
dispute.
EXAMPLES
 Singur Tata Nano Controversy.
 The land acquisition controversy

during 2008.
 Maruti Suzuki industrial unrest at

Manesar, Haryana during Oct 2011
KUDANKULAM NUCLEAR
POWER PLANT
 Protest by thousands of persons

against the plant fearing a
Fukushima like disaster.
TATA MOTORS
Forced to abandon their project in
West Bengal.
CONSTRUCTION PROJECTS
 Judicial intervention on account of

low payments for land acquired in
Greater Noida.
 As of January 1,2013 of the total 566

infrastructure projects in India, 276
were delayed. The estimated cost of
these p...
 Causes for the project delayed was

due to green clearances and other
reasons.
 The list of delayed infrastructure

projects include the $90 billion
Delhi-Mumbai industrial corridor
and the $12 billio...
TIME & COST OVERRUNS IN DRDO
PROJECTS
 Costs have gone up from an original

estimate of Rs 3,300 crores to over
Rs. 5,789...
DISPUTE RESOLUTION
METHODS
1. Judicial
2. Extra judicial
MEASURES TO REDUCE
DISPUTES
1. Anticipate and seek all regulatory

clearances.
2. Forecast realistic financial
implication...
1. Establish and maintain cordinal

labour relations.
2. Effective use of ADR to sort out
differences.
3. Vigilant defence...
OTHER EFFECTIVE TOOLS

1. Periodic reviews.
2. Web based monitoring system.
 Prepare for the worst case scenario.
 Keep a safety time.
Education and training of engineers
Measures initiated by the Prime Minister
of India during June 2012
Setting up of an investment tracking
system. This will review projects
periodically to ensure that issues are
quickly iden...
Public sector projects with an
investment of Rs 10 billion or more
will be monitored by National
Manufacture Competitive C...
Judicial Method
1.
2.
3.
4.

Judicial Recourse
Arbitration
Mediation
Lok Adalats
Arbitration
 It is a technique for the resolution

of disputes outside the courts,
where the parties to a dispute refer
i...
APPLICABLE STATUTE

The Arbitration
and
Conciliation Act, 1996
Based on UNCITRAL Model Law on
international commercial arbitration and
conciliation.
The process of arbitration can start only
if there exists a valid arbitration
agreement between the parties prior to
the e...
 Arbitration can be either voluntary or

mandatory.
Mediation
 A settlement of a dispute or

controversy by setting up an
independent person between two
contending parties i...
A mediation has often been defined as
assisted negotiation.
 The mediator’s primary role is to act

as a neutral third party who
facilitates discussion between the
parties.
 Mediation differs from arbitration in
which the third party (arbitrator) acts

much like a Judge but in an out ofcourt l...
Advantages of Mediation
 Cost of litigation much less
 Confidentiality
 Control
 Compliance
 Mutuality
 Support
CONCILIATION
 Conciliation is an ADR process

whereby the parties to a dispute
use a conciliator who meets with
the parti...
It is a less formal form of arbitration
Any party can request the other party to
appoint a conciliator. One conciliator is
preferred but two or three are also
all...
If a party rejects an offer to conciliate,
there can be conciliation.
PRINCIPLES

1.
2.
3.
4.

Non-adversial nature of proceedings
Voluntary nature of process
Flexible procedure
Decisions are ...
LOK ADALAT

1. ‘Lok Adalat’ means people’s court.
2. There is no court fee; and no rigid

procedural requirements.
3. Pend...
4. The focus on ‘Lok Adalat’ is on

compromise. When no compromise
is reached, the matter goes back to
the court.
5. Every...
ADVANTAGE OF TIMELY
COMPLETION OF PROJECTS
 L&T ‘s Q2 net up 42.5% on

completion of projects.
CONCLUSION
 Timely completion of projects with

optimal use of resources not only
influences the profitability of the
com...
The process of dialogue mutual
accommodation and a positive
approach would contribute to
dispute resolution.
Upcoming SlideShare
Loading in...5
×

Measures to Reduce Dispute in Projects

176

Published on

Disputes in management and execution of contracts contribute to huge losses upsetting the time schedule. Law professionals can be suitably engaged to eliminate scope for disputes and for efficient operation of contracts.

Published in: Business
0 Comments
0 Likes
Statistics
Notes
  • Be the first to comment

  • Be the first to like this

No Downloads
Views
Total Views
176
On Slideshare
0
From Embeds
0
Number of Embeds
0
Actions
Shares
0
Downloads
16
Comments
0
Likes
0
Embeds 0
No embeds

No notes for slide

Measures to Reduce Dispute in Projects

  1. 1. MEASURES TO REDUCE DISPUTE IN PROJECTS
  2. 2. Programme on Emerging Trends in Contract Management & Dispute Resolution.
  3. 3. Maj.Gen Nilendra Kumar Director, Amity Law School & Dean, Faculty of Law Amity University
  4. 4. What is a Project?  A project in business is typically defined as a collaborative enterprise.
  5. 5.  It may also be termed as a temporary endeavor undertaken to create a unique product, service or result.
  6. 6. Examples 1. Project for construction of new key location plan. 2. Married accommodation project. 3. Project to augment water supply. 4. Building of new hospital.
  7. 7. What is a dispute?
  8. 8. Dispute means  A quarrel, controversy or an angry altercation.
  9. 9. Differing claims or divergent perceptions.
  10. 10. Why do the disputes take place?
  11. 11. What leads to disputes or in other words the causes for disputes?
  12. 12. COMMON CAUSES 1. 2. 3. 4. Trade Union rivalry. Labour unrest Legal intervention Management of funds resulting in shortage
  13. 13. 5. Delay in obtaining regulatory clearances 6. Land acquisition problems
  14. 14. Reasons for delayed clearances 1. 2. 3. 4. Environmental Security Safety Overriding authority of other agencies or departments
  15. 15. Nine categories of delay
  16. 16. Delay at project level  Original contracts duration is too short  Legal dispute between various parties  Ineffective delay penalties
  17. 17. Owner Group 1. Delay in progress due to payments by owner 2. Delay to furnish and deliver the site to the contractor by the owner
  18. 18. Example In fighting amongst co-owners of land
  19. 19. Contractor Group 1. Difficulties in financing project by contractor 2. Conflicts among subcontractors engaged in execution of the project 3. Re-work due to errors during construction
  20. 20. Consultant Group 1. Delay in performing inspection and testing 2. Delay in approving major changes in the scope of work by consultant
  21. 21. Example 1. Remove plinth protection 2. Steel door frames instead of teak wood
  22. 22. Design Group 1. Mistakes and discrepancies in design documents 2. Delay in producing design documents
  23. 23. May be due to rivalry or lack of adequate accountability
  24. 24. Material Group 1. Shortage of construction material in market 2. Changes in material types and specifications during the construction
  25. 25. May be shortages in steel, cement, bricks or sanitary fittings
  26. 26. Equipment Group 1. Equipment break down 2. Equipment shortage
  27. 27. Labour Group 1. Shortage of labour 2. Unqualified work force 3. Low productivity level of workers
  28. 28. External Group 1. Effects of subsurface conditioning (e.g. soil, high water table) 2. Delay in obtaining municipal permits 3. Hot weather effects on construction activities
  29. 29. Effect of a dispute
  30. 30. Dispute may lead to a lock out
  31. 31. LOCK OUT  A lockout is a temporary work stoppage or denial of employment during the course of a dispute. It is initiated by the management of a company.
  32. 32. How to resolve the dispute?
  33. 33. OVER ALL OBJECTIVE To end the dispute make efforts to remove or reduce tension or conflict.
  34. 34. A dispute mechanism is a structured process that addresses disputes between two or more parties.
  35. 35. Dispute mechanism offers an effective tool for establishing communication channels between the parties.
  36. 36.  Call the other side.  At the first stage, get into a dialogue.  Talk it cover.  Give a patient hearing.
  37. 37. Negotiation is a dialogue between two or more people or parties, intended to reach an understanding, resolve points of difference to work out an agreement upon course of action.
  38. 38.  However, negotiations may not always succeed to resolve the dispute.
  39. 39. EXAMPLES  Singur Tata Nano Controversy.  The land acquisition controversy during 2008.
  40. 40.  Maruti Suzuki industrial unrest at Manesar, Haryana during Oct 2011
  41. 41. KUDANKULAM NUCLEAR POWER PLANT  Protest by thousands of persons against the plant fearing a Fukushima like disaster.
  42. 42. TATA MOTORS Forced to abandon their project in West Bengal.
  43. 43. CONSTRUCTION PROJECTS  Judicial intervention on account of low payments for land acquired in Greater Noida.
  44. 44.  As of January 1,2013 of the total 566 infrastructure projects in India, 276 were delayed. The estimated cost of these projects was above Rs 150 crores.
  45. 45.  Causes for the project delayed was due to green clearances and other reasons.
  46. 46.  The list of delayed infrastructure projects include the $90 billion Delhi-Mumbai industrial corridor and the $12 billion Posco Steel Project.
  47. 47. TIME & COST OVERRUNS IN DRDO PROJECTS  Costs have gone up from an original estimate of Rs 3,300 crores to over Rs. 5,789 crores.
  48. 48. DISPUTE RESOLUTION METHODS 1. Judicial 2. Extra judicial
  49. 49. MEASURES TO REDUCE DISPUTES 1. Anticipate and seek all regulatory clearances. 2. Forecast realistic financial implications and arrange funds. 3. Strict adherence to environmental norms.
  50. 50. 1. Establish and maintain cordinal labour relations. 2. Effective use of ADR to sort out differences. 3. Vigilant defence of litigation.
  51. 51. OTHER EFFECTIVE TOOLS 1. Periodic reviews. 2. Web based monitoring system.
  52. 52.  Prepare for the worst case scenario.  Keep a safety time.
  53. 53. Education and training of engineers
  54. 54. Measures initiated by the Prime Minister of India during June 2012
  55. 55. Setting up of an investment tracking system. This will review projects periodically to ensure that issues are quickly identified and resolved.
  56. 56. Public sector projects with an investment of Rs 10 billion or more will be monitored by National Manufacture Competitive Council.
  57. 57. Judicial Method 1. 2. 3. 4. Judicial Recourse Arbitration Mediation Lok Adalats
  58. 58. Arbitration  It is a technique for the resolution of disputes outside the courts, where the parties to a dispute refer it, to one or more persons (the arbitrators) by whose decisions they agree to be bound.
  59. 59. APPLICABLE STATUTE The Arbitration and Conciliation Act, 1996
  60. 60. Based on UNCITRAL Model Law on international commercial arbitration and conciliation.
  61. 61. The process of arbitration can start only if there exists a valid arbitration agreement between the parties prior to the emergence of the dispute.
  62. 62.  Arbitration can be either voluntary or mandatory.
  63. 63. Mediation  A settlement of a dispute or controversy by setting up an independent person between two contending parties in order to aid them in the settlement of their agreement.
  64. 64. A mediation has often been defined as assisted negotiation.
  65. 65.  The mediator’s primary role is to act as a neutral third party who facilitates discussion between the parties.
  66. 66.  Mediation differs from arbitration in which the third party (arbitrator) acts much like a Judge but in an out ofcourt less formal setting but does not actively participate in the discussion.
  67. 67. Advantages of Mediation  Cost of litigation much less  Confidentiality  Control  Compliance  Mutuality  Support
  68. 68. CONCILIATION  Conciliation is an ADR process whereby the parties to a dispute use a conciliator who meets with the parties separately in an attempt to resolve their differences.
  69. 69. It is a less formal form of arbitration
  70. 70. Any party can request the other party to appoint a conciliator. One conciliator is preferred but two or three are also allowed.
  71. 71. If a party rejects an offer to conciliate, there can be conciliation.
  72. 72. PRINCIPLES 1. 2. 3. 4. Non-adversial nature of proceedings Voluntary nature of process Flexible procedure Decisions are recommendatory
  73. 73. LOK ADALAT 1. ‘Lok Adalat’ means people’s court. 2. There is no court fee; and no rigid procedural requirements. 3. Pending cases in regular courts can be transferred to a Lok Adalat, if both the parties agree.
  74. 74. 4. The focus on ‘Lok Adalat’ is on compromise. When no compromise is reached, the matter goes back to the court. 5. Every ‘Lok Adalat’ is deemed to be a civil court.
  75. 75. ADVANTAGE OF TIMELY COMPLETION OF PROJECTS  L&T ‘s Q2 net up 42.5% on completion of projects.
  76. 76. CONCLUSION  Timely completion of projects with optimal use of resources not only influences the profitability of the company but also gives it competitive advantage.
  77. 77. The process of dialogue mutual accommodation and a positive approach would contribute to dispute resolution.
  1. A particular slide catching your eye?

    Clipping is a handy way to collect important slides you want to go back to later.

×