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.

1. MEASURES TO REDUCE
DISPUTE IN PROJECTS

2. Programme on Emerging Trends in
Contract Management & Dispute
Resolution.

3. Maj.Gen Nilendra Kumar
Director, Amity Law School
&
Dean, Faculty of Law
Amity University

4. What is a Project?
 A project in business is typically
defined as a collaborative
enterprise.

5.  It may also be termed as a temporary
endeavor undertaken to create a
unique product, service or result.

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. What is a dispute?

8. Dispute
means
 A quarrel, controversy or an angry
altercation.

9. Differing claims or divergent
perceptions.

10. Why do the disputes take place?

11. What leads to disputes or in other
words the causes for disputes?

12. COMMON CAUSES
1.
2.
3.
4.
Trade Union rivalry.
Labour unrest
Legal intervention
Management of funds resulting in
shortage

13. 5. Delay in obtaining regulatory
clearances
6. Land acquisition problems

14. Reasons for delayed clearances
1.
2.
3.
4.
Environmental
Security
Safety
Overriding authority of other
agencies or departments

15. Nine categories of delay

16. Delay at project level
 Original contracts duration is too
short
 Legal dispute between various
parties
 Ineffective delay penalties

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. Example
In fighting amongst co-owners of
land

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. Consultant Group
1. Delay in performing inspection and
testing
2. Delay in approving major changes in
the scope of work by consultant

21. Example
1. Remove plinth protection
2. Steel door frames instead of teak
wood

22. Design Group
1. Mistakes and discrepancies in
design documents
2. Delay in producing design
documents

23. May be due to rivalry or lack of
adequate accountability

24. Material Group
1. Shortage of construction material
in market
2. Changes in material types and
specifications during the
construction

25. May be shortages in steel, cement,
bricks or sanitary fittings

26. Equipment Group
1. Equipment break down
2. Equipment shortage

27. Labour Group
1. Shortage of labour
2. Unqualified work force
3. Low productivity level of workers

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. Effect of a dispute

30. Dispute may lead to a lock out

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. How to resolve the dispute?

33. OVER ALL OBJECTIVE
To end the dispute make efforts to
remove or reduce tension or conflict.

34. A dispute mechanism is a structured
process that addresses disputes
between two or more parties.

35. Dispute mechanism offers an
effective tool for establishing
communication channels between
the parties.

36.  Call the other side.
 At the first stage, get into a
dialogue.
 Talk it cover.
 Give a patient hearing.

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.  However, negotiations may not
always succeed to resolve the
dispute.

39. EXAMPLES
 Singur Tata Nano Controversy.
 The land acquisition controversy
during 2008.

40.  Maruti Suzuki industrial unrest at
Manesar, Haryana during Oct 2011

41. KUDANKULAM NUCLEAR
POWER PLANT
 Protest by thousands of persons
against the plant fearing a
Fukushima like disaster.

42. TATA MOTORS
Forced to abandon their project in
West Bengal.

43. CONSTRUCTION PROJECTS
 Judicial intervention on account of
low payments for land acquired in
Greater Noida.

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.  Causes for the project delayed was
due to green clearances and other
reasons.

46.  The list of delayed infrastructure
projects include the $90 billion
Delhi-Mumbai industrial corridor
and the $12 billion Posco Steel
Project.

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. DISPUTE RESOLUTION
METHODS
1. Judicial
2. Extra judicial

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. 1. Establish and maintain cordinal
labour relations.
2. Effective use of ADR to sort out
differences.
3. Vigilant defence of litigation.

51. OTHER EFFECTIVE TOOLS
1. Periodic reviews.
2. Web based monitoring system.

52.  Prepare for the worst case scenario.
 Keep a safety time.

53. Education and training of engineers

54. Measures initiated by the Prime Minister
of India during June 2012

55. Setting up of an investment tracking
system. This will review projects
periodically to ensure that issues are
quickly identified and resolved.

56. Public sector projects with an
investment of Rs 10 billion or more
will be monitored by National
Manufacture Competitive Council.

57. Judicial Method
1.
2.
3.
4.
Judicial Recourse
Arbitration
Mediation
Lok Adalats

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. APPLICABLE STATUTE
The Arbitration
and
Conciliation Act, 1996

60. Based on UNCITRAL Model Law on
international commercial arbitration and
conciliation.

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.  Arbitration can be either voluntary or
mandatory.

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. A mediation has often been defined as
assisted negotiation.

65.  The mediator’s primary role is to act
as a neutral third party who
facilitates discussion between the
parties.

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. Advantages of Mediation
 Cost of litigation much less
 Confidentiality
 Control
 Compliance
 Mutuality
 Support

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. It is a less formal form of arbitration

70. Any party can request the other party to
appoint a conciliator. One conciliator is
preferred but two or three are also
allowed.

71. If a party rejects an offer to conciliate,
there can be conciliation.

72. PRINCIPLES
1.
2.
3.
4.
Non-adversial nature of proceedings
Voluntary nature of process
Flexible procedure
Decisions are recommendatory

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. 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. ADVANTAGE OF TIMELY
COMPLETION OF PROJECTS
 L&T ‘s Q2 net up 42.5% on
completion of projects.

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. The process of dialogue mutual
accommodation and a positive
approach would contribute to
dispute resolution.