Presented By : Vivek Tyagi

Type of Contracts

Mainly Two Type of Contract with Civil Contractors are

followed in HSCC :-

 Contract based on FIDIC (International Federation of

Consulting Engineers) model.

 Contract based on CPWD model

Settlement of Disputes Under
FIDIC Model
 Clause 67 of General Conditions of Contract Deals With
Settlement of Disputes
Three tier mechanism is provided for settlement of Dispute
between parties i.e. Employer and Contractor and vice
versa
Stage -01 :- Engineer’s Decision (Ref:- GCC Clause 67.1 )

Stage -02 :- Conciliation (Ref :- GCC Clause 67.2 )

Stage-03:- Arbitration (Ref:- GCC Clause 67.3)

 GCC Clause 67.1 :- Engineer’s Decision
The preconditions to be full filled before invoking this clause are :-
1. There has to be DISPUTE between the Parties
2. DISPUTE is to be in connection with or arising out of, the
Contract
3. Stage when DISPUTE can arise :-
a. During the execution of the Works
b. After completion,
c. Before or after repudiation (refusal to perform the duty or
obligation owed to the other party) or other termination (the
process whereby an end is put to whatever remains to be
performed there under ) of the Contract.
 Procedure Stipulated Under Clause
GCC 67.1
1. Party raising the Dispute in the first place, referred the Dispute in
writing to the Engineer.
2. Notice of decision by Engineer to the Employer & Contractor
within 84 days from the receipt of reference.
3. If the party (Employer or Contractor) dissatisfied with the decision
of Engineer OR Engineer fails to give notice of decision within 84
days then the party within 70 days as the case may be give notice
of intention to invoke arbitration to other party.
4. If no notice of intention to commence arbitration as to such dispute
has been given by either the Employer or the Contractor on or
before the seventieth (70th ) day the said decision shall become
final and binding upon the Employer and the Contractor.
 67.2 Conciliation
The parties have to explore the possibility of conciliation
before Notice of intention to commence arbitration shall
commenced. The Conciliation has to take as per part –III of
the Arbitration and Conciliation Act 1996.
 67.3 :- Arbitration
The Dispute in respect of which the following conditions are satisfied
can be refer to Arbitration by requesting appointing authority to
appoint arbitrator :-
a) The decision, if any, of the Engineer has not become final
and binding pursuant to Sub Clause 67.1 and
b) Conciliation has not been reached as per the provisions
of Clause 67.2
The appointment of Arbitrator shall be made within 30 days of the
receipt of letter of invocation of Arbitration, failing which party can
go to court for appointment of an arbitrator, accordingly the right to
appoint an arbitrator by appointing authority is lost.
Letter of invocation of Arbitration shall also contain the disputes ,
which required adjudication by Arbitrator.
Settlement of Disputes Under
CPWD Model
 Contract Based On CPWD
Three tier mechanism is provide for settlement of Dispute
Stage -01 :- Reference of the dispute by the Contractor within in 15 days
from the date when dispute arose to Reviewing Authority for his decision.
Reviewing Authority shall give its decision within 30 days from the receipt
of contractor letter

Stage -02 :- If the Contractor is dissatisfied by the decision of Reviewing

Authority than within 15 days of the receipt of Reviewing Authorities’s
decision, appeal to the Appellate Authority. Reviewing Authority shall give
its decision within 30 days from the receipt of contractor’s letter

Stage-03:- If the Contractor is dissatisfied with the decision of Appellate

Authority, the Contractor shall within a period of 30 days from receipt of
the decision, give notice to the Client for appointment of arbitrator, failing
which the decision of Appellate Authority shall be final and binding
Contd....
 Contd...
 The appointment of Arbitrator shall be made within 30 days of the
receipt of letter of invocation of Arbitration, failing which party can
go to court for appointment of an arbitrator, accordingly the right to
appoint an arbitrator by appointing authority is lost.

 If the contractor does not make any demand for appointment of

arbitrator in respect of any claims in writing as aforesaid within 120
days of receiving the intimation from the Engineer-in-Charge that
the final bill is ready for payment, the claim of the contractor shall be
deemed to have been waived and absolutely barred and the
Department/Government shall be discharged and released of all
liabilities under the contract in respect of these claims.
Contractor ‘S Default Under
FIDIC Model
GCC Clause 63.1 - Default of Contractor
Under FIDC Contract
Some of the defaults on the part of contractor are as under:-
(a) Repudiated the Contract, or
(b) without reasonable excuse has failed
(I) to commence the work in accordance with Sub-Clause
41.1 (Commencement of Works), or
(II) to proceed with the Works, or any section thereof, within
28 days after receiving notice to pursuant to Sub-Clause
46.1 (notice to expedite the Progress of work) or
(c) has failed to comply with a notice issued pursuant to Sub-Clause 37.4
(Rejection), or an instruction issued pursuant to Sub-Clause 39.1 (Removal
of Improper Work, Materials or Plant) within 28 days after receiving it, or
(d) despite previous warning from the Engineer, in writing, is otherwise
persistently or flagrantly neglecting to comply with any of the obligation
under the Contract, or
(e) has contravened Sub-clause 4.1 (Sub-Contracting)
Steps to be Taken When Contractor is in Default
Step- 01 :- Engineer certifies to the Employer, with a copy to the
Contractor that, in his opinion the contractor has
defaulted.
Step -02:- That after issuance of the Engineer’s Certification the
Employer after giving fourteen days' notice to the
Contractor, enter upon the Site and expel the Contractor
there from. The expulsion of Contractor from the
site not make the Contract void, the Contractor is
also not released from any of his obligations or
liabilities under the Contract, The rights and powers
conferred on the employer or the Engineer are not C
affected.
Contd.....
 Contd...
Step -03 :- After the expulsion the Engineer shall fix determine ex
parte, or by or after reference to the parties or after
such investigation or enquiries as he may think fit to
make or institute, and shall certify :

(a) what amount (if any) had, at the time of such

entry and expulsion, been reasonably earned
by or would reasonably accrue to the
Contractor in respect of work then actually
done by him under the Contract, and
Contd.....
 Contd...
(b) the value of any of the said unused or partially used
materials, any Contractor.

The following action can be taken after expulsion of Contractor from the Site:-

The balance work can be completed by the Employer or the Employer may
employ any other contractor to complete the Works at the risk and costs

The Employer may, at any time, sell any of the said Contractor's Equipment,
Temporary Works and unused Plant and materials and apply the proceeds
of sale in or towards the satisfaction of any sums due or which may become
due to him from the Contractor under the Contract.
Contractor ‘S Default Under
CPWD Model
Ground for Determination of Contract under CPWD
Model
Some of the Defaults of Contractor which result into Determination of
Contract
a. Failed to rectify the defects within in seven days after notice is
served by Engineer-in –charge .
b. Suspended the progress of the work or has failed to proceed
with the work with due diligence and continue to do after
the notice of seven days is served upon him by Engineer –in –
charge
c. Fails to complete the work within the stipulated date or items
of work with individual date of completion, if any and does
not complete them within the period specified in a notice
given in writing in that behalf by the Engineer-in-
Charge.
Contd.....
 Contd.....
d. Persistently neglects to carry out his obligations under the
contract and / or commits default in complying with any of the
terms and conditions of the contract and not remedy it or take
effective steps to remedy it within 7 days after a notice in
writing is given to him in that behalf by the Engineer-in-Charge.

e. Assigns, Transfers, Sublets or otherwise parts with or attempts to do

the same the entire works or any portion thereof without the prior
written approval of the Engineer-in-Charge

If the contractor committed defaults, then Client/Employer has the power

to determine the contract by serving the termination notice under the hand
of Engineer-in- charge.
 Effect of Determination of the Contract
1. The following shall be liable to be forfeited and shall be
absolutely at the disposal of the Client
 Earnest Money Deposit,
 Security Deposit
 Performance Guarantee
2. Take the unexecuted work from the hand of Contractor
and to give it to another contractor to complete the work.

3. The Contractor, whose contract is determined, shall not be

allowed to participate in the tendering process for the
balance work
 Performa -Types
1. Engineer’s Certification (GCC Clause 63.1)
2. Expulsion Notice (GCC Clause 63.1 )
3. Record Note to be executed at the time Expulsion of
Contractor from Site
4. Reference (GCC Clause 63.2)
5. Show Cause Notice (under GCC Clause 3 CPWD
Contract)
6. Notice on Final Action (determination of Contract by
termination, CPWD Contract)

Note :- The Performa of the above are enclosed with the hard copy of this presentation. However this draft Performa’s
is only illustrative and needs to be amended on the facts and circumstances of as and when required).
Thank You