Saraf and Partners in collaboration with Society of Construction Law, India organized a Symposium on “Issues Arising out of Construction Contracts: Advocacy & Evidence” at Firm’s Delhi (NCR) office. The symposium celebrated the growth and revolution of the Construction sector, discussing and deliberating on some of the key pertinent issues, challenges, and opportunities through knowledge session with leading experts from the industry encapsulating their perspective, views and deep insight on the latest developments and trends in the field of construction contracts.
The Symposium brought together a congregation of more than 150 participants consisting of honourable Judges of Supreme Court of India and High Court, Senior Advocates, General Counsels from multinational companies such as Larsen & Toubro, GMR Group, DLF, Dalmia Bharat Group, Ernst and Young, Cube Highways etc and luminaries from the legal fraternity.
Honourable Mr. Justice N.V. Ramana, Former Chief Justice of India, inaugurated the Symposium as the Chief Guest and said most of the arbitration in India is taking place with respect to construction projects. While talking about the current scenario, Justice Ramana expressed his gracefulness regarding the liberal interpretation of arbitration law and the importance accorded to party autonomy in India. In terms of the infrastructural developments in the field of arbitration, Justice Ramana conveyed his appreciation regarding the establishment of arbitration centres such as the Delhi International Arbitration Centre, the International Mediation and Arbitration Centre at Hyderabad, and another one coming up in the State of Gujarat. He discussed how there were several factors for this progress in the field of arbitration such as a high volume of business, increasing investments in the nation, well-trained members, and improved infrastructure.
The Symposium Chair of the Summit, Dr. Abhishek Manu Singhvi, Senior Advocate concurred with Justice Ramana and spoke about the need for comprehensive pre-litigation assessment in terms of evidence by lawyers which would amount to humongous documentation and would require precise case management. Next, Mr Singhvi raised an important issue regarding how the members of the legal profession, such as lawyers and arbitrators, respond to this new and exciting phase of construction development. He concluded by saying "How a district judge in Guwahati looks at an award is different than how a Delhi High Court judge or a commercial judge looks at it in Mumbai, since judging is human exercise, and unless there is repeated training etc it is difficult to achieve this homogeneity.”
Explaining the rationale behind this symposium in the welcome address, Mohit Saraf, Founder & Managing Partner, Saraf and Partners, deliberated upon the significance of construction and infrastructure projects. He noted that the allocation of Rs 10 lac crore towards capital expenditure in the recent union budget demonstrates government focus towards construction and infrastructure led growth. While sharing his view on achieving the goal of USD 5 trillion Indian economy in the next 5 years, he emphasised that we roughly need more than a Trillion USD (USD 1000 Billion) investment in capacity creation i.e. through various forms of construction contracts which translates to over 8 lac crores in Indian Rupees terms. He further said “infrastructure and construction have a huge multiplier effect on the economy - an absolute necessity for any model of growth and development. Therefore, we are due to witness an explosion in construction contracts, and even larger number of constructions related arbitrations.”
The Knowledge session commenced on a high note with eminent panelists - Senior Advocate and member of Keating Chambers in the UK, Ratan K Singh who spoke about the various delays that occur in construction contracts and ways how to avoid them. Elucidating on the same, he remarked “At the end of day problem is, and we need to agree, that every delay is not a delay for construction dispute, unless the delay delays the completion date; it is not delay and contractor is not entitled for prolongation claim. There must be disruption claims for productivity loss, but all delays are not delays.” Expanding on it further he highlighted the need to look at ‘critical delay’, saying “When prolongation claims come, first requirement is that delay should be critical delay and therefore, identification of critical delay is needed, and till that doesn’t happen, there is no reasoned award.” Talking further on the point of construction contracts not just being advanced form of contracts, he remarked how ten commercial arbitrations are equal to one single arbitration related to construction contracts, since they (construction contracts) are unique in terms of jurisprudence of construction law, with special concepts like ‘substantial performance’ (used heavily in such matters), having its own consequences in relation to EPC contracts.
Partner of US-based law firm Jones Day, Julian Bailey, spoke extensively about claim issues that arise in construction contracts, and how such disputes usually end up with focus on liability on contractors. Speaking on the issue of delay claims in construction contracts and associated liability, he pointed out that “if we’re looking at a project that has been delayed, and we ask the question ‘Why has this project been delayed?’, the answer we might get is, through a multitude of causes, some of which are the responsibility of one party, some of which are the responsibility of the other.” He later went on to state how concurrent and parallel delays are yet another challenge in determining an ‘Extension of Time’ and the subsequent liability arising out of a delay, if at all.
David Thomas KC from the Keating Chambers elucidated upon the aspect of delays in construction contracts, with focus on conditions precedent to rely on or avoid in case of liability. He further deliberated upon common law pleadings in such cases and how “in cases of delay, it is very important to identify the elements of one’s contractual clauses that one can rely on and one needs to plead in relation to causation. It is important to note that ‘delay to completion’ matters, not just a delay to a certain event.” He further talked about the role of delay experts in such cases, saying that the most important piece of support one can get from a delay expert is in analysing the critical path of a case and understanding the issues that one needs to tackle in order to facilitate a quick disposal or settlement of the dispute.
The industry veterans recounted their experience of growth and success with the audience, echoing the immense opportunities for entrepreneurs and professionals in the construction sector.
The Symposium witnessed a gathering of eminent participants including Hon'ble Mr. Justice R.S. Endlaw, Hon'ble Mr. Justice A K Patnaik, Dr. Lalit Bhasin, Mr. Abhinav Vasisht, Mr. Amar Patnaik, Mr. Anuranjan Prasad, Dr. Atul Sud, Mr. Chaitanya Arora, Mr. Hemant Kumar, Mr. Joy Basu, Mr. Kalyan Ghosh, Mr. Manik Dogra, Mr. Manish Lamba, Mr. Naseer Kabir, Mr. P.V. Kapur, Mr. Parag Tripathi, Mr. Raian N. Karanjawala, Mr. Rajiv Choubey, Mr. Ravi Sabharwal, Mr. Ravi Sikri, Mr. Saurabh Kripal, Mr. Sudhir Makkar, Mr. Sanjeev Sen, Ms. Sujatha Balachander to name a few, and was followed with Cocktails & Dinner in the evening at the Firm’s office lawn.