CONTENTS - Central Public Works Department

SECTION 35
SECTION 35
ARBITRATION AND LITIGATION CASES
35.1 Dispute Redressal Committee (Modified as per OM/MAN/233)
In order to drastically reduce the number of cases filed by the contractors for arbitration, and to redress
the disputes with the contractor in accepting any decision of a competent authority on any matter relating
to a contract there shall be a Standing Committee, convened by the Additional Director General, for each
Zone in the Region, comprising of the following Members:
(A) For total claims more than Rs. 25.0 lakh
(a) One Chief Engineer (Chairman) (other than under whose jurisdiction work falls)
(b) Superintending Engineer(TLCQA)/ Director works.
(c) One Superintending Engineer (other than under whose jurisdiction work falls)
(d) The SE in-charge of the work shall present case before DRC but shall not have any part
in decision making.
(B) For total claims up to Rs. 25.0 lac
(a) Superintending Engineer (TLCQA) / Director works, (Chairman)
(b) Two Executive Engineers other than EE under whose jurisdiction the work falls.
(c) The Executive Engineer in-charge of the work shall present the case before DRC but
will not have any part in decision making.
(2) In the first instance, the Executive Engineer, Superintending Engineer, or the Chief Engineer shall
positively give his decision on any matter relating to the contract, for which he is competent to do
so. If the decision so given is not acceptable to the contractor due to any legitimate reason, efforts
shall be made to reason with the contractor to arrive at a consensus that is reasonable and legitimate
under the terms and conditions of the contract. If, however, no consensus can be reached, the
matter shall be referred to the next higher authority, and if no consensus can be reached at that
level too, then the Chief Engineer shall refer the matter to the Committee for adjudication. In other
words, cases shall be referred to the Committee only after exhausting all other remedies available
with the officers of the department who are a party to the contract.
(3) The Superintending Engineer and his Executive Engineer, who are parties to the contract under
dispute, shall present the case of the department before the Committee, alongside the contractor
who shall present his case. The Committee shall hear both the parties, and suggest an amicable
and legitimate solution to the problem, based on the principle of equity and natural justice. If the
same is acceptable to both the parties, it shall be accepted by the officer in the department under
whose competence the matter falls, and conveyed for implementation. If, however, the Committee
fails to resolve the issue, the decision taken by the competent authority of the department in the
matter would stand. It would then be up to the contractor to either accept it, or to apply for arbitration
under the provisions of the contract.
(4) Wherever such a Dispute Redresal Committee is constituted in a Region, suitable provisions for
the same should be made part of NIT that ADG in charge shall be the competent authority
to constitute DRC comprising members mentioned above. This shall be incorporated in
the Schedule of CPWD 7/8, and shall form a part of the contract.
The DRC shall have to give decision on the claims of contractor or department within three
months of receipt of reference. If no decision is given by DRC within three months then
claimant shall be at liberty to seek appointment of arbitrator.
In case, either department or contractor is not satisfied with the decision of DRC, each can
seek appointment of arbitrator.
The contractor shall only be entitled to invoke the arbitration clause after exhausting the remedy
available under the Dispute Redressal Committee.
35.2 Application of arbitration clause 25 of standard contract form
(1) Clause 25 of the standard Forms No. CPWD 7 and 8 and other relevant clauses in Forms no.
CPWD 9, 11, 11 A and 12, provides for appointment of an Arbitrator in case of questions and
disputes relating to certain matters, specified therein arising at any stage, whatever, between the
parties. This, however, does not apply to action taken under following clause where the decision
of the specified officer is final to the extent given below:
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