Confederation of Indian Industry Singhania & Partners joins 16th Suminfra in Hyderabad

Singhania & Partners LLP is partnering with Confederation of Indian Industry. The CII is organizing the 16th Edition of Suminfra 2019 on 17th & 18th February 2020  in Hyderabad with the theme Integrated Development for Infrastructure in Southern Region.

The  summit will be  showcasing the best practices in infrastructure,  discuss & share experiences on optimum utilization of existing infrastructure, debate critical challenges, and share the latest trends in the infrastructure sector.

Arjun Anand (Partner) at our firm will be speaking in a panel discussion on “Innovative Financial Instruments for attracting private and foreign investments in Infrastructure” on 17th February 2020. He will be joining an elite panel of speakers including Mr Sandeep Upadhyay, (Managing Director – Infrastructure Advisory, Centrum Infra Advisory)

Mr. P R Jaishankar, (Chief General Manager , India Infrastructure Finance Company Limited) Mr Sailesh Pathak (CEO, L&T IDPL) Ms  Sunita Malhotra (Information Specialist World Bank) Mr Kenichi Yokoyama (Country Director  India Resident Mission)

CONTRACT MODIFICATIONS IN PRIVATE CONSTRUCTION CONTRACTS IN INDIA

CONTRACT MODIFICATIONS IN PRIVATE CONSTRUCTION CONTRACTS IN INDIA

Abhishek Kumar


14/02/2020

 

Based on our experience of advising in hundreds of construction contracts in India from draft project reports to dispute resolution across fora, we have observed that following are the top five contract modifications in India-

  1. The current contracts in India are based on public private partnership, whereby government is inviting private parties to come and invest and earn from such investments. Hence, instead of EPC contracts, parties are preferring, concession agreements. In such kind of contracts the contractor invests the entire amount of construction from its own sources and the employer either allows the contractor to collect the user fee, in case of road construction contracts or pays a fixed amount every year as “annuity” for a fixed period.

 

  1. In a concession agreement usually there is a standard clause whereby the employer agrees to pay the amount of “annuity” to the contractor irrespective of any dispute between the parties, and such amount can later be adjusted subject to outcome of disputes between the parties either through arbitration proceedings or through regular civil proceedings.

 

  1. The concession agreements also contain provisions for compensating the contractors for eventualities such as change in law and variations, so that contractors do not suffer unforeseen losses.

 

  1. Majority of the construction contracts in India, either EPC contracts or concession agreements contain an arbitration clause whereby parties express their intention to refer the disputes to arbitration. However as per Indian law mere reference of arbitration in a contract will not make such clause a valid clause, but the intention to arbitrate should be clear and unambiguous.

 

5.       If there is a construction loan financing the project, the contract must contain all the necessary details such as the name and address of the lender

Profile

Ravi Singhania

Ravi Singhania

Managing Partner


Ravi Singhania with more than 25 years of legal practice leads a team of 70 lawyers including 14 partners. Under his leadership the full-service law firm has established itself as a leading Banking & Finance, Projects, Infrastructure, and Energy advisory firm.

Ravi has been bequeathed with innumerable legal accolades and has been consistently rated as India’s top dispute resolution, and project finance lawyer by several international surveys, including those conducted by reputed legal directories like Chambers & Partners, Chambers Asia, RSG Consulting, Legal 500 and Asialaw.

He has been advising World Bank since 2004 on FDI related matters and for their annual publication “Doing Business in India”. There are large PSUs, Banks and MNCs who trust his legal acumen on Public Private Partnership Projects, Investment Structuring, Securitization of Loans, Debt & Equity offering, and Dispute Resolution.

He provides both hands-on legal advice and overall strategic inputs while drafting and negotiating contracts for complex financing transactions, bid process advisory to reflect the clients’ interest at all times. Ravi advises number of ministries, central and states government for divestments and infrastructure related matters. He advises Firm’s esteemed clientele including EPC Contractors for PPP projects in varied sectors like Roads, Railways, Power, Ports, Project Finance, Banking & Technology, and Real Estate.  

His clients are Indian Railways, Ministry of Road, Transport and Highways; National Highways Authority of India (NHAI), and Gujarat Maritime Board, Power Finance Corporation, Chennai Port Trust, Punj Lloyd, IFCI and China Construction Bank respectively.

Ravi has served as a board member of CRISIL Ltd., Asset Care Enterprise, McGraw-Hill, American Bureau of Shipping, and National Instruments. He is a charter member of TiE- Delhi chapter which is an association of start-ups worldwide and was founded in Silicon Valley. He has also been a board member of TerraLex Inc. (a worldwide network of law firms), PHD Chambers of Commerce in India, and Indian Council of Arbitration.

Practice Areas

N

Anti-trust and competition

N

Employment

N

Government and Regulatory

N

Mergers & Acquisitions

N

Real Estate

Clients

N

Standards & Poor’s

N

CNH Global (Erstwhile New Holland Fiat)

N

Inmarsat Solution PTE Limited

N

Denel (SOC) Ltd.

N

Mentor Graphics

N

Raytheon

N

SIG Sauer

Memberships

N

Supreme Court Bar Association

N

International Bar Association

N

American Bar Association

N

Solicitor, Supreme Court of England and Wales

N

Governing Body Member – Indian Council of Arbitration

N

Governing Board Member – TerraLex Inc. USA

N

Special Invitee, International Centre for Alternative Dispute Resolution

N

Chartered Institute of Arbitrators, UK

N

Managing Committee of PHD Chambers of Commerce in India

ALTERNATIVE DISPUTE RESOLUTION IN INDIA: A BRIEF OVERVIEW

ALTERNATIVE DISPUTE RESOLUTION IN INDIA: A BRIEF OVERVIEW

 

Dispute resolution is the process of deciding a dispute or a conflict that has arisen between transacting parties. The decision can be arrived at either in an amicable manner or adversarial manner, either by the parties themselves or a neutral third party. The differences between the parties are addressed by dealing with their transaction-related interests.

Broadly, there are three methods of dispute resolution:

  1. Traditional Dispute Resolution
  2. Alternate Dispute Resolution
  • Hybrid Methods of Dispute Resolution

While the traditional dispute resolution method or litigation refers to the proceedings before an appropriate court of law according to the procedure established, the alternative methods are more flexible and party-centric and include negotiation, mediation, conciliation and arbitration. Hybrid-methods, as the name implies are a cross-over between two alternative methods of dispute resolution.

The need to evolve alternative mechanisms to reduce the burden of the Courts and provide speedy access to justice alongwith the revival and strengthening of traditional systems of dispute resolution prompted the introduction of ‘Section 89’ in the Code of Civil Procedure, 1908 and ultimately, the Arbitration and Conciliation Act, 1996. The former opened the passage of statutory reference to ADR, either by the Courts or the parties themselves.

Under the provisions of Section 89, CPC, reference for the resolution of disputes could be had to any one of the following:

  1. Arbitration or Conciliation- Proceedings under the provisions of the Arbitration and Conciliation Act, 1996.
  2. Lok Adalat- Reference to Lok Adalat under Section 20 (1) of the Legal Services Authorities Act 1987, all provisions of which shall then apply.
  • Judicial Settlement- Reference by Court to a suitable institution or person who/ which shall be deemed to be a Lok Adalat and all other provisions of the 1987 Act shall apply
  1. Mediation-Court/third person effects a compromise between the parties.

In order to provide a better understanding of ADR, the two most popular forms, Arbitration and mediation are being elaborated herein:

  1. Arbitration:

It is an adjudicatory process in the nature of adversarial proceedings wherein parties submit their disputes to a neutral third party (arbitrator) for a decision. The proceedings, similar to litigation are however, faster, cheaper, confidential and more flexible in procedure and application of rules of evidence. The parties have the independence to chalk out the same in the agreement to arbitration. The said agreement which must necessarily precede arbitration, should be a valid one as per the Indian Contract Act, 1872. The parties to an arbitration agreement must have the capacity to enter into a contract in terms of Sections 11 and 12 of the said Act.

Arbitral decisions are final and binding on the parties with very limited scope of objecting to them.

  1. Mediation:

It is a voluntary, disputant-centered, non-binding method of dispute resolution wherein a neutral and credible third party facilitates a settlement between the parties. It is a confidential and structured process where the mediator uses special communication, negotiation and social skills to assist the disputants in arriving at a mutually acceptable solution themselves. The parties thereto must be willing to iron out the creases in their relation by a little outside help as the focus in mediation is on the future. It is ideal where the emphasis of the parties is on building relationships, rather than ascertaining the party at fault for what has already transpired. The outcome of a successful mediation is a settlement agreement, and not a decision. The objective of mediation is not to evaluate guilt or innocence but to promote understanding, focus the parties on their interests, and encourage them to reach their own agreement.

For the ease of evaluation the following comparative table is provided:

TATAS DETERMINED TO FIGHT MISTRY’S REINSTATEMENT IN SC

(As appeared in The Economics Times)

 

MUMBAI: While legal experts said Cyrus Mistry’s statement of not being interested in the chairmanship had placed him on a high moral ground in the fight with Tata Sons, top executives close to the matter indicated that the Tata Group was determined to see it through legally in the highest court.

Tata Consultancy Services, meanwhile, is understood to have decided to postpone its scheduled January 9 board meeting.

The National Company Law Appellate Tribunal (NCLAT), which last month ordered reinstatement of Mistry as Tata Sons chairman and director of a few group companies including TCS, specifically stated that decisions taken in the board meetings before his reinstatement would be illegal.

Mistry can choose to resign as a director once he is reinstated as per the NCLAT order, if Tata Sons failed to get the order stayed by the Supreme Court, lawyers said. Until Mistry makes his statement in court or the court sets the entire thing aside, “we would have to pursue the SC route”, a top Tata official said on condition of anonymity.

Tata Sons and TCS declined to comment. A top executive said the group would work out a solution through courts.

“It is likely that TCS board would postpone the meeting to await the outcome of the SC hearing and try to seek interim relief on reinstatement of Cyrus Mistry on the board,” said Ravi Singhania, the managing partner of law firm Singhania & Partners. “The Tata Group is filing a special leave petition and whether the SC will allow the plea or not, and also whether it gives any interim relief or not … it will be a time-consuming process and surely (stretch) much beyond January 9.”

Legal experts close to the matter said TCS might have decided to postpone the board meeting because it wasn’t expecting to get any hearing before January 9, when it is scheduled to consider thirdquarter results.

Legally, it has 45 days from the end of the quarter to release results. It is looking for some relief from the apex court before the formal board meeting, so that it doesn’t fall in contempt, said legal experts. The IT services provider had on Saturday filed an appeal in the SC against the NCLAT order.

According to Capstone Legal managing partner Ashish K Singh, Mistry had taken a moral highroad by issuing a public statement on Sunday claiming that he was not after the chairman’s post, there was no change as far as the legal position was concerned.

“It was a well-planned and cleverly thought out strategy by the SP legal team,” said a senior executive, referring to Mistry’s statement.

“We never have any intention to go to the SC to fight the Tatas for the post. Cyrus Mistry also did not want to hurt the regular operations of group companies with the legal fight. He has ensured that there is no disruption and hence no question of any stay in Supreme Court,” a top legal official close to the SP Group said.

Ican Investments Advisors chairman Anil Singhvi said Mistry had shown his statesmanship by offering not to press for either chairmanship of Tata Sons or membership of other boards.