Priyanshu Kumar D.’s Post

𝐀𝐫𝐛𝐢𝐭𝐫𝐚𝐭𝐢𝐨𝐧 𝐜𝐥𝐚𝐮𝐬𝐞 𝐜𝐚𝐧𝐧𝐨𝐭 𝐛𝐞 𝐢𝐧𝐜𝐨𝐫𝐩𝐨𝐫𝐚𝐭𝐞𝐝 𝐛𝐲 𝐫𝐞𝐟𝐞𝐫𝐞𝐧𝐜𝐞 𝐢𝐧 𝐚 𝐛𝐚𝐜𝐤 𝐭𝐨 𝐛𝐚𝐜𝐤 𝐜𝐨𝐧𝐭𝐫𝐚𝐜𝐭 Mac Associates v. Parvinder Singh (Del HC, 2J, 27.02.2024) Facts: 1) M and P had an agreement on a back-to-back basis on the basis of the contract between P and D. 2) The contract between M and P did not have an arbitration clause but the contract between P and D had an arbitration clause. 3) Disputes arose between M and P and P filed a suit in which M filed an application u/s 8 of the A&C Act on the basis of the back-to-back clause r/w arbitration clause between P and D. 4) The said Application was dismissed and M filed an Appeal u/s 37 of the A&C Act. Issue: The question before the court was whether the arbitration clause between P and D can be said to be an arbitration agreement between M and P by application of Sec. 7(5) of the A&C Act (incorporation by reference)? Held: The court rejected the Appeal and held: (1) In a single contract, a general reference to GCC or any other conditions containing the arbitration clause is sufficient to constitute an arbitration agreement whereas in a two-contract case, there should be a specific reference to the arbitration clause. (2) The back-to-back contract (in the present case) is a two-contract case and the back-to-back clause cannot incorporate the arbitration clause unless and until there is a specific reference to the arbitration clause. My views: Back-to-back contracts are relatively new kinds of contracts that have recently attracted a lot of attention and jurisprudence in the Indian infrastructure sector. It is imperative to understand the difference between a back-to-back contract and annexing GCC to a single contract. Apart from the present case, the Indian courts have generally restrained from giving an expansive interpretation to back-to-back clauses. Thus, industry professionals and contract managers should be cautious of the impact of such contracts on their potential and actual disputes. #arbitration #constructionlaw #constructiondisputes #constructionindustry #infrastructure #claimsmanagement

𝗡𝗲𝘄 𝗚𝘂𝗶𝗱𝗲𝗹𝗶𝗻𝗲𝘀 𝗳𝗼𝗿 𝗔𝗿𝗯𝗶𝘁𝗿𝗮𝘁𝗶𝗼𝗻 𝗮𝗻𝗱 𝗠𝗲𝗱𝗶𝗮𝘁𝗶𝗼𝗻 𝗶𝗻 𝗗𝗼𝗺𝗲𝘀𝘁𝗶𝗰 𝗣𝘂𝗯𝗹𝗶𝗰 𝗣𝗿𝗼𝗰𝘂𝗿𝗲𝗺𝗲𝗻𝘁 𝗖𝗼𝗻𝘁𝗿𝗮𝗰𝘁𝘀! White and Brief - Advocates & Solicitors is delighted to share an insightful document issued by the Ministry of Finance, Department of Expenditure, outlining the latest Guidelines for 𝗔𝗿𝗯𝗶𝘁𝗿𝗮𝘁𝗶𝗼𝗻 𝗮𝗻𝗱 𝗠𝗲𝗱𝗶𝗮𝘁𝗶𝗼𝗻 𝗶𝗻 𝗖𝗼𝗻𝘁𝗿𝗮𝗰𝘁𝘀 𝗼𝗳 𝗗𝗼𝗺𝗲𝘀𝘁𝗶𝗰 𝗣𝘂𝗯𝗹𝗶𝗰 𝗣𝗿𝗼𝗰𝘂𝗿𝗲𝗺𝗲𝗻𝘁. 𝗛𝗲𝗿𝗲 𝗮𝗿𝗲 𝘀𝗼𝗺𝗲 𝗸𝗲𝘆 𝗵𝗶𝗴𝗵𝗹𝗶𝗴𝗵𝘁𝘀: 𝗜𝗻𝘁𝗿𝗼𝗱𝘂𝗰𝘁𝗶𝗼𝗻 𝘁𝗼 𝘁𝗵𝗲 𝗚𝘂𝗶𝗱𝗲𝗹𝗶𝗻𝗲𝘀: A comprehensive overview aimed at improving dispute resolution mechanisms in public procurement. 𝗔𝗱𝘃𝗮𝗻𝘁𝗮𝗴𝗲𝘀 𝗼𝗳 𝗔𝗿𝗯𝗶𝘁𝗿𝗮𝘁𝗶𝗼𝗻: Speed, efficiency, and inclusion of technical expertise are among the benefits, ensuring swift and informed decisions. 𝗚𝗼𝘃𝗲𝗿𝗻𝗺𝗲𝗻𝘁 𝗗𝗶𝘀𝗽𝘂𝘁𝗲𝘀 𝗣𝗲𝗰𝘂𝗹𝗶𝗮𝗿𝗶𝘁𝗶𝗲𝘀: Unique challenges due to multiple levels of scrutiny and the need for accountability to Parliament. 𝗖𝗵𝗮𝗹𝗹𝗲𝗻𝗴𝗲𝘀 𝘄𝗶𝘁𝗵 𝗔𝗿𝗯𝗶𝘁𝗿𝗮𝘁𝗶𝗼𝗻 𝗶𝗻 𝗚𝗼𝘃𝗲𝗿𝗻𝗺𝗲𝗻𝘁 𝗖𝗼𝗻𝘁𝗿𝗮𝗰𝘁𝘀: Addressing issues like long durations, high costs, and the potential for Supreme Court interference. 𝗠𝗲𝗱𝗶𝗮𝘁𝗶𝗼𝗻 𝗮𝘀 𝗮𝗻 𝗔𝗹𝘁𝗲𝗿𝗻𝗮𝘁𝗲 𝗗𝗶𝘀𝗽𝘂𝘁𝗲 𝗥𝗲𝘀𝗼𝗹𝘂𝘁𝗶𝗼𝗻: Emphasizing the benefits and successful models within government entities under the Mediation Act, 2023. 𝗞𝗲𝘆 𝗚𝘂𝗶𝗱𝗲𝗹𝗶𝗻𝗲𝘀 𝗳𝗼𝗿 𝗣𝗿𝗼𝗰𝘂𝗿𝗲𝗺𝗲𝗻𝘁 𝗖𝗼𝗻𝘁𝗿𝗮𝗰𝘁𝘀: Strategies such as restricting arbitration in large contracts, preferring institutional arbitration, and encouraging amicable settlements. 𝗘𝗻𝗰𝗼𝘂𝗿𝗮𝗴𝗶𝗻𝗴 𝗠𝗲𝗱𝗶𝗮𝘁𝗶𝗼𝗻 𝗮𝗻𝗱 𝗔𝗺𝗶𝗰𝗮𝗯𝗹𝗲 𝗦𝗲𝘁𝘁𝗹𝗲𝗺𝗲𝗻𝘁𝘀: Adoption of mediation, formation of High-Level Committees for high-value matters, and processes for negotiation. 𝗔𝗽𝗽𝗿𝗼𝘃𝗮𝗹 𝗮𝗻𝗱 𝗠𝗼𝗱𝗶𝗳𝗶𝗰𝗮𝘁𝗶𝗼𝗻𝘀 𝗼𝗳 𝗚𝘂𝗶𝗱𝗲𝗹𝗶𝗻𝗲𝘀: Authority requirements, relevance of Section 49 of the Mediation Act, 2023, and application flexibility. 𝗖𝗼𝗻𝗰𝗹𝘂𝘀𝗶𝗼𝗻 𝗮𝗻𝗱 𝗜𝗺𝗽𝗹𝗲𝗺𝗲𝗻𝘁𝗮𝘁𝗶𝗼𝗻: Summarizing key points and encouraging efficient, fair, and accountable processes across government ministries and entities. Let's work together to promote pragmatic and fair decision-making in public procurement. NILESH TRIBHUVANN #PublicProcurement #Arbitration #Mediation #GovernmentContracts #DisputeResolution #whiteandbrieflegalinsights

Finance Ministry has stated that the 'Guidelines for Arbitration and Mediation in Contracts for Domestic Public Procurement' are unlikely to affect the arbitration infrastructure or increase pendency of cases. The guidelines, issued by the Ministry on June 3, recommend that arbitration clauses in public procurement contracts involving the government should not be routinely used, and may be restricted to disputes with a value less than ₹10 crore. Since disputes valued at less than ₹10 crore and those disputes not involving the government will continue to be resolved through arbitration. The guidelines were based on 'unsatisfactory experience of arbitration' where the government was a party. These guidelines are flexible and permit arbitration for high value disputes after application of mind by the Ministry or the undertaking concerned. News Courtesy:Bar and Bench #Arbitration #publicprocurement

June 3, 2024: Bharat (i.e. India) -Federal Ministry of Finance, inter alia observing : (i) "process of arbitration takes a long time (not as quick as envisaged)"; and is (ii) "very expensive"; has issued Guidelines (No.F.1/2/2024-PPD) for administering dispute resolution involving private sector vs Government/PSUs. Salient features of these MoF Guidelines include: (i) Arbitration should not be routinely included in procurement contracts/ tenders, especially in large contracts.  (ii) As a norm, arbitration (if included in contracts) may be restricted to disputes with a value of dispute (not the value of the contract) less than Rs. 10 crore. It may be specifically mentioned in the bid documents - that in all other cases, arbitration will NOT be a method of dispute resolution. (iii) Inclusion of arbitration clauses covering disputes with a value exceeding the norm - the Secretary or Joint Secretary (so authorized by the Secretary. (iv) in case of Arbitration, institutional arbitration to be given preference (v) General Instructions on Procurement and Project Management dated 29.10.2021 should be kept in mind i.e. challenge/ appeal should not be taken in a routine manner, but only when the case genuinely merits going for challenge/ appeal and there are high chances of winning (vi) Government departments should avoid and/ or amicably settle as many disputes as possible via Mediation and/ or negotiated amicable settlements (vii) Disputes not covered in an arbitration clause and where Mediation/amicable settlement endeavours are not successful, should be adjudicated by the courts. #Arbitration #litigation #Bharat #India Federal Ministry for Economic Cooperation and Development (BMZ) ICCA International Council for Commercial Arbitration

The Summary of the recent guidelines being notified by the Ministry of Finance. 1. Arbitration is an increasing means of alternative dispute resolution to reduce litigation and achieve quick and efficient settlement of contractual disputes. 2. The Government is subject to multiple levels of scrutiny before and after decisions are taken, and it is difficult to accept arbitration awards that differ from the practice followed for other similarly-placed contractors who are not involved in the arbitration. 3. The process of arbitration takes a long time and is not as quick as envisaged, besides being very expensive. It is also exposed to perceptions of wrongdoing including collusion, particularly in matters of high financial value. 4. The benefit of finality has also not been achieved, as a large majority of arbitration decisions are being challenged in the Courts, delaying final resolution, and the objective of relieving the burden on Courts has generally not been achieved. 5. The courts are a remedy that always exists wherever there is no arbitration clause, but there are also successful models of mediation/ conciliation being practiced in certain Government entities, for example in the oil and gas sector. 6. For contracts of domestic procurement by the Government, CPSEs, PSBs, etc., and Government companies, arbitration will be given preference if the value of the dispute is less than Rs. 10 crore. 7. In cases of arbitration or court decisions, the government public sector enterprise should challenge the decision only if there are high chances of winning in the court higher court. 8. Government departments/ entities/ agencies should avoid and/ or amicably settle as many disputes as possible using mechanisms available in the contract. 9. General or case-specific modifications may be authorized by the Secretary concerned or the Managing Director in respect of Central Public Sector Enterprises. #arbitration #government #contract #publicsector

Dispute Resolution Mechanism for MoRTH and NH Division Contracts in India For contracts under the Ministry of Road Transport and Highways (MoRTH) and the National Highways Division in India, the dispute resolution mechanism is a structured and well-defined process, ensuring fair and timely resolution of disputes. Here's an overview: 1. Conciliation: When disputes arise, the first formal step is conciliation. An independent conciliator, often an expert in the relevant field, is appointed to help the parties reach a mutually acceptable resolution. This step is crucial in promoting a collaborative approach and avoiding adversarial proceedings. 2. Arbitration: If conciliation fails, the parties move to arbitration, which is governed by the Arbitration and Conciliation Act, 1996 (as amended). The arbitration process involves: - Appointment of Arbitrators: Typically, each party appoints one arbitrator, and the two arbitrators appoint a third arbitrator, who acts as the presiding arbitrator. - Arbitration Proceedings: These include the submission of written statements, hearings, and the presentation of evidence. - Arbitral Award: The arbitration panel issues a binding decision known as the arbitral award. 3. Litigation: As a last resort, if arbitration does not resolve the dispute or if the parties are dissatisfied with the arbitral award, they may approach the courts for litigation. However, litigation is generally avoided due to its time-consuming and costly nature. This structured approach ensures that disputes are resolved efficiently, maintaining the integrity and progress of vital infrastructure projects. #Infrastructure #MoRTH #DisputeResolution #Arbitration #Conciliation #ConstructionLaw #India #contracts #proclep #leadership

Arbitration has been a go to remedy for the parties in cases of contractual disputes as it provides quick and efficient results. This remedy of arbitration can be invoked only upon explicit contract provision. But the actual experience of arbitration in respect of contracts where the Government is a party has been, in many cases, unsatisfactory in meeting expectations. So, Ministry of Finance vide it's Office Memorandum 𝐍𝐨. 𝐅. 1/2/2024-𝐏𝐏𝐃 𝐝𝐚𝐭𝐞𝐝 03.06.2024 (𝐌𝐀𝐍𝐔/𝐄𝐗𝐏𝐄/0004/2024) has issued guidelines for Arbitration and Mediation in respect of contracts of domestic procurement by the Government and by its entities and agencies (including Central Public Sector Enterprises [CPSEs], Public Sector Banks [PSBs] etc., and Government companies). The guidelines stated: - Method of arbitration should not be routinely or automatically included in large contracts. - Arbitration may be restricted to disputes with a value less than Rs 10 Crore. - ln matters where arbitration is to be resorted to, institutional arbitration may be given preference. - Government parties should avoid or amicably settle as many disputes as possible using mechanisms available in the contract. - Government parties are encouraged to adopt mediation under the Mediation Act, 2023. - Mediation agreements need not be routinely or automatically included in procurement contracts/ tenders. - Courts should adjudicate the matters where arbitration is not successful. To know more please find official document below #arbitration #remedy #parties #efficient #contractual #disputes #manupatra #legaltech #stayupdated

Para 5 of the OM gives reasons as to why Mediation should be preferred over Arbitration and in view of enactment of the Mediation Act, 2023. Actual unsatisfactory experiences of arbitration are given - i.      The arbitration process takes long time besides expensive. ii.      Clause (ii) refers to various experiences including reduced formality, binding nature of decisions, improper application of law, proceedings conducted in closed doors and not in open court. iii.     The benefit of finality has also not been achieved. Majority of arbitration decisions are being challenged in the Courts. iv.     The expectation that challenge to the arbitration award would be rare, is not realised in practice.  It has become a source of more litigation. v.      The realistic claims and counter claims are often replaced by inflated claims, counter claims or cross claims. vi.     The intended finality though often not realised in practice has bearing on possible civil and criminal actions. It is, therefore, resolved in para 7 that Arbitration should not be routinely or automatically included in procurement contracts especially large contracts. It is further resolved to adopt and encourage Mediation under the Mediation Act, 2023.

Para 5 of the OM gives reasons as to why Mediation should be preferred over Arbitration and in view of enactment of the Mediation Act, 2023. Actual unsatisfactory experiences of arbitration are given - i.      The arbitration process takes long time besides expensive. ii.      Clause (ii) refers to various experiences including reduced formality, binding nature of decisions, improper application of law, proceedings conducted in closed doors and not in open court. iii.     The benefit of finality has also not been achieved. Majority of arbitration decisions are being challenged in the Courts. iv.     The expectation that challenge to the arbitration award would be rare, is not realised in practice.  It has become a source of more litigation. v.      The realistic claims and counter claims are often replaced by inflated claims, counter claims or cross claims. vi.     The intended finality though often not realised in practice has bearing on possible civil and criminal actions. It is, therefore, resolved in para 7 that Arbitration should not be routinely or automatically included in procurement contracts especially large contracts. It is further resolved to adopt and encourage Mediation under the Mediation Act, 2023.

𝗚𝘂𝗶𝗱𝗲𝗹𝗶𝗻𝗲𝘀 𝗳𝗼𝗿 𝗔𝗿𝗯𝗶𝘁𝗿𝗮𝘁𝗶𝗼𝗻 𝗮𝗻𝗱 𝗠𝗲𝗱𝗶𝗮𝘁𝗶𝗼𝗻 𝗶𝗻 𝗖𝗼𝗻𝘁𝗿𝗮𝗰𝘁𝘀 𝗼𝗳 𝗗𝗼𝗺𝗲𝘀𝘁𝗶𝗰 𝗣𝘂𝗯𝗹𝗶𝗰 𝗣𝗿𝗼𝗰𝘂𝗿𝗲𝗺𝗲𝗻𝘁 The Ministry of Finance, Government of India, has released updated guidelines for arbitration and mediation in domestic public procurement contracts. These guidelines aim to streamline dispute resolution processes, ensuring efficiency and fairness in public procurement. It reflects a balanced approach, aiming to optimize dispute resolution in public procurement while addressing past challenges. By promoting mediation and restricting arbitration, the guidelines strive for a fair, efficient, and less adversarial process, ultimately benefiting public procurement practices. 𝗞͟𝗲͟𝘆͟ ͟𝗛͟𝗶͟𝗴͟𝗵͟𝗹͟𝗶͟𝗴͟𝗵͟𝘁͟𝘀͟:͟ 1. 𝗣𝗿𝗲𝗳𝗲𝗿𝗲𝗻𝗰𝗲 𝗳𝗼𝗿 𝗠𝗲𝗱𝗶𝗮𝘁𝗶𝗼𝗻: The new guidelines encourage the use of mediation, under the Mediation Act, 2023, for resolving disputes amicably before resorting to arbitration or litigation. 2. 𝗟𝗶𝗺𝗶𝘁 𝗼𝗻 𝗔𝗿𝗯𝗶𝘁𝗿𝗮𝘁𝗶𝗼𝗻: Arbitration is recommended only for disputes valued below ₹10 crore, reducing the frequency and scope of arbitration in large contracts. 3. 𝗜𝗻𝘀𝘁𝗶𝘁𝘂𝘁𝗶𝗼𝗻𝗮𝗹 𝗔𝗿𝗯𝗶𝘁𝗿𝗮𝘁𝗶𝗼𝗻: Where arbitration is used, institutional arbitration is preferred to enhance credibility and effectiveness. 4. 𝗛𝗶𝗴𝗵-𝗟𝗲𝘃𝗲𝗹 𝗖𝗼𝗺𝗺𝗶𝘁𝘁𝗲𝗲𝘀: For high-value disputes, the formation of High-Level Committees, including retired judges and technical experts, is suggested to oversee dispute resolution. 5. 𝗘𝗻𝗰𝗼𝘂𝗿𝗮𝗴𝗲𝗺𝗲𝗻𝘁 𝗳𝗼𝗿 𝗔𝗺𝗶𝗰𝗮𝗯𝗹𝗲 𝗦𝗲𝘁𝘁𝗹𝗲𝗺𝗲𝗻𝘁𝘀: Emphasis on pragmatic and amicable resolution of disputes, avoiding litigation where possible. 𝗦͟𝗲͟𝗰͟𝘁͟𝗼͟𝗿͟𝘀͟ ͟𝗮͟𝗻͟𝗱͟ ͟𝗗͟𝗲͟𝗽͟𝗮͟𝗿͟𝘁͟𝗺͟𝗲͟𝗻͟𝘁͟𝘀͟ ͟𝗔͟𝗳͟𝗳͟𝗲͟𝗰͟𝘁͟𝗲͟𝗱͟:͟ These guidelines are applicable to various sectors and departments, including: - 𝗖𝗲𝗻𝘁𝗿𝗮𝗹 𝗣𝘂𝗯𝗹𝗶𝗰 𝗦𝗲𝗰𝘁𝗼𝗿 𝗘𝗻𝘁𝗲𝗿𝗽𝗿𝗶𝘀𝗲𝘀 (𝗖𝗣𝗦𝗘𝘀) - 𝗣𝘂𝗯𝗹𝗶𝗰 𝗦𝗲𝗰𝘁𝗼𝗿 𝗕𝗮𝗻𝗸𝘀 (𝗣𝗦𝗕𝘀) - 𝗚𝗼𝘃𝗲𝗿𝗻𝗺𝗲𝗻𝘁 𝗠𝗶𝗻𝗶𝘀𝘁𝗿𝗶𝗲𝘀 𝗮𝗻𝗱 𝗗𝗲𝗽𝗮𝗿𝘁𝗺𝗲𝗻𝘁𝘀 - 𝗣𝘂𝗯𝗹𝗶𝗰 𝗦𝗲𝗰𝘁𝗼𝗿 𝗙𝗶𝗻𝗮𝗻𝗰𝗶𝗮𝗹 𝗜𝗻𝘀𝘁𝗶𝘁𝘂𝘁𝗶𝗼𝗻𝘀 - 𝗦𝘁𝗮𝘁𝗲 𝗚𝗼𝘃𝗲𝗿𝗻𝗺𝗲𝗻𝘁𝘀 - 𝗔𝘂𝘁𝗼𝗻𝗼𝗺𝗼𝘂𝘀 𝗕𝗼𝗱𝗶𝗲𝘀 𝘂𝗻𝗱𝗲𝗿 𝘁𝗵𝗲 𝗚𝗼𝘃𝗲𝗿𝗻𝗺𝗲𝗻𝘁 #PublicProcurement #Arbitration #Mediation #DisputeResolution #GovernmentOfIndia #PolicyUpdate #ProcurementGuidelines #Efficiency #Transparency Kushagra Chaturvedi | Sumit Kumar | Mohana Potdukhe | Suryajeet Tiwari