Central Tribunal to resolve public contracts dispute in time-bound manner proposed

NEW DELHI: In a first, India may soon have a dedicated tribunal to resolve disputes in a time-bound manner in large public contracts.


The Planning Commission has proposed a Central tribunal, which will work through benches across all the states to resolve disputes in public contracts in a time-bound manner.

“As per the initial draft bill, the tribunal will be mandated to resolve all disputes in not more than six months and the decision of the tribunal could only be challenged in the Supreme Court,” an official of the commission told ET.

The tribunal will be headed by a retired Supreme Court judge and will have financial as well as technical expert across sectors to help it arrive at decisions quickly.

This mechanism would come as a major relief to private infrastructure players who are increasingly bidding for infrastructure development projects in the country as well as the government burdened with delays and cost overrun arising out of disputes between the parties involved in public-private partnership ( PPP) projects.

At present, all disputes in public contracts are resolved through the Arbitration Act 1996. But this process of arbitration in India is itself marred by huge costs -- financial, legal and opportunity cost of locked investments – because of the long time it takes. “Rising number of disputes has been one of the major issues across all infrastructure projects, which has in turn resulted in huge amount of money being locked in litigation. While a tribunal will bring stability to these large public contracts, getting states on board will be a challenge," Abhaya Agarwal, head (infrastructure), E&Y said.

Over 300 projects or contracts worth Rs 5 lakh crore have been signed between government and private players and the Centre is aiming tap them to get 50% of the $1-trillion investment for infrastructure sector envisaged in 12th Plan.

The Prime Minister’s office, had last month, asked Planning Commission to prepare a draft bill on dispute resolution in large public contracts. Following this, Plan panel prepared the initial draft, which has already undergone inter-ministerial consultations as well as consultation with other stakeholders and the planning commission is now expected to come up with a revised draft in a fortnight.