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USINGADRMETHODSIN

DISPUTERESOLUTIONIN
PUBLICPRIVATE
PARTNERSHIPININDIA

RESEARCH PAPER IN

ALTERNATIVE DISPUTE
RESOLUTION

SUBMITTED BY: Shubham


I.D. NO.: 2177
DATE OF SUBMISSION: 20th MAY 2017.
Table of Contents
TABLE OF AUTHORITIES
CASES
STATUTES
POLICY DOCUMENTS
REPORTS

INTRODUCTION
WHAT IS PUBLIC PRIVATE PARTNERSHIP?
LEGAL ENVIRONMENT AIDING PUBLIC PRIVATE PARTNERSHIPS
CAUSES FOR DISPUTES IN PUBLIC PRIVATE PARTNERSHIPS
DRAWBACKS OF LITIGATION IN DISPUTE RESOLUTION IN PPP AND BENEFITS OF ADR
METHODS

REGULATION OF PUBLIC PRIVATE PARTNERSHIPS IN INDIA


NATIONAL POLICY DOCUMENTS
DRAFT NATIONAL PUBLIC PRIVATE PARTNERSHIP POLICY, 2011
CONCESSIONAL AGREEMENTS
DRAFT PUBLIC PRIVATE PARTNERSHIP RULES, 2011
POLICY DOCUMENTS/LEGISLATIONS OD STATES
POLICY DOCUMENTS/LEGISLATIONS IN VARIOUS SECTORS
IN THE ROAD SECTOR
IN THE PORTS SECTOR
APPLICABILITY OF GENERAL LAW
OTHER RESORTS

CONCLUSION

BIBLIOGRAPHY
ARTICLES

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Table of authorities
Cases
1. BalcoEmployeesUnionv.UnionofIndia,(2002)2SCC333.
2. CentreforPublicInterestLitigationv.UoI(2000)8SCC606.
3. S.N.Joshi&SonsLtdv.NairCoalServicesLtd.,(2006)11SCC548.
4. UPSEBv.BanarasElectricLight&PowerCo.Ltd.,(2001)7SCC637.

Statutes
1. TheBiharInfrastructureDevelopmentEnablingAct,2006.
2. TheAndhraPradeshInfrastructureDevelopmentEnablingAct,2001.

Policy documents
1. Department of Economic Affairs, Government of India, Draft National Public
PrivatePartnershipPolicy(2011).
2. DepartmentofEconomicAffairs,GovernmentofIndia,DraftPPPRules,(2011).
3. Guidelines for Investment in the Road Sector, Ministry of Shipping Road
TransportandHighways,2011.
4. GuidelinesforPublicPrivatePartnershipinHaryana,2011.
5. KarnatakaInfrastructureDevelopmentandRegulationBill,2011.
6. ModelConcessionAgreementforSmallRoadProjects.
7. OrissaPublicPrivatePartnershipPolicy,2007.
8. PolicyonPublicPrivatePartnership,Assam(2008).
9. TheOrissaIndustrialPolicy,2011.
10. TwelfthFifthYearPlan(20122017),PlanningCommission,GovernmentofIndia
(2013).

Reports
1. Department of Economic Affairs, Government of India, The Report of the

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CommitteeonRevisitingandRevitalisingPublicPrivatePartnershipModelof
Infrastructure(2015).
2. Ernst&Young,NewinningsfortheIndianportssector(2011).
3. GovernmentofIndiaandAsianDevelopmentBank,FacilitatingPublicPrivate
PartnershipforAcceleratedInfrastructureDevelopmentinIndia(2006).
4. KPMG,InvestinginIndia(2010).
5. PricewaterhouseCoopers,Theroadahead:HighwaysPPPinIndia(2012).
6. The Economic Survey of India (200910), Government of India, 2010, 266
(2010).
7. ThePunjabInfrastructure(Development&Regulation)Act,2002.

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Introduction

What is Public Private Partnership?


They are a enduring, contractual partnerships connecting the public and private sector
organizations, purposely besieged towards financing, designing,implementing, and
operating infrastructure amenities and services that be conventionally provided by the
public sector. These joint undertaking are put together in the region of the expertise and
capability of the project associates and are pedestaled on a contractual agreement, which
make sure appropriate and mutually settled part of capital, hazard, and income. 1 The
Department of Economic Affairs, Government of India defines it as:
A partnership between a public sector entity and a private sector
entity for the creation and/ormanagement of infrastructure for
public purpose for a specified period of time (concession
period)on commercial terms and in which the private partner has
been procured through a transparent andopen procurement
system.2

Up to now, a variety of Public Private Partnership form have been endeavored in India,
counting public contracting; unreceptive public venture (equity, debt, guarantee, grants);
joint ventures; and enduring contractual agreements (BOT, BOOT, BOLT). In spite of the
model pursued, however, the overpowering agreement is that Public Private Partnerships
are the most important way by which the GoI will look for to triumph over the
infrastructure deficit. In accumulation to overpass the fiscal deficit, participation of
private sector convey beside the greatly much loved compensation of procedural skill,
cost efficiency and, effectiveness in function and organization. Nevertheless, to complete
their hope for the exercise of Public Private Partnerships in infrastructure projects, both
national and state governments resolve require as long as for a great deal superior
visibility Public Private Partnerships programme and as well look for to distribute most
excellent perform, in together, industrial and bureaucratic norms.

1GovernmentofIndiaandAsianDevelopmentBank,FacilitatingPublicPrivatePartnershipfor
AcceleratedInfrastructureDevelopmentinIndia(2006).
2Id.

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Legal environment aiding public private
partnerships
A key precondition for drawing private joint venture is acknowledged as laying behind a
policy, and a legal and regulatory framework that assures fair return for investors and
protects the interests of the users, especially poor and assures quality at a reasonable
cost.3 The GoI and a variety of state administrations have been constantly building hard
work to carry lucidity to strategy and system by inter alia adjust policy papers, as long as
for mold contract documents and instrument for financial arrangement. Additionally, the
union government has, in 2011 became visible with a sketch policy and rules concerning
PPP. Lone region frequently highlight by each and every one of the main policy
frameworks and model contract papers is the stipulation for an well-organized and
plausible dispute resolution apparatus.

Causes for disputes in public private


partnerships
The various stages in a PPP project implementation are as follows:4

1. Identification: It is the stage where potential projects are identified through a


strategic planning process and these potential projects are evaluated for their
suitability for development as PPP.
2. Full feasibility: A potential PPP identified in the first phase is considered in detail
and an application is made for in principle clearance to continue to the
procurement phase.
3. Procurement: The procurement process takes place, an application is made for
final approval, the preferred bidder is selected and the project is taken to technical
close.
4. Contract Management and Monitoring: Here, the Sponsoring Authority manages
the PPP throughout its life, including monitoring the private partners performance
against the requirements of the Concession Agreement. This phase begins at the
pre-operative stage, and spans the construction stage, the operations stage, and
3TheEconomicSurveyofIndia(200910),GovernmentofIndia,2010,266(2010).
4AsidentifiedbythePPPtoolkitoftheMinistryofFinance,GovernmentofIndia,availableat
http://toolkit.pppinindia.com/(LastvisitedonMay1,2016)

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contract closure and asset transfer.

The call for for dispute resolution happens frequently in contract management stage, but
likelihood of a dispute happening can not be lined elsewhere still preceding to that; say at
the stage of procurement wherever the reward of project might be disputed on grounds of
unpredictability and irregularity ahead of courts of law. In the contract management stage,
it is necessary that the agreement undoubtedly order the rights and tasks of in cooperation
the government sector and the PPP supplier. Any ambiguity or omission may lead
todisputes. The contract have got to speak to applicable problems for example risk
allocation, requisite service superiority, measures for the difference of services, and lastly,
the resolution of disputes.

Drawbacks of litigation in dispute


resolution in PPP and benefits of ADR
methods
InvestmentofprivatecapitalinPublicPrivatePartnerships,particularlyoverseasventure,
isdistantfromacceptable.Severalissueshavebeenidentifiedastowhythisisthecase,
whichinclude,lackofarobustlegislativeframeworktoaiddisputeresolutioninatime
boundmanner.5Continuationofaconvincingandcompetentdisputeresolutioninstrument
whichbecapableofreconcilethedisparityinaninstantleapwayissingleofthevital
featureforthetriumphofanyPPP.Inconfidentialfunds,inparticularinthoseconcerning
towering investment, the supposed danger and expenses of holdup in declaration of
disputes can be deadly to the nation. Stipulation for an successful dispute resolution
methodmutuallyinconditionsofpaceandvaluetakeforgrantedimportanceforPPPs
captivating interested in explanation the probable conflict of benefit, enduring and
toweringfunds concerned,politicalandsocietalunderstandingfrequentlyclosetothe
schemes etc. Thus it turn out to be very important that the party get the help of an
organization, with essential technological, monetary and lawful knowhow, to resolve
theirdisputesinapointboundbehavior.

5KPMG,InvestinginIndia(2010).

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ThejudiciaryinIndiahasbeenfrankinupholdingthatitisincommunityattentionto
speedupclearanceofcasesconnectingconfronttofinancialrules,asanyholdupwillbe
counterproductivetocommunityattention.Theresponsibilityofthecourt,maintainsthe
SC,ismerelytoimpounditselftothequeryofmisdemeanor,illogicalityandpractical
immodesty.6 Hence, the courts have normally reserved themselves from intrusive in
matters connecting to request and prize of project if not the unpredictability and
misdemeanorisclearontheexpressionofit.7

AtthestageofContractManagement,disputesfundamentallyrelatestothesoundness,
enforceability,interpretationornonperformanceofacontractualobligation,orlooking
forinjunctivebreak,reimbursement,specificperformance,etc.,mayapproachupand
thusagreeabletotheoriginaljurisdictionofacivilcourtofcapablejurisdiction.However,
litigationisnotfavoredasaformofdisputeresolutionmostprobablybecauseofreasons
similartoprobableholdupandtherequirementforspecialisedinformation.Theneedfor
specialistadjudicationinproblemsarisingnotinofroadandrailnetworkprojectshave
beenhighlightedbytheSCinUPSEBv.BanarasElectricLight&PowerCo.Ltd.8

6SeeBalcoEmployeesUnionv.UnionofIndia,(2002)2SCC333andCentreforPublicInterestLitigation
v.UoI(2000)8SCC606.
7S.N.Joshi&SonsLtdv.NairCoalServicesLtd.,(2006)11SCC548.
8(2001)7SCC637.

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Regulation of Public Private
Partnerships in India
National Policy Documents

Draft National Public Private Partnership Policy, 2011

The Draft National Public Private Partnership Policy considers make sure intelligibility in
administration procedure the highest main concern of the administration. The rationale
behind this is that Public Private Partnership assignment procedures require to be see-
through to keep hold of the faith of the parties. The Draft National Public Private
Partnership Policy resolves to further instill transparency in the government processes by
setting up a devoted argument decision device to speak to subject connected to the request
and prize of Public Private Partnership projects.9

The Draft National Public Private Partnership Policy goes on to mention how in different
stages of the public private partnership, dispute resolution clauses could be incorporated
to further the objective of transparency:
1. Development Stage: The Development Stage in covers project preparation
(including technicalfeasibility and financial viability analysis), project structuring,
preparation of contractual documents and obtaining of project clearances and
approval. During this stage, it would have to be ensure that the contractual
arrangements and documentation accurately reflect dispute resolution mechanism
and effective post award governance mechanisms among other things such as the
scope of the project, roles and obligations of parties, performance standards,
monitoring arrangements, termination arrangements, etc.10
2. Procurement stage: Procurement stage would cover procurement and project
award. The Government has prescribed the bid process and the model bidding
documents (viz., model Request for Qualification and model Request for
Proposal) for PPP projects in infrastructure sector, through notifications issued

9DepartmentofEconomicAffairs,GovernmentofIndia,DraftNationalPublicPrivatePartnershipPolicy,
9(2011).
10Supranote9,at13.

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from time to time. Draft contract agreement, 11 containing provisions on the dispute
resolution mechanism among other particulars such as the roles and obligations of
the parties, performance standards and monitoring arrangements, termination
arrangements, etc. shall be provided to the prospective bidders as part of the bid
documents.
3. PPP contract management and monitoring stage: This covers project
implementation and monitoring over the life of the PPP project. The project
implementing agency shall establish appropriate mechanisms for project
monitoring such as Project Monitoring Unit (PMU), along with inter-department
committees that would oversee project implementation, facilitate coordination
between departments and render assistance during events of dispute resolution or
arbitration. The dispute resolution mechanism would be in accordance with
contract conditions and applicable legislation. The implementing agency shall
endeavor to speedily resolve and dispose disputes during the contract period
through appropriate mechanisms including mediation processes.12

Concessional agreements

Draft contract agreements are important in the procurement stage so that the parties can
enter into a contract modeled in the same way as the draft, and be bound by it. The
Government of India has notified a slew of Model Concession Agreements and these are
second-hand by the executing organization. Model Concession Agreement(s) are papers
accepted by the Minister-in-Charge of the apprehensive Ministry/Department, subsequent
to achieve agreement of each and every one of such Ministries/Departments, as are
necessary to be ask in conditions of regulation 4 of the GoI (Transaction of Business)
regulations. Such agreement should be get hold of at the stage of the Minister-in-charge of
the ask over.13

Draft Public Private Partnership Rules, 2011

The Draft Public Private Partnership Rules, firstly, mandate that draft Concession
Agreements shall rule the contractual relationships among the Concessionaire and

11ModelConcessionAgreements,ifhavebeennotifiedbytheGovernmentofIndia,areusedasdraft
contractagreements.
12Supranote9,at18.
13Supranote9,at19.

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Contracting ability. Further, they also state that the requirements of the draft Concession
Agreement shall inevitably cover dispute resolution.14

Secondly, the Draft Public Private Partnership Rules introduce a body called the Contract
Management Team, which the Contracting Authority shall make up. The Contract
Management Team is to be headed by a contract management manager and help by a
squad by means of monetary, technological and officially permitted capabilities. The
CMT shall exist comprise taking place or previous to the appointment of matter of the
Letter of Award to the chosen bidder. The CMT shall prepare a Contract Management
Plan, which has to include the following particulars, the last three of which help in
reconciling differences between the parties in the PPP:15
a. define the processes that enable both parties to meet their obligations;
b. monitor performance by the Parties of their respective obligations under the
c. Concession Agreement;
d. manage differences through proactive relationship management;
e. manage unanticipated developments and mitigating risks through efficient risk
management; and
f. resolve disputes in an expeditious manner, with minimal impact on service
delivery.

CMT is not just responsible for the formulation of the Contract Management Plan, it is in
charge of monitoring of the implementation of the same, including monitoring the
development of continuing argument and adjudication procedures, if some. 16 The Rules
state that it is significant to every so often appraisal the affiliation amid constricting
parties, the foundation at the back such an work out being, to recognize any problem that
happen throughout the route of scheme implementation and the decree of the similar since
commence ladder to conquer some problem before time determination assist keep away
from some rise of such problems into bigger clash.17 The CMT also had to behavior
episodic discussion plus collection communications amid the agreement organization side
of the constricting parties to help in organization their connection and statement.

The Rules mandate that the CMT should engage in the following to allow for dispute
14Rule79,DraftPPPRules,DepartmentofEconomicAffairs,GovernmentofIndia(2011).
15Rule102,DraftPPPRules,DepartmentofEconomicAffairs,GovernmentofIndia(2011).
16Rule98,DraftPPPRules,DepartmentofEconomicAffairs,GovernmentofIndia(2011).
17Appendix12,DraftPPPRules,DepartmentofEconomicAffairs,GovernmentofIndia(2011).

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resolution:
(a) Effective measure should be put in place through the contract
to settle disputes between the contracting parties.
(b) Mutual discussions, wherein the parties to the agreement can
come together to discuss a mutually agreeable settlement, is one
of the most effective tools for dispute resolution in terms of
management time, cost, range of possible solution and
relationship management. Thus it shall be the preferred method to
resolve disputes through mutual discussions at the level of the
Contract Director and the chief executive officer of the private
party.
(c) Thereafter, Contracting Authority shall follow the procedures
specified in the
Concession Agreement to resolve disputes between parties.

Thirdly, the Rules even provide for an Independent Engineer, whose role and functions
shall include assisting the Parties in resolution of disputes, in a fair, impartial and efficient
manner.18

Policy Documents/legislationsod states


VariousstatessuchasOrissa,19Haryana,20Gujarat21andAssam,22forexampleinsistonthe
useofADRmethodsfordisputeresolution.Theextenttowhicheachstateadvocatesfor
ADRandinfrastructuraldevelopmenttoaidthesame,variesacrossstatetostateandtheir
policydocumentsorlegislationsreflectthesame.Inthissection,thedisputeresolution
provision in various states of India have been discussed. The Draft Karnataka
InfrastructureDevelopmentandRegulationBill,2011holds,Disputesthatmayarise
duringtheexecutionoftheProjectshallbesettledthrougharbitrationandtheConcession
Agreementshallcontainanarbitrationclausetothiseffect.23

TheGovernmentofKarnatakainitsDraftIndustrialPolicyof2013recognizesthatfor
any ADR mechanism to be effective and efficient, it has to be carried out by a
18Appendix11,DraftPPPRules,DepartmentofEconomicAffairs,GovernmentofIndia(2011).
19OrissaPublicPrivatePartnershipPolicy,2007,availableat
http://www.pppinindia.com/pdf/reviseddraft_ppprules.pdf(LastvisitedonMay2,2016).
20PPPPolicyofHaryana,availableathttp://pppinharyana.gov.in/ppp/PPP%20Policy%20Haryana.pdf
(LastvisitedonApril30,2016).
21Availableathttp://www.pppinindia.com/statepolicygujarat.php(LastvisitedonMay3,2016).
22PolicyonPublicPrivatePartnership,2008,availableat
http://www.pppinindia.com/pdf/assam_govt_ppp_policy.pdf(LastvisitedonApril29,2016).
23Provision20(3),DraftKarnatakaInfrastructureDevelopmentandRegulationBill,2011.

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knowledgeable, qualified, impartial and neutral third party. Hence, the National Law
SchoolofIndiaUniversityisoneoftheneutralthirdpartiesthatthispolicyrecognisesto
aidthisinitiative.

The Punjab Infrastructure (Development & Regulation) Act, 2002 has established an
authoritycalledthePunjabInfrastructureRegulatoryAuthoritysolelyforthepurposesof
thislegislation.24Amongotherfunctions,thisAuthorityhastheauthorityofacivilcourt
to give a ruling upon disputes interse two or more Concessionaires, operative of
transportationscheme,theStateGovernmentandtheBoard.25TheBiharInfrastructure
DevelopmentEnablingAct,2006providesforaConciliationBoardtobeputupwhich
shallhelptheGovernmentAgency,orLocalAuthorityandsomeDeveloperinanself
governing and neutral way to arrive at a friendly resolution of their disputes happen
beneaththeActortheConcessionAgreement.26EacharrangementprevioustotheBoard
shallbebelievedtobeajudicialhappeninganditshallbebelievetobeaCivilCourt.
Jurisdictionofsubordinatecourtsaredisqualifiedbyonconditionthatthatdisagreement
resolutionordisagreementdecreeinhighopinionofonematterundertheActshallbepay
attentiontojustintheHCandbyrefusalofsupplementarycourtorcourtssecondaryto
theHC.TheOrissaIndustrialPolicymandatesthattheStateGovernmentshallcomprisea
ShilpaAdalatconstitutingoftheSecretaryofIndustriesandotherofficials,whichshall
gettogetherallthemonthandlistentothemoans/criticismofshareholderandmakeits
advicetothesuitablepowerforthoughtandevenoutofthecomplaint. 27Thisisbymeans
ofasighttogiventhataopportuneandeffectualdisagreement/complaintdecreedevice
formanufacturing.

The Andhra Pradesh Infrastructure Development Enabling Act, 2001 has set up a
ConciliationBoard,whichhastheauthorityofacivilcourt.28Theresolutionrewardshall

24Section4,ThePunjabInfrastructure(Development&Regulation)Act,2002.
25Section14(1)(v),ThePunjabInfrastructure(Development&Regulation)Act,2002.
26Availableathttp://industries.bih.nic.in/Acts/AD0119122006.pdf(LastvisitedonMay5,2016).
27Provision26,TheOrissaIndustrialPolicy.
28Section37,TheAndhraPradeshInfrastructureDevelopmentEnablingAct,
2001statesasfollows:ThefunctionsoftheBoardshallbeasfollows:
(a)ToassisttheGovernmentAgency,orLocalAuthorityandanyDeveloperin
anindependentandimpartialmannertoreachanamicablesettlementoftheir
disputesarisingundertheActortheConcessionAgreement;

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contain the identical result as that of an arbitral prize under the Arbitration and
Conciliation Act and there is a slab on the parties to way out to arbitral or legal
proceduresthroughoutthereconciliationprocess.29Section41oftheActgoesontostate:

Any dispute, claim or difference arising out of or in connection


with or in relation to any Concession Agreement or contract
between the Government Agency or Local Authority on the one
hand and the Developer on the other hand, shall as far as
possible, be amicably settled between the parties. In the event of
any dispute, claim or difference not being amicably resolved, such
dispute, claim or difference shall be referred to the Conciliation
Board.

Post the above proceedings, whilst it comes into view to the floorboard that present
subsist a likelihood of a resolution, the conditions and circumstances of which might be
satisfactory to the party, the Board shall devise the stipulations and setting of the probable
resolution and present the identical to the gathering for their comments. After in receipt of
the comments of the parties, if any, the Board might formulate the stipulations and
situation of the probable resolution.30 The completion concord shall include the identical
standing and outcome seeing that condition it is an arbitral reward on arranged
stipulations on the material of the disagreement provide by an arbitral trial under Section
30 of The Arbitration and Conciliation Act, 1996.31

The Haryana state government has constituted the Committee of Secretaries on


Infrastructure (CoSI), comprising of a cluster of Secretaries beneath the Chairmanship of

(b)TheBoardshallbeguidedbyprinciplesofobjectivity,fairness,obligations
oftheparties,theusagesofthetradeandthecircumstancesgoverningthe
disputesincludingthegoodbusinesspracticeprevalent inthenationaland
internationalfieldcoveredbythedisputebetweentheparties;
(c)TheBoardmayconducttheconciliationproceedingsinsuchamannerasit
mayconsiderappropriate,takingintoaccountthecircumstancesofthecase,
thewishesof thepartiesthatmaybeexpressedandforreachingaspeedy
settlementofthedispute;
(d) The Board may, at any stage of the conciliation proceeding, make
proposalsforsettlementofdispute.Suchproposalneednotbeinwritingand
neednotbeaccompaniedbyanystatementofreasonstherefor.

29Section49(1)states,Thepartiesshallnotinitiateduringtheconciliationproceedingsanyarbitralor
judicialproceedingsinrespectofanydispute,claimordifferencei.e.thesubjectmatteroftheconciliation
proceedings.SeealsoSection50oftheAct.
30Section46,TheAndhraPradeshInfrastructureDevelopmentEnablingAct,2001.
31Section47,TheAndhraPradeshInfrastructureDevelopmentEnablingAct,2001.

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the Chief Secretary, Government of Haryana to smooth the progress of infrastructure
development in the State in PPP.32 One of the functions of the CoSI is to approve and
supervise dispute resolution apparatus and to decide concerns connecting to development
support procedure.

Policy documents/legislations in various


sectors

In the road sector


A. Government of Indias Guidelines for Investment in the Road
Sector
TheGovernmentofIndiasGuidelinesforInvestmentintheRoadSector 33haslaiddown
anelaborateprocessfordisputeresolutionbetweenthepartiesinaPPPinvolvingroads.It
hasbeendescribedasfollows:

1. MediationbytheIndependentEngineer:Ifanydisputearisesbetweentheparties,
itisinthefirstplaceresolvedbythemediationoftheIndependentEngineer.Any
dispute, which is notresolved by mediation of the Independent Engineer, is
resolvedbyamicableresolution.
2. AmicableResolution:Anydispute,differenceorcontroversyofwhatevernature
betweentheparties,arisingunder,outoforinrelationtotheprojectconcession
agreement (PCA) is attemptedto be resolved amicably in accordance with
theprocedure set forth in the dispute resolution mechanism. Either party may
requiresuchdisputetobereferredtotheChairman,NHAIandtheChiefExecutive
Officeroftheconcessionaireintheinterim,foramicablesettlement.
3. Arbitration:Anydispute,whichisnotresolvedamicably,shallbefinallysettledby
bindingarbitrationunderTheArbitrationAct.Thearbitrationshallbecarriedout
byapanelofthreearbitrators,onetobeappointedbyeachpartyandthethirdtobe
appointedbythetwoarbitratorsappointedbytheparties.
4. DisputeReviewBoard:TheBoardshallcompriseofthreemembers,experienced

32Seeprovision8.2.2,GuidelinesforPublicPrivatePartnershipinHaryana,available
athttp://pppinharyana.gov.in/ppp/PPP%20Policy%20Haryana.pdf(LastvisitedonMay5,2016).
33GuidelinesforInvestmentintheRoadSector,MinistryofShippingRoadTransportandHighways,
availableathttp://www.nhai.org/doc/28Oct09/NHAIFinal.pdf(LastvisitedonMay07,2016).

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withthetypeofconstructioninvolvedinroadworks,andwiththeinterpretationof
contractualdocuments.
5. Dispute involving foreign contractors: In thecase of a dispute with a foreign
contractor,thedisputeshallbesettledinaccordancewiththeprovisionsofthe
UNCITRAL Arbitration Rules. Thearbitral tribunal shall consist of three
arbitrators,oneeachtobeappointedbytheemployerandthecontractorandthe
thirdarbitratorchosenbythetwoarbitratorssoappointedbytheparties,whoshall
furtheractasthePresidingArbitrator.

B. Model Concession Agreement for Small Road Projects


TheModelConcessionAgreementforSmallRoadProjectsallowsforamicableresolution
inwhicheitherpartytothecontractmayreferthedisputetotheDG(RoadDevelopment)
GoIandtheChairmanoftheBoardofDirectorsoftheConcessionaire,fortheoccasion
beingforfriendlyresolution.34SeveralDisputes,whicharenotdeterminedcordially,shall
belastlyestablishedbyobligatoryarbitrationintheArbitrationandConciliationAct,
1996.Therewillbethreearbitrators,eachindividualwillbechosenbyeveryPartyand
thethirdonewillbeselectedbythetwoarbitratorschosenbytheParties.Theprocessto
bepursuedinsidethearbitration,aswellasselectionofarbitrator/arbitralhearing,theset
oflawsofproofwhicharetobevalidshallbeinagreementwiththeArbitrationand
ConciliationAct,1996.Anyverdictordecisionresultantfromarbitrationwillbelastand
compulsoryontheParties.ThePartiesheretosurrender,tothedegreepermittedbyrules,
any privileges to plea or to appraise of such reward by every court or tribunal. The
agreementbetweenthepartiesisthatthearbitralgrantmightnotbeinfavourofthe
Partiestothearbitrationtakingplaceortheirresourceswheretheymightbeestablished
andthatarulingaheadofthearbitralgiftmightbeenteredinanytrialhavingauthority
thereof.

C. Recommendations of the Chaturvedi Committee Report


A committee under the chairmanship of Mr. B.K. Chaturvedi was formed to give
suggestions on development of the dispute decree process with regard to PPP in roads.The
committee developed its suggestions to categorize the cases stood on the quantity engaged
in these disagreements. Accordingly,

34Article19,ModelConcessionAgreementforSmallRoadProjects,availableat
http://www.nhai.org/concessionagreement.htm(LastvisitedonMay7,2016).

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a. Category A disputes Where amount involved is less than Rs.10 crore or 5% of
contract value (whichever is lower) to be referredto a committee consisting of a
retired High Court judge, former CAG, vigilance commissioner and technical
expert.
b. Category B disputes Where amount involved is between Rs. 10 crore and Rs.
100 crore. In such cases, the recommendations of the arbitration tribunal may be
accepted.35

The commission has suggested appraisal of the decisions by the dispute resolution board
by an independent technical expert to enhance the reliability in the procedure of dispute
decree.

In the ports sector


The Ministry of Shipping has proposed the implementation of the Ports Regulatory
AuthorityBill,2011.TheBillgivesfortheinstitutionofanappellatetribunal,whichis
tobecalledasthePortRegulatoryAuthorityAppellateTribunal,toarbitratedisputes
whencontractsforPPPfordevelopmentofportsareawarded.Itsdecisioncanbarelybe
disputedintheSC.36

Applicability of general law


RulesprevailingoverusualbusinesstransactionsliketheIndianContractAct,1872,Sale
ofGoodsAct,1930,NegotiableInstrumentsAct,1881,etc.,willalsohaveacomportment
onPublicPrivatePartnershipplanning.Incount,avarietyoflawsprevailingoverdispute
resolution like the Code of Civil Procedure, 1908, Specific Relief Act, 1963 and
ArbitrationandConciliationAct,1996areadditionallyrelevant.Inaccumulationthereis
also the technique of arbitration wherein the party can get its differences corrected
through an intermediary chosen by the HC envisaged in that HCs mediation laws.
However, since the achievement of reconciliation and mediation being legally non
binding,determinedontheelasticityandacceptanceoftheresolutionbythetwosides.

35SeePricewaterhouseCoopers,Theroadahead:HighwaysPPPinIndia(2012).
36Ernst&Young,NewinningsfortheIndianportssector(2011).

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Other resorts
The FIDIC structure of agreement is present for self-governing engineer who shall be an
authority of balancing the interests of the two parties by shaping, verifying and endorsing
the way in which the bond is overseen. 37It is also pertinent to remind that the subsequent
Report of the Chaturvedi Committee on the quicker execution of NHDP also highlights
the acceptance of FIDIC form in every type of agreement, where the engineer embraces
an important position in the adjudication of disagreements at the initial stage.38

37FederationInternationaleDesIngenieursConseilsisanorganisationofconsultingengineers.TheFIDIC
isawellknownintheconstructionengineeringindustryforitsworkindefiningconditionsofContractfor
theConstructionIndustryworldwide.SeeD.Spasveski,TheRoleoftheEngineerintheFIDICconditions
ofcontract,6(1),IUSTINIANUSPRIMUSLAWREVIEW,1,2(2010).
38Supranote35.

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Conclusion
Arbitrationawardsarealmostinvariablyappealedagainst,resultinginlongdrawnout
disputesthatoftenlast3to10years.Asperavailabledata,overRs.21,000croreworth
disputes involving 870 cases are pending for resolution in the Road sector alone,
involvingPPPs.39Thereisanescalatingpropensitytoappealonreasonofmisconduct
fromthearbitratorsbecauseoflackofqualitycontrolofarbitratorscredentialsand
proficiency,nohelpisobtainableinsupervisionofarbitratorsfeesandthereisdeficiency
in regulation of arbitrators improvement. 40 Absence of a stipulation for an impartial
organizationtomanageandoverseetheadjudication. Whilethegovernmentadvocates
ADRmethods,inmanycasesitfailstoelaboratehowthisprocedureistobeused.The
nonexistenceofacomprehensibleandswiftdisputeresolutionapparatusismounting
expenditureofdevelopmentalplansanddiscouragingfinanciersattitude.

TheReportoftheCommitteeonRevisitingandRevitalisingPublicPrivatePartnership
ModelofInfrastructure41 suggeststhefollowingrecommendationstomakethedispute
resolutionprocessmoreeffective:

a. Sectorspecificmonitoringandregulatorycommittees setupas aplatformto


periodicallyrevisitcontractualandcommercialrelationshipsbetweenparties.
b. Themonitoringandregulatorycommitteeandthedisputeresolutionmechanism
mustbeindependentofinvolvementinthepublicsector.
c. For effective and speedy dispute resolution independent sector regulators are
essential.42

TheresearcherssuggestionsarethattheGovernmentmustmullovercreationofalone

39Twelfth Fifth Year Plan (20122017), Planning Commission, Government of India, Vol. 2, 367
(2013).The number of disputes in the PPP projects has shown a significant increase from 56 cases
(involvingRs.803crore)in2013to116cases(involvingRs.11,580crore)in2015.

40Id
41DepartmentofEconomicAffairs,GovernmentofIndia,TheReportoftheCommitteeonRevisitingand
RevitalisingPublicPrivatePartnershipModelofInfrastructure(2015).
42 Id.

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quasijudicialauthorityforeachandeveryoneofinfrastructuredivisions.Thisauthority
willhavestatutoryauthoritytodecidedisagreementsinvolving theestablishmentsand
privateauthorities.Thispowerwillcreatethedisputeresolutioncoursefurtherefficient
andmayspeedupprojectimplementationanddecreaseexpenses.Anothersolutionmay
be to use the Institutional Arbitration system according to which appointment of
arbitratorsisdonefrominternational,nationalorregionaldivision.Otheraspectsofthis
structurearehavingasystemofprinciplesthatattachthearbitratorsandaprearranged
plane of cost. This system can develop the value of arbitrators and uphold secure
regulationandscrutinyofarbitratorsimprovement.

Hence, this project stressed on the importance of Public Private Partnerships to the
development of the infrastructure sector in India, while dealing with legal issues
pertainingtoPPPs,specificallythatofdisputeresolution. This projectanalysedthea
varietyofperformancesofdisputeresolutionauthorizedincentralandstatelegislations,
policycredentialsandindustrypractices.ADRmethodscurtailthecostsandtimedelay
thatlitigationensuesandithasexpertsintheinfrastructuralsectorsaidinginreaching
decisions and it possesses procedural flexibility, which are features litigation cannot
provide.Nonetheless,thesystemofdisputeresolutioninPPPsinIndiaviaADRsuffers
defectsaslistedaboveandrecommendationstoaidthesamehavealsobeenmentionedin
thisproject.

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Bibliography

Articles
1. D.Spasveski,TheRoleoftheEngineerintheFIDICconditionsofcontract,6(1),
IUSTINIANUSPRIMUSLAWREVIEW(2010).

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