Professional Documents
Culture Documents
•The Contractor usually refers the dispute under cl. 67.1 of the
Contract.
•First the Contractor writes to the Engineer for payment of disputed
rate/issue as the Contractor interprets it.
• The Engineer makes his determination /decision.
•If Engineer decision does not satisfy the Contractor ,he raises his
claim with the Employer.
•If he does not get a satisfactory reply with in 14 days of making
reference , he writes to the Chairman DRB for resolution of the said
dispute.
•The board is permitted only 56 days from the date Chairman
receives the notice of dispute.
•The Chairman writes to Project Director to give his defence reply
with in 7-10 days of receiving the reply.
•The Contractor is asked to submit the counter reply , if any within
• The Board fixes special DRB meeting usually at site of work or where
PD’s / Engineer HQ is located.
• The meeting is attended by Contractor’s authorised representatives
and Engineer (TL) and Project Director.
• The aggrieved party makes its submission . The meeting usually
lasts 2-3 days.
• The other party replies.
• Both parties are requested to submit gist of written arguments by
another one week or so if they desire so.
• The Board members meet privately at convenient place and have
their internal meeting to deliberate the issue.
• The crux of submission by each party , comments of Engineer if any ,
are documented.
• The Board makes its reasoned recommendations . The
recommendations are usually unanimous but these could be
2:1/majoirty as well.
• If these can’t be done in time, further time extension is given by the
parties to the dispute.
• The recommendations are legal if the non aggrieved party does not
raise any objection to DRB’s recommendation with 14/28/56 days of
making the same, and the recommendations become legally
enforceable.
Otherwise, the party which feels aggrieved by the recommendations and
goes in for Arbitration.
Advantages :
• Normally i.e. in 99% cases the dispute is referred during execution
period of the project.
• The concerned staff officials of the Engineer, The Contractor and the
Employer are available for consultation.
• The assessment of ground realities is quite sound and
• There is no danger of misrepresentation/hiding of facts by any party.
• It is time bound and fast track dispute resolution method.
• Disadvantage: the board recommendations are recommendatory in
nature have no teeth . These are not taken that seriously.
• Usually one of the parties goes in for arbitration.
• The success rate in India is quite poor.
• Reasons for non acceptance of Board’s
recommendations
Lack of pragmatism.
The dissatisfied party wants to exhaust the
Arbitration channel also.
• Experience
All World Bank/ADB funded , projects whether of
GOI or State governments incorporate the provision
of DRB in their contract document under Cl. 67.1 of
G.C.C ( 1996 amendment ) of FIDIC IV.
Observations
• The period of 56 needs to be enhanced to 90
days and to 120 days in complex cases .
• There should be provision for time extension in
the contract document.
• Now time is being extended by both parties with
mutual consent w/o any provision in the contract.
• If Board fails to make recommendations with in
prescribed time/extended time due to either of the
parties refusing for initial time extension or 2 nd
time extension , the whole exercise goes waste.
• In that case it is loss of human resources.
CASE STUDIES
Case 1
The Employer specified that a drainage layer will be provided
over the sub grade to drain away the sub-surface water.
The gradation of the DL was such that:
• The DL was uncompactable.
•Contactor raised the matter with the Engineer.
•Engineer verified and observed that the D.L. could not be actually
compacted.
•The Employer changed the specification of DL.
•Employer specified table 400.1 of M/o RTH specification with change in last
two sieves.
•The changed grading was compactable.
•The Employer also mentioned permeability as criteria.
Variation Order
INCREASE IN ROYALTY ON
AGGERATES.
• In U.P. government revised rates of Royalty
on crushed aggregates.
• This was done by Gazette notification .
• Contractor claimed enhanced rates under
Cl. 70.8 – subsequent legislation .
• Engineer did not pay.
• Employer sought clarification from Ministry
Of Commerce .
• Ministry of Commerce clarified aggregates
are not considered for determining WPI .
• Matter came before DRB .
• DRB held the view although aggregates are
not mentioned in the WPI but minerals are
included .
• Dolomite and ‘other minerals ‘are included
in WPI.
• Stone aggregates are very minor percentage
of WPI .
• There is not Construction Materials Index
(CMI) in the country.
• The DRB by majority view held that nothing
extra is payable to be Contractor as
enhanced Royalty is covered under price
escalation .
• Contractor went to Arbitration.
CASE 10
GROUND IMPROVEMENT
• Weak ground was got improved by dumping
of stone boulders and filling of smaller size
aggregates as per MoRTH specification.
• Contractor claimed rates as per his analysis .
• Employer said contractor will be paid as per
‘day rates ‘in BOQ for small quantity of 50
cum .
• Contractor had dumped more than about
17000 cum.
• Matter came before DRB.
• DRB analysed the rates and made
unanimous recommendation for reasonable
rate with interest and escalation .
• Employer agreed & accepted the DRB
recommendation.
• Contractor got his due payment.