Latest Construction Laws in India

 

India's construction industry is an example of uneven legislation and confusing interpretation, which causes disagreements and extended litigation in the construction laws. The 1872 Contract Act, comprehensive statutory provisions in labour laws, a few particular statutes, such the Building and Other Construction Workers Act, 1996, and other state-specific rules and regulations all control construction laws in India.

Lack of a standard construction contract structure leads to the necessity for amalgamated construction law/commercial construction law. This in turn causes issues of its own, leading to unfair contract terms, late payments, and protracted dispute resolution.

The rationale behind Construction Contracts

Every contract in India must comply with the Indian Contract Act, 1872, which stipulates that there must be two or more parties to the agreement who are legally able to do so, that the parties entered into the agreement voluntarily, for a legitimate consideration, and with a lawful goal.

Construction contracts must adhere to the aforementioned conditions, just like any other contract, in order to be legally enforceable. The Indian Contract Act primarily governs contracts between contractors and employers. Construction contract forms are chosen from organisations having a global reputation.

Disputes in construction contracts and the disparity in interpretation by arbitrators and courts: a global perspective

Contract performance delays are the main topic of construction disputes. It is crucial to point out that how these disagreements are resolved by construction law - arbitrators or courts of law exposes how linked laws are actually put to use and illustrates the inescapable discrepancy in interpretation.

In December 2019, New Delhi hosted a three-day international conference on construction law and arbitration. The Chartered Institute of Arbitrators-India and the Society of Construction Law-India jointly hosted it. During the conference, a panel of eminent judges and lecturers from around the globe reviewed problems with construction contracts and the causes of construction delays.

To comprehend how the construction dispute resolution process functions, it is crucial to take note of the trends and methods used by legal interpreters. The following is a discussion of a few of the topics the panel lists touched on.

 

Concurrent delays

Concurrent delay in construction projects does not have a single, agreed definition. A more specific definition of "true concurrency" is when both the employer and the contractor experience delays at the same time and for the same amount of time, sharing the same start and end dates.

If either of these delays occurs in the absence of the other, it is likely that the project will take longer to complete. In many jurisdictions around the world, arbitrators and courts generally adhere to two main methods for construction laws.

The Malmaison approach

The UK's Technology and Construction Court (TCC), in the case of Henry Boot Construction Ltd v. Malmaison Hotel, clearly explains this strategy. In essence, if there are two concurrent causes of delay, one of which is a significant event outside of the contractor's control and the other is not, then the contractor is entitled to an extension of time induced by the relevant event in such a situation.

Apportionment approach

In City Inn v. Shepherd Construction Ltd.5, the Scottish courts established the apportionment technique, rejecting the Malmaison approach. In summary, the delay must be divided between the contractor and the employer when there are two competing reasons of delay, neither of which is dominant.

The High Court of Hong Kong likewise adopted this strategy in Hing Construction Co Ltd v. Boost Investments Ltd, which the Scottish courts approved and followed in the City Inn Case. Articles 287, 290, and 291 of the United Arab Emirates Civil Code likewise contain comparable ideas along similar lines.

Exclusionary clauses

Exclusionary clauses are those in construction contracts that limit the employer's responsibility for delays brought on by the employer. It is well-known that government contracts in India favour the government employer and frequently contain clauses that give the government the upper hand when negotiating with contractors.

It has made it possible for exclusionary clauses to be incorporated into contracts, meaning that even if there are delays that may be attributable to the employer, the contractor cannot sue for damages.

It is important to remember that Section 54 of India's Contract Act states that when a party breaches a contract and receives a benefit, that party cannot keep the benefit and must pay the non-defaulting party compensation.

Consolidated construction law can boost development and broaden the industry's reach. No matter how many sections there are in India's construction laws, they must be united in a way that may effectively convey the purpose of the legislation.

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