Construction disputes make up a significant component of the claims and disputes dealt with in Arbitrations in India.
The Government is investing into new facilities for improving the infrastructure of the country. At the same time, commercial and real estate projects are on the rise in India. There is a construction boom taking place. All such construction projects require highly specialized designs, detailed plans and specifications, high-risk construction methods, effective project planning and management, skilled supervision, and effective coordination. Construction projects are complex, uncertain, have extended construction periods, involving many parties, requiring Civil, Mechanical and Electrical engineering experts to work in close co-ordination.
These various parties involved in construction contracts deal with complicated challenges and technicalities making it riskier for contractors and clients. Larger and more complex projects involve more parties and more ways the project could go wrong. Also, contractors have to construct progressively sophisticated and risky projects with a reduced number of resources and profits.
Construction contract disputes can start right after a contract is formed and may continue till the end. Therefore, the smooth sailing of a project to begin with depends on a number of factors like exclusive new contract formation, bidding, and compliance to contractual documents during execution. The best chance to prevent claims comes to an end once tender-documents are finalized and the contract is awarded.
The next phase is the execution of the project without change in the scope of work, ensuring timelines are followed, vendors and contractors and other agencies are appointed on time and there is no deviation from the contractual conditions. Out of the four phases- Pre-tender, Contract Formulation, Construction, Post completion of a construction project, most claims occur during the construction phase.
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