Para 10.7 — CONSULT_MANUAL

10.7 Disputes and Conflicts 1. Normally, there should not be any scope for dispute between the purchaser and contractor after entering a mutually agreed valid contract. However, due to various unforeseen

Manual for Procurement of Consultancy Services, Second Edition, 2025 reasons, problems may arise during the progress of the contract leading to a disagreement between the purchaser and contractor. Therefore, the conditions governing the contract should contain suitable provisions for settlement of such disputes or differences binding on both parties.

2. In its directives82 regarding contractual disputes, Department of Expenditure, Ministry of Finance has stressed that:

“Government departments/ entities/ agencies should avoid and/ or amicably settle as many disputes as possible using mechanisms available in the contract. Decisions should be taken in a pragmatic manner in overall long-term public interest, keeping legal and practical realities in view, without shirking or avoiding responsibility or denying genuine claims of the other party.”

3. All disputes and differences between the parties, as to the construction or operation of the contract, or the respective rights and liabilities of the parties on any matter in question; dispute or difference or any other account whatsoever, but excluding the Excepted Matters (detailed below); arising out of or in connection with the contract, whether before or after the completion/ termination of the contract, that cannot be resolved amicably between the Procurement Officer and the contractor within thirty (30) days from aggrieved Party notifying the other Party of such matters, shall be hereinafter called the “Dispute”.

4. The aggrieved party shall give a ‘Notice of Dispute’ indicating the Dispute and claims citing relevant contractual clause to the designated authority and requesting for invoking the following dispute resolution mechanisms. The Dispute shall be attempted to be resolved without recourse to courts through dispute resolution mechanisms detailed subsequently, in the sequence as mentioned below, and the next mechanism shall not be invoked unless the earlier mechanism has been invoked or has failed to resolve it within the deadline mentioned therein. While processing a case for dispute resolution/litigation/arbitration, the procuring entity is to take legal advice, at appropriate stages.

a) Adjudication b) 83Mediation c) Arbitration