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Accurate identification of the root causes of project delays and the allocation
of responsibility among the parties involved, is crucial for effective project
management. By adopting best practices and conducting detailed analyses,
parties can ensure fair and equitable resolutions to disputes, ultimately fostering
transparency and credibility in the construction industry.
Shubham Singh, Senior Consultant, Ernst & Young

construction industry has seen a Accurate identification of the root causes promises, the order of performance,
marked increase in disputes, largely of project delays and the allocation of and the consequences of default in
due to delays in project completion. responsibility among the parties involved, contracts involving such promises.
Recent reports indicate that nearly 50% of is crucial for effective project management. These sections underscore the concept
construction projects in India face delays, This determination is key in deciding of the interdependence of obligations. In
leading to disputes over Extensions of whether to impose LDs for delayed project construction contracts, where promises
Time (EOT). completion or grant an EOT. Furthermore, made by both the Employer and the
In any construction project, the central it enables the Contractor to substantiate Contractor are closely linked, understanding
figures are the Employer, the Contractor, associated costs through a Prolongation this interdependence is critical. The Act
and possibly an Engineer appointed by claim, particularly when the delays are stipulates that when the fulfilment of one
the Employer. Contractual agreements deemed excusable and compensable. promise is a precondition for another, the
between these parties establish specific 1
The Indian Contract Act, 1872 , serves second party cannot perform its duty until
obligations tied to a defined timeframe. The as the foundation for contract law in the first obligation is fulfilled, which has
validity period of a contract, though agreed India, providing general principles that significant implications in cases of delays.
upon by the parties, must be clearly defined. shape contractual relationships. While Section 55 of the Indian Contract Act, 1872,
Failure to meet these obligations within the Act does not explicitly address time emphasizes the significance of time in
the stipulated time may result in damages extensions or compensation in the context contractual agreements, particularly when
as outlined in the contract conditions. To of construction contracts, certain sections 'time is of the essence.’ If the parties intend
account for unforeseen delays that are not are relevant in cases where parties seek for time to be of the essence, and one party
the Contractor's fault and could not have redress for non-performance of obligations. fails to fulfil obligations within the specified
been foreseen at the contract’s inception, timeframe, the contract becomes voidable
EOT clauses are often incorporated. These Legal Framework: at the option of the promisee. In construction
clauses provide a critical safeguard for the Understanding the Indian projects, where timely completion is crucial,
Contractor, offering relief from Liquidated Contract Act, 1872 Section 55 underscores the importance of
Damages (LD) and establishing a revised Sections 51 to 54 of the Indian Contract meeting deadlines. However, when time
project completion timeline. Act address the principles of reciprocal is not of the essence, Section 55 offers

NBM&CW OCTOBER 2024 163

a nuanced approach: while the contract The case of Ircon International Ltd. vs. a case with solid evidence, detailed
doesn't become voidable due to missed Delhi Metro Corporation6 illustrates this analysis, and clarity is crucial for achieving
deadlines, the promisee is entitled to point well, where compensation was a favourable outcome.
compensation for losses incurred due to granted for only one of three EOTs
the delay. because the party had explicitly reserved
Final Recommendations
its rights. A similar principle was upheld in Performing thorough delay analysis is
An important aspect of Section 55 pertains
Mascon Multiservices & Consultants Pvt. essential for both Contractors requesting
to cases where the promisee accepts
7
performance at a time other than originally Ltd. vs. Bharat Oman Refineries Ltd. , an EOT and Employers seeking damages

agreed upon. If the promisee intends to where the Bombay High Court ruled that for delayed project completion. A detailed
damages are payable only if notice to analysis helps substantiate which party is
claim compensation for losses due to
claim compensation is given at the time of responsible for the delays and provides
delayed performance, they must notify
the promisor of this intention at the time accepting delayed performance. a solid foundation for claims or defences.
of acceptance. In the context of EOT To facilitate effective delay analysis, parties The absence of such analysis can lead to
proposals, including the intent to claim can refer to international best practices, inaccurate delay apportionments, resulting
cost compensation (prolongation) and such as those recommended by the in significant losses for the affected party.
price escalation due to delays is essential, Society of Construction Law (UK) Delay By adopting best practices and conducting
aligning with Section 55. detailed analyses, parties can ensure fair
and Disruption Protocol (February 2017)®
and AACE International’s Recommended and equitable resolutions to EOT disputes,
Case L a w and the Importance Practice No. 29R-03 for Forensic Schedule ultimately fostering transparency and
of Thorough Analysis Analysis . 5
These protocols outline credibility in the construction industry,
Several notable cases underscore the methodologies for delay analysis, including 1. India Contract Act, 1872
importance of conducting thorough Impacted As-Planned10 (IAP), As-Planned 2. IRCON International Ltd. vs. C.R Sons Builders
delay analyses. For example, in Ircon vs. As-Built (ARAB), Time Impact Analysis & Development Pvt. Ltd.. (2020) DHC: 965
International Ltd. vs. C. R. Sons Builders (TIA), and Window Slice Analysis. The 3. Vascon Engineers Ltd. vs. Union of India,
2
& Development Pvt. Ltd. , the Delhi High choice of methodology should be tailored (2021) DHC:2828
Court upheld an arbitrator’s decision to to the specific project and stage of analysis, 4. Union of India vs. C & C Construction Ltd.,
apportion delays on a 50:50 basis, a ensuring a comprehensive and accurate (2021) DHC: 3457
decision influenced by the absence of assessment of delays. 5. Shubham Singh & Chitesh Thakre, Guidance
a comprehensive delay analysis during on Extension of Time in Construction Contracts,
the submission and approval of the EOT The Role of Delay Analysis i n 07 IJSREM (2023), doi: 10.55041/IJSREM19431
proposal. Similar outcomes were seen in Construction Disputes
6. Ircon International Ltd. vs. Delhi Metro
Vascon Engineers Ltd. vs. Union of India When an EOT is granted, it is crucial Corporation, (2023) DHC: 7369
3
and Union of India vs. C & C Construction for the Employer to explicitly state their 7. Mascon Multiservices & Consultants Pvt. Ltd.
Ltd./ where delays were apportioned intent regarding the imposition of LDs vs. Bharat Oman Refineries Ltd., (2014) SCC
without robust analysis, leading to arbitrary and whether the extension is granted Online Bom 4832
allocations. with or without compensation for delays
3. See Society of Construction Law Delay
These cases highlight that an EOT does attributed to their actions. This transparent and Disruption Protocol, Feb. 2017 Society of
not automatically entitle the Contractor communication aligns with the spirit of Construction Law - United Kingdom.
to a prolongation claim, nor does delay Section 55, providing clarity and promoting 9. AACE International. International Recom-
project completion automatically entitle the fairness in addressing delays. mended Practice No. 29R-03 - Forensic Sched-
Employer to impose damages. Identifying It is common practice for some ule Analysis - TCM Framework: 6.4 - Forensic
the causes of delays and determining their professionals to communicate delays Performance Assessment, (2011).

attribution to each party, especially when generally and request EOTs without proper 10. Shubham Singh & Chitesh Thakre. Time in
these delays impact the overall project analysis. Due to the lack of comprehensive Focus: The Strategic Application of Impacted As-
timeline, is essential5. analysis, when disputes escalate Planned Method of Delay Analysis in Construction
Dispute Resolution', (2024), 90, Arbitration: The
to litigation, courts often struggle to
Best Practices for Delay comprehend the intricacies of the case. In
International Journal of Arbitration, Mediation
Analysis and Dispute Management, Issue 2, pp. 180-196,
Dispute Resolution Board (DRB)ZDispute
https://kluwerlawonline.com/journalarticle/Arbitr
When proposing or granting an EOT, it Adjudication Board (DAB) or arbitration
ation:+The+lnternational+Journal+of+Arbitratio
is crucial to explicitly reserve the right proceedings, technical experts are typically n,+Mediation+and+Dispute+Management/90.2/
to claim compensation, damages, or involved, offering a better understanding AMDM2024020. •
escalation. This intent must be clearly of complex cases. However, in litigation,
The author can be contacted at
expressed at the time of the EOT proposal. where judges and lawyers lead, presenting [email protected].

164 NBM&CW OCTOBER 2024