New Delhi, Former Chief Justice of India UU Lalit said that infrastructure contracts should undergo scrutiny by a specialized government agency before they are signed, as early examination could prevent costly arbitration disputes and save thousands of crores of public money.
Speaking at a conference on 'Dispute Resolution and Arbitration Norms for Construction and Infrastructure Sector: An Indian and International Perspective', Justice Lalit emphasized the importance of screening construction and infrastructure project contracts by an agency in the ministry before signing.
He drew on his experience of being associated with nearly 20 construction and infrastructure arbitrations over the past three years, saying that many disputes arise due to gaps in contract drafting, project planning, and coordination among government agencies.
Justice Lalit noted that arbitration claims in infrastructure projects often exceed the original project cost, creating a perception that the mechanism is sometimes used by contractors to seek higher compensation.
He also cited the example of environmental restrictions such as GR-III and GR-IV measures imposed during severe air pollution, which frequently halt construction work, and contractors later claim compensation for idle manpower and machinery.
Justice Lalit said that infrastructure projects must balance three objectives: quality construction, timely completion, and benefits to society, while ensuring that costs do not spiral out of control.
He also flagged a lack of coordination between government departments, particularly in projects involving railway overbridges, where design changes by the railways after contracts are awarded often lead to disputes.
Former Supreme Court judge Hema Kohli was also present at the event and said that India is witnessing large-scale investments in highways, railways, urban transport, energy, and logistics that are reshaping the country's development landscape.
She underlined the importance of strong dispute resolution frameworks in supporting major infrastructure projects and sustaining investor confidence.
