ARBITRATION

1. ARBITRATION Prevention & Cure By: Vinay Kumar Gupta Dy.CE/Genl/N.Rly

2. Precautions/ suggestions are required at different levels : • At divisional level (i.e. Respondent level) • At contractor’s ( the Claimant) level • At Arbitrator level • At HQ level • At Rly. Bd. level

3. At divisional level (i.e. Respondent level) • Remember, Contractor is also a part of the set up. His success is administration’s success. • Almost all the arbitration cases are avoidable & administration can do so • Contract documents should be practical • Supplementary agreement clause should invariably be included in tender documents. • Curtailment in Completion period to avoid PVC clause should be avoided • It should be ensured that contractor has a full time engineer at site. Accordingly a penalty clause should be included in the tender documents. Recovery amount for non-engagement of full time engineer by contractor should be sufficient enough

4. Better contract management means no arbitrations. Well planned work. - Pre tender meetings - Pre qualification of tenderers - Two bid system is better to be followed - Drawings & estimates etc. to be finalized before tender finalization - Availability of clear & obstruction free site to the contractor in time

5. Better contract management means minimum arbitrations (…….contd) - Bar Charts should be prepared in detailed consultation with contractor & followed religiously. - Sufficient time to be devoted for planning before starting the work - Unworkable, esp. too low rates, should not be accepted - Any additional work to be account vetted before start

6. As a result of appointment of arbitrator by GM • Arbitration hearings should be attended by a Sr.DEN/DEN • Logically present the case with supporting documents • No advocates for hearing in case of a departmental arbitral tribunals • Case details to HQ for appointment of arbitrators must reach within a weeks time.

7. When a court orders for appointment of arbitrator: • HQ should be informed immediately • Court orders collected at the earliest possible & attested copy submitted to HQ without delay • Followed by case details (14 points), including case history, copy of contract agreement, names of officers who dealt with the case, counter claims etc. • As soon as an arbitrator is appointed the division should be ready with all details and co-operate/ chase the arbitrator for speedy finalization of the case • Court hearings must be attended by Sr.DEN/DEN

8. Whenever an award is received from an arbitrator. Following documents should be sent to HQ for sanction of award: • An attested copy of award • Vetting by law branch of division • Vetting of associated finance • Clear objection/ no objection of concerned divisional officer • Challenging of award for excepted matters etc. doesn't need HQ approval

9. Interaction with contractor • Contractor should be treated as a part of administration. We can’t go ahead successfully without the contractor’s co-operation. He is equally important. • All instructions to contractor should be in writing. Verbal instructions should be followed with written instructions. • Pre tender meetings • Pre qualification of tenderers

10. Interaction with contractor • Workable rates • Purposeful action to settle dispute/ differences. Not an attitude of deferment. • To create confidence in contractor’s mind for better contract management and to avoid legal complications.

11. At Arbitrator’s level: • Arbitrator to be well conversant with Arbitration Act and GCC • He/she should take initiative • Should finalize the case in reasonable time • Should treat both the parties at par esp. while taking ex-parte decision • Ex-parte decision must be taken in case of no response from any party in spite of repeated requests/ instructions

12. - Entering into reference in time - Hearings done timely - Should not ask for advance and/or exorbitant honorarium -Not releasing the award in time after publishing - Award on excepted matters particularly interest on amount for the period prior to the date of publishing of the award is an excepted matter - Instead of writing “awarded amount shall carry an interest of X% if payment is not made within ninety days of publishing of award”, it should be “awarded amount shall carry an interest of X% if payment is not made within ninety days of receipt (or deemed to be receipt) of award by the parties”,

13. In case of more than one arbitrators, it becomes a team work and every member has to co-operate for early finalization of the case • Half of the total honorarium has to be claimed from claimant as well as from respondent. Claiming full amount from both sides and then depositing amount received from contractor with cash office is not a healthy practice. • While deciding ‘place for arbitration hearing’ correction slip no.4 of GCC must be kept in mind

14. At Head Quarter level • Request letters and other communication contractor take a long time in reaching to the dealer. • Lack of training to staff. Training courses for staff dealing with arbitration in HQ, Divisions & field offices be held from time to time • Multiple account’s vetting at divisional as well as HQ level is avoidable • For want of associate finance vetting, which sometimes take unnecessary long time, and the award is interest bearing • In certain cases conditional vetting is possible to avoid interest accumulation and legal complications

15. At Railway Board level • Amount of remuneration paid to railway arbitrator is just Rs. 300 per day • There are generally 5-15 sittings in a case means a max of Rs. 4500*** per case • Retired Rly officers get Rs. 50,000 per case • Arbitrators appointed by courts charge Rs. 5000 to 20000 per sitting with unlimited no. of sittings. • SOP clause of negative powers needs revision, where GM can sanction only upto Rs. 2000*** per annum to a working railway officer as arbitrator

16. Time limit for finalization of arbitration should be fixed. SOP needs modification. • It may be six months for ‘sole arbitrator’ cases and nine months for ‘arbitral tribunal’ where there are more than one arbitrator. • One or two SAG and one or two JAG/SG officers to be nominated as standing arbitrators. • To increase the financial limit from Rs. 10 lacs to Rs. One crore for appointment of sole arbitreator. • GCC is almost one sided & needs to be modified thoroughly in lines with FIDIC

17. THANKS