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The Ministry of Power (MoP) has established three Conciliation Committees of Independent Experts (CCIEs) to resolve contractual disputes involving power projects implemented by central public sector undertakings (CPSUs) and developers under MoP administrative authority.
One of the key factors affecting the timely completion of power sector projects has been recognized as the delay in addressing contractual disputes.
The conventional dispute resolution process, such as Dispute Resolution Boards or Arbitration Tribunals, sometimes takes a long period, resulting in lesser cash flow than optimal for contractors and project time and expense overruns.
The conciliation procedure was established in response to CPSUs and developers’ concerns that the current dispute resolution mechanisms are insufficient to handle the developers’ and contractors’ issues swiftly and efficiently.
A committee of CPSU board-level executives was formed to investigate the field-level issue and the challenges in addressing the concerns. After debating on the report given by the board-level officer’s committee, the Ministry, in collaboration with the Central Electricity Authority and the CPSUs, noticed that various contract-related conflicts had emerged.
The development of CCIE attempts to address these challenges and eliminate any delays in project commissioning.
When the developer receives a reference from contractor dispute conciliation, the developer shall revert within 7 working days requesting the contractor to send a team of representatives to speak with the developer.
If a conciliation request is made by the contractor, it should be forwarded to the CCIE within 30 days if the situation is not resolved internally. After considering the nature and magnitude of the conflicts, the developer can choose a reasonable sum below which it will not engage in conciliation.
After the proceedings are successfully concluded, the parties must undertake and complete all required activities to implement the conditions of settlement within 30 days, unless an alternative timeframe of no more than 60 days is agreed upon in the settlement agreement.
All pending claims of parties in any other legal venue must be withdrawn in connection with the dispute within these 30 days. After a settlement is achieved, any additional legal procedures will be permitted only with the agreement of the MoP.
If the CCIE’s conciliation procedure fails, the parties can use their resources to go to court. However, once the conciliation process has been used, the alternative of arbitration is no longer open.
The panel of independent specialists in these committees will serve for a period of three years from the date of inception. The number of panels may be expanded from time to time, depending on the reaction of the competing parties and the workload.