Practice Area

Construction & Infrastructure Law

Overview

Construction and infrastructure projects generate a distinctive category of legal disputes — claims for delay, cost overruns, variations, and defects that are technically complex, contractually specific, and often involve multiple parties simultaneously. The legal framework governing these disputes is shaped by the contract itself: the conditions of contract, the dispute resolution clause, and the notice provisions that determine whether a claim can be pursued at all. Corpus Lawyers advises owners, contractors, sub-contractors, and lenders on construction contracts, project disputes, and infrastructure regulatory matters.

EPC and Construction Contract Drafting

Drafting and negotiation of engineering, procurement, and construction contracts (EPC), build-operate-transfer agreements, construction management contracts, and sub-contracts — covering delay and disruption provisions, variation mechanisms, performance security, and dispute resolution clauses.

Construction Dispute Claims

Preparation and prosecution of delay claims, extension of time claims, loss and expense claims, and variation claims in construction disputes — including analysis of critical path methodology, programme analysis, and quantum of disruption damages.

Contractor and Sub-Contractor Disputes

Representation of contractors and sub-contractors in disputes with employers, including enforcement of payment claims, defence of performance bond encashments, and recovery of retention money withheld beyond contractual entitlement.

Infrastructure Project Advisory

Advisory on regulatory approvals, land acquisition compliance, environmental clearances, and sectoral regulatory requirements for infrastructure projects in roads, power, ports, and urban development.

Arbitration of Construction Disputes

Representation in arbitration of construction and infrastructure disputes — including claims under standard form contracts (FIDIC, NEC, GCC), management of expert evidence, and strategy for complex multi-party arbitrations.

Landmark Authorities and Doctrinal Framework

Construction and infrastructure disputes operate at the intersection of contract law, the Arbitration and Conciliation Act, 1996, the Contract Act, 1872, and a dense layer of project-specific regulatory frameworks — NHAI rules, Model Concession Agreements, the Electricity Act for power projects, and sectoral concession frameworks. A small number of Supreme Court rulings and statutory reforms anchor how disputes are framed and resolved.

Energy Watchdog v. Central Electricity Regulatory Commission (2017) 14 SCC 80 remains the modern restatement of force majeure and change-in-law under commercial construction and infrastructure contracts. A clause-level force-majeure provision must be read against the bare text of the contract; a change in fuel cost, absent a specific contractual allocation, does not amount to force majeure; and change-in-law provisions apply to Indian law, not to foreign legal or regulatory shifts. EPC contracts, concession agreements, and power purchase agreements drafted after 2017 are read and enforced against this framework.

The Arbitration and Conciliation (Amendment) Act, 2015 recalibrated the Section 34 challenge to domestic awards. “Patent illegality” was introduced as a ground for setting aside, but confined in scope — it does not extend to erroneous application of law or to reappreciation of evidence. For infrastructure arbitration, where the sums at stake make challenges near-automatic, the 2015 amendment narrowed the successful-challenge base. The Arbitration and Conciliation (Amendment) Act, 2019 tightened arbitrator qualifications and disclosure requirements, and introduced a statutory ninety-day time limit for the Section 34 court to dispose of a challenge.

The Specific Relief (Amendment) Act, 2018 introduced Section 14A, empowering the court to appoint experts where a contract dispute requires technical or professional assessment. For construction disputes — where quantum, delay attribution, and causation are routinely contested on technical grounds — Section 14A offers a court-appointed expert pathway that supplements but does not replace party-appointed technical experts. The provision has been used sparingly since notification, but the infrastructure-arbitration community has begun to reference it in tribunal appointments and case-management discussions.

Current Doctrinal Shifts and Live Questions

Section 36 automatic stay and the 2021 amendment proviso. The Arbitration and Conciliation (Amendment) Act, 2021 inserted a proviso to Section 36 allowing the court considering an unconditional stay application to grant the stay where a prima facie case of fraud or corruption affecting the making of the award is established. For infrastructure contracts, where allegations of bid-rigging, collusion, and corrupt practices are routine, the proviso has opened a new frontline — the Section 36 stay hearing is now a potential substantive hearing on fraud, not a procedural stamp.

Dispute adjudication boards and multi-tier clauses. Most infrastructure contracts contain multi-tier dispute resolution — contractor-claim certification, engineer-in-charge determination, dispute adjudication board, arbitration, challenge. Supreme Court and High Court rulings on whether each tier is a pre-condition to the next, and whether a party can skip a tier, continue to generate matter-specific analysis. Drafting at the contract stage determines whether a dispute moves quickly or stalls at the intermediate tier.

Time-bar and defects-liability clauses. Most EPC contracts contain contractor-claim time limits — 28 days, 60 days, or a staged-notice regime — that operate as condition precedents. Non-compliance with the contractor-claim clause continues to defeat otherwise meritorious claims. The drafting and enforcement of these clauses is a primary battleground in post-completion infrastructure disputes.

Liquidated damages and the Section 74 cap argument. Section 74 of the Contract Act caps damages at the stipulated amount where a clause names a sum. The judicial treatment of liquidated damages as a genuine pre-estimate of loss versus an in terrorem penalty continues to affect infrastructure claims. Contracts increasingly include explicit genuine-pre-estimate language to pre-empt the Section 74 reduction, though the argument remains open at the enforcement stage.

Parallel arbitration and group-of-contracts claims. Infrastructure projects typically involve a main contract, multiple sub-contracts, and sponsor guarantees. When a dispute arises, the question of which tribunal hears which claim, how awards bind which parties, and whether non-signatory principals can be joined under the Group of Companies doctrine (retained as a consent-based doctrine in Cox and Kings Ltd. v. SAP India Pvt. Ltd. 2023 INSC 1051) is a recurring preliminary issue.

Strategic Considerations for Construction and Infrastructure Disputes

Construction dispute strategy is shaped at three inflection points — contract drafting, project execution, and claim formulation. A dispute-aware drafting stage builds in multi-tier resolution, dispute-board mandates, time-bar calibration, liquidated-damages genuine-pre-estimate language, and a seat-and-venue decision that preserves enforcement optionality. A dispute-aware execution stage protects the contemporaneous record — notices, claim certification, programme updates, and site minutes — that forms the evidentiary backbone of any later claim.

Claim formulation at the dispute stage requires a technical-legal integration that most general commercial practices treat as a sequential exercise. The stronger practice treats quantum, delay, causation, and legal characterisation as a single analytical unit. For a claimant, the objective is to construct a claim that survives both the factual scrutiny of a technical tribunal and the legal scrutiny of the Section 34 court. For a respondent, the objective is to expose the claim’s technical gaps early enough that the tribunal’s reasoning cannot be cured at the award stage.

Cross-border infrastructure matters — foreign contractor, Indian project, mixed governing-law architecture — require a seat designation that preserves Indian-court interim relief access where asset protection is needed. Post BALCO (2012) 9 SCC 552, Part I of the Arbitration Act does not apply to foreign-seated arbitrations by default; Section 9 interim relief survives only where the parties have not excluded Part I. Clause drafting at the outset determines whether the Indian court remains available for asset and evidence protection during a foreign-seated arbitration.