Phurpa Lhamo | Wangdue

A contract company in Punatsangchhu Hydroelectric Project I (PHPA I), Larson & Toubro (L&T), will now appeal to the Bhutan Alternative Dispute Resolution Centre (BADRC) to resolve issues related to payments and other claims.

L&T had initially approached PI authorities to compensate them Nu 3.91 billion (B) for keeping their machines and human resources idle last year.

PI’s dispute resolution committee established that L&T’s Nu 3.91 billion (B) claims were not maintainable.

According to PI’s managing director (MD), NC Bansal, L&T had notified through its legal firm of their intent to refer the claims for adjudication by way of arbitration in July last year.

NC Bansal said that L&T had filed for arbitration in India and were yet to file one to the BADRC.

He added that following the arbitration notice by L&T, arbitrators had been appointed. “But given the judgment of the Supreme Court of India to follow the Bhutan Alternative Dispute Resolution Act 2013, the dispute for arbitration would have to go to the Alternative Dispute Resolution Centre.”

Negotiated settlement

Meanwhile, in May this year, Tengye Lyonpo as chairman of PI constituted an independent review committee to study L&T’s claims.

Following the committee’s study, the economic affairs ministry had directed PI to pursue a negotiated settlement.

The Bhutan Alternative Dispute Resolution Act 2013 provides for negotiated settlement. Section 166 of the Act states that during the negotiated settlement proceeding, the parties shall not initiate any arbitral or judicial proceedings in respect of a dispute that is the subject of the negotiated settlement process.

NC Bansal said that for a negotiated settlement proceeding to begin, L&T had to file for arbitration with BADRC. “Accordingly, L&T has also given their consent for a negotiated settlement.”

Once the negotiated settlement begins following both parties’ agreement, the settlement would be completed within three months.

The settlement would be taken up through an external expert committee consisting of members who are experts in contract matters of hydropower projects.

L&T had made 13 claims last year.

The claims were for compensation for keeping their resources idle due to slope failures at the right bank of the dam, payment for transportation of aggregates through additional lead, interest payment on delayed payment and payment for quarry related works.

NC Bansal said that claim also included interests claimed, which formed about 23 percent of the overall claim amount of Nu 3.91B. “PI is trying its best to resolve the claims based on the contract agreements signed with the contractor.”

Edited by Tashi Dema