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Resolving disputes, avoiding litigation in India

Shanker Lal's picture
An overhaul of Dispute Boards looks to prevent delays in the creation of new infrastructure, such as the construction of roads and railways.
Photo: Simone D. McCourtie / World Bank

A significant percentage of government spending in India goes towards the creation of new infrastructure like the construction of roads, ports, railways and power plants. Construction contracts, however, often have a reputation for disputes and conflicts between contractors and governments. Such disputes ultimately delay implementation of the contracts and increase total costs, adversely impacting development outcomes of the projects.

Many countries have found that Dispute Boards offer an effective mechanism for resolving these issues in a timely and cost-effective manner. These boards, composed of one to three members, are set up upon commencement of a contract and help the involved parties avoid or overcome disagreements or disputes that arise during the contract’s implementation. The boards are less legalistic, less adversarial, less time consuming and less costly than options for resolving disputes within the legal system, including arbitration and litigation.

A 2004 study (PDF) shows that Dispute Boards have been successful in resolving even the most strenuous disputes with an almost 99% success rate. The savings in using these boards are enormous: another study indicates that in almost 10% of projects, between 8% and 10% of the total project cost was legal cost.

Here is a model Indian States can implement to ensure smooth flow of medical supplies to health facilities

Shanker Lal's picture
Photo: John Isaac / World Bank

Though the Indian government has steadily increased funding for its health sector, per capita allocation is still low; reform is thus critical to effectively utilize the available budget.

​The underlying question is: Given a set of resources, how do you procure goods in a way that achieves value for money and maximum efficiency?

In India, procurement of health sector goods has been a major concern for the government. Drugs and medical supplies are not procured and distributed in time, and this interruption in the delivery of services in health facilities affect the general population’s health outcomes.