Concurrent delay can be defined as the occurrence of two or more critical events of delay, occurring concurrently and in parallel during the lifecycle of a project, one of which is attributable to the employer and the other to the contractor. Thus, even if one delaying event is absent, the other would still delay the project. For example, if there is a delay of 90 days in declaration of appointed date due to the employer’s failure to provide 90% Right of Way to the Project Site to the contractor, and if during these 90 days period, the contractor also fails to mobilise its resources & manpower, such delay would be considered as a concurrent delay.
There may be certain scenarios where two or more delays may arise at different times, however, impact the same work which is required to be carried out. If one such event of delay is attributable to the employer and the other to the contractor, such delays are deemed to have a concurrent effect on completion of the project and would also be considered as concurrent delay events. However, two separate events occurring at different times must have delaying effects at the same time and each event needs to have caused delay in its own right.
The United Kingdom Scenario.
The Technological and Construction Court (TCC) in Henry Boot Construction (UK) vs. Malmaison Hotel (Manchester) [(1999) 70 Con. L.R.32A] (Malmaison Case), which is a leading English case law with regard to concurrent delay in a construction project, where no provision in the contract to cover concurrent delay is provided under the Agreement. In Malmaison Case, the TCC granted the contractor an extension of time for the period of delay caused by an event which attributable to the Employer, even though there was concurring event of delay on part of the Contractor as well. The precedent set out by the Malmaison case provided that, the contractor shall received a full extension of time for the whole period of delay, if one of the concurrent causes of delay was at employer’s risk and the other delay was partly caused by an even, for which the contractor was responsible. The rationale of the Malmaison Case was relied upon by the TCC in the case of Walter Lilly & Co. Ltd. vs. Mackay [(2012) EWHC 1773 (TCC)], wherein the TCC once again granted the contractor with extension of time as per the provision of extension of time clause provided in the Agreement.
Notably, in the case of North Midland Building Ltd. vs. Cyden Homes Ltd. [(2017) EHC 2414 (TCC)], the TCC upheld a clause in the agreement which disallowed the contractor’s claim fir extension of time. The Agreement executed and entered into between parties, provided that any delay caused by a relevant even (which is an employer’s risk event) which is concurrent with another delay for which the contractor is responsible, shall not be taken into account while assessing the contractor’s claim for extension of time. The TCC was of the opinion that the Agreement unequivocally disallowed contractor’s claim for extension of time, in case of any event of delay which can be attributable to the contractor. In another leading case law De Beers UK Ltd. (formerly Diamond Trading Co. Ltd.) vs. Atos Origin IT Services UK Ltd. [(2010) EWHC 3276 (TCC), the TCC although allowed the contractor an extension of time due to occurring of concurrent delay, however, held that the contractor can not recover damages for delay in circumstances where is also responsible of any delaying event.
The Indian Scenario.
Section 55 of the Indian Contract Act, 1872 (the Act) provides for law relating to the delay in performance of any obligation of parties to an Agreement. The said Section is effectively divided into 3 (three) parts, (i) when time is of the essence of the contract renders the contract voidable if a party fails to perform its obligation on or before stipulated; (ii) in cases where time is not of the essence, then the party becomes entitle to compensation from the breaching party; and (iii) when one party accepts performance of any obligation after the stipulated time, the party cannot claim compensation, unless, at the time of such acceptance the party gives notice to the breaching party of its intention.
to do so. Vide aforesaid provision, it can be rightly inferred that under certain circumstances, the contractor can still be entitled to damages even though the contractor has agreed not to claim damages.
The Hon’ble Supreme Court of India in the matter of General Manager, Northern Railways vs. Sarvesh Chopra [Civil Appeal No. 1791 of 2002], while interpreting the provision of Section 55 of the Act had observed as follows:
“Thus, it appears that under the Indian law, in spite of there being a contract between the parties whereunder the contractor has undertaken not to make any claim for delay in performance of the contract occasioned by an act of the employer, still a claim would be entertainable in one of the following situations: (i) if the contractor repudiates the contract exercising his right to do so under Section 55 of the Contract Act, (ii) the employer gives an extension of time either by entering into supplemental agreement or by making it clear that escalation of rates or compensation for delay would be permissible, (iii) if the contractor makes it clear that escalation of rates or compensation for delay shall have to be made by the employer and the employer accepts performance by the contractor in spite of delay and such notice by the contractor putting the employer on terms.”
The Hon’ble High Court of Delhi in the matter of Rawla Construction Co. vs. Union of India [ILR 1982 Delhi 44], wherein the Hon’ble Court was deciding whether the contractor was entitled for compensation in a case where the delay in the execution of the contract was caused by the reason of default on the part of the employer, ultimately delaying the entire project. The Hon’ble Court had observed that ‘where the cause of delay is due to the breach of contract by the employer, and there is also an applicable power to extend the time, the exercise of that power will not, in the absence of clearest possible language, deprive the contractor of his right to claim damages for the breach’. Further, the Hon’ble Court was of the opinion that such provisions as attempt to deprive the contractor of the right to claim damages will be strictly construed against the employer. Because such a clause will have calamitous.
consequences for the Contractor. He will have not remedy anywhere, however outrageous the conduct or behaviour of the employer maybe, however interminable the delay.
The Hon’ble High Court of Delhi has in the case of Simplex Concrete Piles (India) Ltd. vs. Union of India [(2010) 115 DRJ 616], was of the view that if an agreement contains any clause which takes away the right of the Contractor to claim damages under Section 73 or Section 55, the said clause would be in violation of public policy as envisaged under Section 23 of the Act. However, in contradiction to its earlier view in Simplex case, the Hon’ble High Court in the matter of PWD vs. M/s Navayuga Engineering Co. Ltd. [(2014) SCC Online Del 1343], had held clauses barring the contractors to claim damages to be in consonance with the public policy of the country. Further, the Hon’ble Court distinguished the Simplex case by pointing out, that the contractor in the Simplex case did not have the right to sue for breach, whereas in the instant case, the Contractor had an option to sue for damages by not agreeing to the time extension provided under the Agreement.
Conclusion.
As discussed above, a distinction can be drawn between the judicial precedents prevailing in the United Kingdom and the judicial precedents relevant in India. Notably, the Indian Courts have allowed and held the contractor to be entitled for compensation in case of breaches which are solely attributable to the employer along with extension of time to complete the project. Unlike Indian Court, the Courts of the United Kingdom have only granted extension of time to the contractor. However, there are certain cases as well where Indian Courts have not only granted an extension of time to the contractor and no damages thereof.
Vishal Singh , Senior Associates
Maheshwari and Co.
