CPWD Pre-Arbitration Route (Clause 25) — The “Dispute Ladder” Explained
In CPWD GCC 2023, the practical pre-arbitration step is Conciliation under Clause 25.1. Most issues first start as a contractual decision (Clause 2/5/12/17 etc.), then mature into a “dispute” under Clause 25, then go through Conciliation (25.1), and only after that (if unresolved) proceed to Arbitration (25.2 / 25.3).
🚦 Big picture — where “pre-arbitration” sits in CPWD
A clean map you can keep in your head during real project fights.
Under the CPWD GCC 2023, the dispute ladder is built into Clause 25 — Settlement of Disputes by Conciliation and Arbitration. Read together with CPWD Works Manual 2022 (para 5.21.1 “Pre-arbitration and Arbitration Mechanism”), the effective route is:
Contractual decision (EIC / Authority) → “Dispute” under Clause 25 → Conciliation under Clause 25.1 → then Arbitration under Clause 25.2 / 25.3.
Also note from the Works Manual 2022 salient features that the old Dispute Resolution Committee (DRC) route has been removed, and the conciliation + arbitration mechanism under Clause 25 has been modified to replace it. So today, in CPWD world, the only real “pre-arbitration” route expressly recognised in the standard documents is Conciliation under Clause 25.1.
✅ Mini checklist — “Am I still in contractual stage, or already in Clause 25?”
- Do I have a written decision / instruction / order / record from EIC or competent authority?
- Is there a clear disagreement (you have objected in writing, with reasons)?
- Does it fit Clause 25 chapeau (question/claim/right/matter “arising out of” the contract)?
- If yes → your next clean step is usually Conciliation under 25.1 (not “straight arbitration”).
🧩 Practical Builder — “What’s my next step?”
Pick your problem. Get a clean CPWD-style action path you can use in emails/letters.
📁 “File hygiene” — what to attach (so your conciliation request looks serious)
- Decision/record being challenged (with date + ref no.)
- Your objection letter (why the decision is wrong + clause basis)
- Hindrance register / drawings delay proof / site orders (as applicable)
- Computation sheet (EOT days, rate analysis, recovery calculation)
- A one-page “relief sought” summary (what exactly you want)
| Seed clause | Typical decision | How it becomes a Clause 25 dispute |
|---|---|---|
| Clause 2 | Authority computes delay attributable to contractor | Contractor disputes attribution / period / calculation → seeks conciliation (25.1) |
| Clause 5 | EOT grant/denial by competent authority | Disagreement on hindrances / entitlement → Clause 25 chapeau → conciliation |
| Clause 12 | Rates/quantities for deviations/extra items | Rate fixation or MB records challenged → “matter relating to execution” → conciliation |
| Clause 17 | Recoveries from SD/BG or release refusal | Contractor disputes basis/quantum → “right/matter” arising out of contract → conciliation |
1️⃣ First layer — contractual decision stage (before Clause 25 even kicks in)
This is where most disputes are actually “born” — quietly — inside day-to-day administration.
Before anything becomes a “dispute” under Clause 25, it usually starts as a decision or instruction under some other clause — and that decision is what later gets challenged.
- Clause 2 — Compensation for Delay: the authority specified in Schedule F (often SE/CE) determines delay attributable to the contractor. That determination becomes dispute-fuel if you disagree.
- Clause 5 — Time & EOT: the competent authority decides justified extensions. If your EOT is denied or cut down, that decision becomes a classic Clause 25 issue.
- Clause 12 / Clause 17 (and other “working clauses”): rates, quantities, security deductions, BG issues, recoveries… all produce written records/decisions that can later move into Clause 25.
So “pre-arbitration” practically starts here: a decision is taken under a working clause, and only then it can graduate into a “question, claim, right, matter or thing” under Clause 25.
🧠 Quick mindset shift (helps you write stronger letters)
- Don’t write: “We are going to arbitration.”
- Write: “We dispute the decision dated __ under Clause __ and request conciliation under Clause 25.1.”
- Keep the dispute anchored to a specific written decision (date + ref) — it makes your case feel “real”.
2️⃣ Clause 25 chapeau — when does something become a “Clause 25 dispute”?
The chapeau is the “door definition”: if you fit it, you can use the ladder.
The opening part of Clause 25 in the GCC (paraphrased) basically says: except where otherwise provided, all questions and disputes relating to specifications, drawings, instructions, quality, materials, and any other claim/right/matter arising out of or relating to the contract (during progress or after completion/termination) shall be dealt with “hereinafter”.
That “hereinafter” is exactly: Clause 25.1 (Conciliation) + Clause 25.2/25.3 (Arbitration / appointment).
So the moment a party is unhappy with a decision / record / drawing / instruction (and it fits the chapeau), it becomes eligible to be taken through the Clause 25 ladder.
⚠️ Common traps that keep people stuck (and angry) for months
- No clear “dispute framing” letter — you complain, but never formally dispute the decision.
- No computation — your relief is emotional (“please reconsider”) instead of quantifiable.
- Skipping 25.1 — you jump language to “arbitration”, inviting procedural resistance.
🔗 Keep learning (related CPWD reads)
Use these to build a stronger CPWD administration “toolkit” around your Clause 25 file.
Clause 25.1 Conciliation (CPWD GCC 2023) — The Key Pre-Arbitration Route
In CPWD GCC 2023, Clause 25.1 Conciliation is the formal pre-arbitration step. If either party disputes a written decision/record/drawing (or claims work is outside contract), they can refer the dispute (with amount claimed) to the Conciliator (Special DG/ADG as per Schedule F) using Appendix XVII. The conciliation is intended to finish within 60 days of receipt of reference (45 days + up to 15 days extension).
📌 What Clause 25.1 says (in substance)
Who can trigger conciliation?
- Contractor can refer if they (i) consider work demanded is outside contract requirements, or (ii) dispute any drawing/record/decision given in writing by the Engineer-in-Charge.
- Engineer-in-Charge can refer if they consider any act/decision of the contractor in connection with the contract/execution to be unacceptable and disputed.
What the Conciliator can do (and how it feels in real life)
- Call brief written statements describing disputes and points at issue.
- Call additional information as considered appropriate.
- If there is settlement scope: formulate terms → send to both → re-formulate after observations.
- If parties agree: sign a written settlement agreement (stamp paper), which the Conciliator authenticates and issues copies.
⚖️ Two restrictions + one timeline that people forget
- No advocates / legal counsel before the Conciliator (Clause 25.1).
- Conciliation termination as per Section 76 of the Arbitration & Conciliation Act, 1996.
- 45 days to complete from receipt of reference, extendable by 15 days → deemed termination at 60 days.
🧩 Quick Builder: “Can I refer under 25.1?” + Deadline Calculator
📎 What to include in Appendix XVII reference (practical list)
- Dispute title (one line) + amount claimed per dispute (even if provisional).
- Trigger document: decision/record/drawing/instruction being disputed (ref + date).
- Your position: short facts → clause basis → computation → relief sought.
- Intimation proof to other party (email/letter acknowledgement).
- Clean attachments index (so the Conciliator can scan in minutes).
Tiny realism note: Clause 25.1 bans advocates in front of the Conciliator — so your best “advocate” is a neat, evidence-indexed file.
📎 Manual cross-reference (Works Manual 2022)
Works Manual 2022, para 5.21.1 says the pre-arbitral and arbitration process shall be as per the arbitration clause in the contract and the Arbitration & Conciliation Act, 1996 — which directly points you back to Clause 25 of the GCC.
And the Salient Features (point 30) confirm the old DRC route is dispensed with and the conciliation + arbitration procedure is modified — meaning Clause 25.1 conciliation is now the formal first rung.
🔗 Related reads to strengthen your Clause 25 file
Clause 25.2 / 25.3 — The “Gate to Arbitration” (Appendix XVIII + XIX)
To actually trigger CPWD arbitration, you must send the Clause 25.2 notice in Appendix XVIII to the Arbitrator Appointing Authority (CE/SE as per Schedule F) with copy to the other party. If you choose the MoHUA sole arbitrator route under Clause 25.3, attach the Section 12(5) waiver declaration in Appendix XIX.
🔔 Clause 25.2 — Arbitration notice (what “opens the gate”)
When can you issue the 25.2 notice?
Clause 25.2 (in summary) lets either party move to arbitration if: (a) conciliation under 25.1 fails, or (b) the Conciliator does not give a settlement proposal within the 60-day window.
🚧 Procedural reminders that keep your route clean
- Send Appendix XVIII to the Arbitrator Appointing Authority (CE/SE as per Schedule F) and copy the other party.
- List disputes clearly and keep “amount claimed” per dispute visible (helps tribunal framing later).
- Conciliation can be skipped as per Clause 25.2 — but skipping often reduces settlement chances and hardens positions.
Tribunal basics you highlighted (keep it simple for readers)
After notice, the Appointing Authority appoints arbitrator(s) and refers disputes. Tribunal size depends on contract amount (you noted the ₹100 crore cut-off). Arbitrators are required to be Graduate Engineers with public works contract experience and prior seniority (CE-level, etc.).
🧩 Notice Builder (Appendix XVIII) + MoHUA option (25.3)
Practical drafting vibe: keep the Appendix XVIII notice “boringly structured” — disputes list + amounts + relief + annexures index. Your future self will thank you at pleadings stage.
🔗 Related reads (to connect the “gate” to real disputes)
CPWD GCC 2023 Dispute Ladder: Pre-Arbitration → Arbitration (Clause 25)
In CPWD GCC 2023, disputes typically climb a simple ladder: contract administration decisions (Clause 2/5/12/17 etc.) → become a Clause 25 “question/claim/right/matter” (chapeau) → go to Conciliation under Clause 25.1 (Appendix XVII, 60-day outer limit, Section 76 termination) → then the “gate to arbitration” is the Clause 25.2 notice (Appendix XVIII) and optionally Clause 25.3 MoHUA sole arbitrator with Section 12(5) waiver (Appendix XIX) → then arbitration proceeds under Clause 25 + the A&C Act 1996.
🪜 The compressed CPWD-style ladder (with clause plugs)
✅ Mini checklist (so the reader doesn’t miss the obvious)
- Keep the trigger document: the written decision/record/drawing/instruction you are disputing (with ref & date).
- State amount per dispute: even if provisional, show a computation trail.
- Use Appendix XVII → XVIII → XIX (if MoHUA): don’t invent formats unless contract allows.
- Don’t “argue forever” inside letters: once you want arbitration, the gate is Appendix XVIII to the appointing authority (with copy to the other party).
🧭 Route Helper: “Where am I on the ladder?”
Tiny engagement hook you can add in your article text: “If you can’t point to the rung you’re on, you’ll waste 3 months in letters — and still not be inside the dispute mechanism.”
🔗 Related reads (to keep them on-page longer)
0️⃣ Setup: The classic CPWD “EOT with Cost” dispute (Hospital Block)
Month-12 scope change (extra ICU floor + structural system change) is a Clause 12 variation. That change naturally pushes time beyond 24 months, so the contractor seeks EOT under Clause 5 and cost (extra item rates + prolongation impact). If the authority denies EOT/cost (or delays decisions), the matter becomes a Clause 25 dispute to be routed through conciliation and/or arbitration.
🎬 The story in CPWD language (so readers instantly “see” the dispute)
Project
Work: Hospital block • Original duration: 24 months. At month 12, the Employer instructs a major scope change: add an extra ICU floor and change the structural system.
Where each clause fits (no confusion)
Clause 12 is the “power switch” for the change (alterations/additions/substitutions). Once issued by EIC formally, the changed work becomes part of the contract — but the contractor is now entitled to extra cost (rates for extra/substituted items) and extra time where the variation pushes completion.
Clause 5 is the “time justice” clause: if the delay is not contractor’s fault (here: Employer-instructed scope change), the contractor seeks EOT. This becomes the classic dispute when the department says: “Do the change, but finish on original date.”
What makes this a “real” dispute (not just planning noise)
Because the instruction is formal and major, the contractor’s entitlement is not “hope” — it is a structured request: EOT under Clause 5 and cost under Clause 12 (plus prolongation/overheads impact). If the authority either: (a) rejects EOT, (b) gives partial EOT, (c) delays decisions until the end, or (d) pays only item rates but ignores prolongation, you now have a textbook “EOT with cost” dispute fit for Clause 25.
🧩 Scenario Builder: generate your “EOT + Cost” dispute pack
Add a “1-minute quiz” right after this setup.
Example: “Which clause fixes time impact of a variation?” + “Which appendix starts conciliation?”
Insert one screenshot-style checklist.
“10 documents to attach for EOT with cost (variation-driven)”—people love saving it.
Use a tiny numeric example.
“If prelims are ₹40 lakh/month and EOT is 4 months, prelims impact alone ≈ ₹160 lakh (before financing, idle plant, etc.).”
End this section with a single next action.
“Draft the issue statement + annexures index (copy from the builder above).”
🔗 Related reads (CPWD + pricing logic that supports Clause 12 rates)
1️⃣ Stage 1–2: Hindrance notices → Formal EOT + Cost submission (Clause 5 + 12)
Treat Stage 1 like switching on your “project CCTV”: hindrance register + early notice proves delay is not contractor-caused. Stage 2 is the “proper file”: Clause 5 EOT request + Clause 12 valuation + supporting enclosures. If the department later disputes this, you already have a tight record before anyone even says “Clause 25”.
🧠 What the contractor should do (and why it wins later)
Stage 1 — Site hindrance + early notices (Clause 5 + Manual)
Record the hindrance immediately.
As soon as the ICU floor/structural change is issued, enter it in the hindrance register with:
date, reference of the change order, affected activities, and the “reason it is beyond contractor control”.
Send a “potential delay” notice within a reasonable time.
Don’t wait for months. This is your early warning to EIC that the change is touching the critical path and needs programme updates.
Ask for programme/milestone update under Clause 5 logic.
Your notice should request the EIC to treat it as a hindrance and allow an updated bar chart / milestones reflecting the revised scope.
⚖️ Why Stage 1 matters legally (even before Clause 25 exists)
- AExcusable delay story: you frame the event as Employer-driven, not contractor-caused.
- BContemporaneous evidence: dated records beat “afterthought” claims in every forum.
- CCompensability foundation: it becomes easier to connect prolongation costs to the event.
- DClean escalation path: if the department later denies, you can show you acted promptly and reasonably.
Stage 2 — Formal EOT + cost submission (Clause 5 + 12.1 / 12.2)
After the impact is clearer (often 2–3 months into redesign + resequencing), submit a structured application: it should read like a “file note for the authority” — short headings, numbered enclosures, and a clean decision request.
📝 Generator: copy-ready Stage 1 notice + Stage 2 formal claim
Stage 1 letter: Hindrance / Potential Delay Notice (Clause 5 + Clause 12)
Stage 2 letter: Formal EOT + Cost Application (Clause 5 + Clause 12.1/12.2)
Change order (Clause 12)
Ref + date + drawings/spec revision list.
Programme impact
Updated CPM / bar chart + narrative linking to critical path.
Clause 12.1 “additional cost vs tender value” sheet
Computation supporting proportional time extension logic (as claimed).
Clause 12.2 rate analysis
New/altered item rate build-ups (materials, labour, plant, leads/lifts).
Hindrance register extract
Entry showing the same event and dates (contemporaneous proof).
Cost heads for prolongation
Prelims/overheads breakdown for the additional months + supporting payroll/plant logs.
Escalation linkage (if invoked)
Clause 10CC computation notes showing how variation-driven time affects escalation.
Positioning line you can add at the end of Stage 2: “This submission is made within contract administration. If a written decision is not issued fairly and timely, the matter may crystallise as a dispute under Clause 25.”
🔗 Related reads (help readers understand rates + admin process)
3️⃣ Stage 3: EIC’s written decision becomes the “dispute trigger” (Clause 5 + 12 + Clause 25 chapeau)
The “dispute” usually becomes real the day the EIC issues a written decision (speaking order / file noting + letter): for example, EOT granted 4 months instead of 6, and overheads/escalation rejected. That written decision gives the contractor a clear, crystallised grievance—so the Clause 25 opening can bite: the matter shall be dealt with hereinafter through Clause 25.1 and then Clause 25.2/25.3, if needed.
🔍 What the EIC checks—and why the decision matters more than people think
What the EIC typically examines (your exact list, now in “decision logic” format)
Is the event truly a Clause 12 variation?
If yes, it becomes part of the contract—then time and rates have to be dealt with under the contract framework.
Is the EOT duration justified under Clause 12.1 + Clause 5?
EIC may apply the Clause 12.1 approach (proportion to additional cost + the 25% allowance / such further time as reasonable) and cross-check the programme/critical path story under Clause 5.
Are the requested costs “inside the contract fence” (Clause 12.2 + other provisions)?
New/altered item rates are handled, but time-related costs (prolongation overheads, escalation impact) often become the battleground.
Quick evidence matrix (what becomes Exhibit-A later)
| Item | Clause anchor | What it proves |
|---|---|---|
| Clause 12 instruction (ref + date + drawings) | Clause 12 | Event is Employer/EIC-driven (not contractor-caused) |
| Hindrance register + early notice | Manual discipline + Clause 5 logic | Contemporaneous record + prompt warning |
| Programme / CPM update | Clause 5 + critical path narrative | Time impact is real and traceable |
| EIC speaking order / letter | “Decision in writing” + Clause 25 chapeau | Crystallises grievance (this is the trigger) |
🎛️ Decision Dial: simulate the EIC order → auto-generate the “crystallised grievance” note
Ask for the complete decision record.
Collect the speaking order / file note, annexures, and the exact calculations used for EOT and valuation.
Mark the “gap items” clearly.
Example: short EOT months, rejected overheads, denied escalation, deferred rates—list them as numbered “issues”.
Send one clean representation to EIC.
Keep it factual: “We accept what is allowed, but dispute items 2, 3, 4… with reasons and references.”
Now the Clause 25 opening becomes relevant.
The moment you have a written decision (or refusal), the matter fits the Clause 25 chapeau and can go to Clause 25.1 conciliation.
🔗 Related reads (helps readers connect delay → claim → dispute)
4️⃣–5️⃣ Stage 4: Representation → Stage 5: Clause 25.1 Conciliation (Appendix XVII)
In CPWD practice, after the EIC’s decision (Stage 3), the contractor often tries a calm administrative representation to the Schedule F authority (SE/CE) first (Stage 4). If it’s ignored/rejected, the dispute is now “ripe” for the formal pre-arbitration rung: Clause 25.1 conciliation using the Appendix XVII proforma (Stage 5).
🧭 The practical route (what CPWD jobs really do before Clause 25.1)
Stage 4 — Representation / higher-up review (administrative, before Clause 25.1)
You accept the allowed parts… and isolate the “gap”.
Example: EOT granted 4 months, claimed 6; overheads/escalation partly rejected; certain rates disputed.
You send one clean representation to SE/CE (Schedule F authority).
Tone: factual, respectful, “please review”. This is not a fight letter — it’s a file-cleaning letter.
If ignored/rejected → dispute becomes ripe for Clause 25.1.
Now you have: (a) EIC decision, (b) your representation, and (c) the authority’s stance (or silence).
Tip: the fastest way to get stuck in conciliation is unquantified disputes. Appendix XVII likes numbers.
Clause 25.1 conciliation is designed to be fast. If it settles, you sign a written settlement agreement (stamp paper), and the dispute ends right there. If it doesn’t settle (or time lapses), you move to Clause 25.2.
🧾 Generators: Stage 4 Representation + Stage 5 Clause 25.1 Reference (Appendix XVII style)
| Dispute title | Short particulars (what/why) | Amount claimed (₹) | Action |
|---|
Clause 25.1 expects you to refer the dispute and the amount claimed for each dispute to the Conciliator (Special DG/ADG concerned), in the Appendix XVII proforma, with intimation to the other party. CourtKutchehry Clause 25.1
Short statements
Conciliator asks both sides for brief written statements + any additional info he considers appropriate. CourtKutchehry
Possible settlement terms
If he sees scope, he formulates terms of settlement, sends to both parties, and may re-formulate after observations.
Settlement agreement
If agreed, parties sign a written settlement agreement (stamp paper) authenticated by the Conciliator—dispute ends.
60-day outer limit
Process aims to finish in 45 days (+ 15 extension). If no settlement / time lapses → move to Clause 25.2.
No advocates before the Conciliator
Clause 25.1 bars representation by advocate/legal counsel in conciliation—keep it technical, factual, and document-driven.
🔗 Related reads (help readers stay longer)
6️⃣ Stage 6 — When Conciliation Fails: Invoking Arbitration (Clause 25.2 & 25.3)
If conciliation fails (or time lapses, or you skip conciliation), the “gate” to arbitration is a Clause 25.2 notice to the Arbitrator Appointing Authority (CE/SE as per Schedule F) in the Appendix XVIII format, with a separately quantified dispute list. If you opt for the Clause 25.3 MoHUA arbitrator route, attach the Section 12(5) waiver in Appendix XIX format.
🧠 Stage 6 in plain English (what changes after conciliation)
When conciliation fails: you invoke arbitration (Clause 25.2 & 25.3).
If (a) the Conciliator declares failure, or (b) 60 days pass without settlement, or (c) the parties choose not to use conciliation,
then either party can issue an arbitration notice.
Letter 4 — Notice invoking arbitration (Appendix XVIII, Clause 25.2).
Address it to the Chief Engineer / Superintending Engineer (Arbitrator Appointing Authority) as per Schedule F.
The notice should list the disputes and the amount claimed for each dispute in the Appendix XVIII style.
Option: MoHUA / designated arbitrator (Clause 25.3).
If you choose the MoHUA-panel option, you attach a Section 12(5) waiver declaration (Appendix XIX format)
along with the Clause 25.2 notice.
Once arbitrator(s) are appointed: pre-arbitration route is complete.
Then arbitration proceeds with SoC/SoD, evidence, hearings, and award (as per the contract + the Arbitration and Conciliation Act, 1996).
Cause of invoking: conciliation failed / time lapsed / conciliation not used (choose and state it).
Dispute list: each dispute has a short description + a clean ₹ amount (no lumping).
Core refs: EIC decision (Stage 3), representation record (Stage 4), conciliation reference/outcome (Stage 5, if used).
Schedule F: confirm the correct Appointing Authority (CE/SE) and the proforma (Appendix XVIII).
If opting Clause 25.3: attach Appendix XIX Section 12(5) waiver declaration.
| Stage | What happens | Key CPWD references | Key document / proforma |
|---|---|---|---|
| 0 | Scope change (extra ICU floor) | Clause 12 (alterations/omissions become part of contract) | EIC’s variation / change order |
| 1 | Hindrance notice & early warning | Clause 5 (time is essence; delays beyond contractor) | Hindrance entry + initial letter |
| 2 | Formal EOT + cost claim | Clause 5, Clause 12.1, Clause 12.2, Clause 10CC | Detailed EOT & cost application |
| 3 | EIC decision | Same clauses as above + Clause 25 (chapeau) | Speaking order / letter from EIC |
| 4 | Representation to higher authority (optional but common) | Clause 5 authority in Schedule F, Works Manual Ch. 5 | Representation to SE/CE |
| 5 | Conciliation (pre-arbitration route) | Clause 25.1, Works Manual 5.21.1 | Reference in Appendix XVII, statements of case |
| 6 | Arbitration notice (if conciliation fails) | Clause 25.2 (and 25.3 if MoHUA arbitrator route) | Appendix XVIII notice + optional Appendix XIX waiver |
🧾 Generators: Appendix XVIII (Clause 25.2 Notice) + Appendix XIX (25.3 Waiver)
| Dispute title | Short particulars (what/why) | Amount claimed (₹) | Action |
|---|
Note: This template is for documentation consistency with the Clause 25.3 “MoHUA arbitrator” route described in CPWD GCC-style mechanisms. Always align the final wording with your contract’s Appendix XIX format.