Engineering, procurement and construction (EPC) contracts govern the delivery of infrastructure projects across highways, railways, power, oil and gas, urban infrastructure and industrial projects in India. Disputes arise from variation orders, delays, force majeure events, payment defaults, defects liability and termination.
EPC contracts in India follow either FIDIC standard forms (Silver Book for EPC/turnkey, Yellow Book for plant and design-build, Red Book for measurement contracts) or bespoke employer-drafted contracts used by government authorities (NHAI, NHPC, NTPC, Indian Railways, state PWDs). The most frequent disputes involve: variation and change-order claims where the employer directs additional or changed work without agreed pricing; extension-of-time claims where the contractor is delayed by employer-responsible or force-majeure events; liquidated damages imposed for delay where the contractor contests the employer\'s entitlement; defects-liability disputes; payment certification disputes with the engineer or employer; and termination for alleged default.
AMLEGALS advises employers, contractors, subcontractors and lenders on EPC contract disputes across the project lifecycle: from contract review and risk allocation during procurement, through claim preparation and negotiation during execution, to arbitration and enforcement post-completion. The practice covers both domestic and international construction arbitration.
Reviewing and negotiating EPC contracts to allocate risk on variations, delays, force majeure, limitation of liability and dispute resolution.
Advising on the preparation, valuation and prosecution of variation claims under FIDIC Sub-Clause 13 or bespoke variation mechanisms.
Preparing extension-of-time claims using delay-analysis methodologies (as-planned vs as-built, impacted as-planned, time-impact analysis).
Advising on force majeure claims, frustration and hardship under EPC contracts and Indian contract law.
Advising on the consequences of termination for default, termination for convenience and repudiatory breach.
Representing parties in ad hoc and institutional arbitration of construction disputes under the Arbitration and Conciliation Act 1996.
An EPC (engineering, procurement and construction) or turnkey contract is a form of contract where the contractor assumes responsibility for the entire scope of design, procurement of materials and equipment, and construction of the project for a fixed lump-sum price and within a fixed time. The employer's involvement is limited to specifying requirements and accepting the completed facility. The FIDIC Silver Book (Conditions of Contract for EPC/Turnkey Projects) is the most widely used international standard form for EPC contracts.
Under the FIDIC Red Book and Yellow Book, the engineer is appointed by the employer and acts as the contract administrator — certifying payments, issuing variation orders, granting extensions of time and making determinations on disputes under Sub-Clause 3.5. The engineer is required to act fairly between the parties when making determinations. Under the Silver Book (EPC/turnkey), there is no engineer; the employer performs the administration role directly.
Liquidated damages (LDs) are a pre-agreed sum payable by the contractor to the employer for each day or week of delay beyond the contractual completion date. Under Indian law, Section 74 of the Indian Contract Act 1872 governs liquidated damages — the court may award reasonable compensation not exceeding the stipulated amount, whether or not actual loss is proved (ONGC v Saw Pipes, 2003).
Most EPC contracts in India contain arbitration clauses. Government infrastructure contracts (NHAI, railways, NTPC) typically provide for arbitration under the Arbitration and Conciliation Act 1996, often with an arbitral tribunal constituted under the employer's arbitration rules. International EPC contracts may provide for institutional arbitration under ICC, SIAC or LCIA rules. Litigation in civil courts is uncommon for EPC disputes given the technical complexity.
Force majeure in EPC contracts refers to events beyond the reasonable control of the parties — typically natural disasters, war, epidemics, changes in law and government action — that prevent or delay performance. The contractual force-majeure clause defines the qualifying events, notice requirements, consequences (extension of time, cost relief, termination) and the burden of proof. Indian courts interpret force-majeure clauses strictly; where the contract defines the events, the doctrine of frustration under Section 56 of the Indian Contract Act generally does not apply.
No. No engagement is treated as accepted until conflicts, scope and terms are confirmed in writing.
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