Delays have beleaguered many a construction project in India, hampering the country from building to its ability and potential, and leading to additional costs incurred by the contractor. The reasons for delayIn India, delays mainly occur owing to obtaining statutory approvals, non-provisioning of right of way, utility diversion and approval of drawings and design. Delays are broadly classified based on responsibility and effect. Excusable delays arise from factors beyond the contractor’s control, such as force majeure events or employer-induced delays. These delays generally entitle the contractor to an extension of time (EoT); and in some cases, EOT costs, if there were no concurrent delays on account of the contractor. Conversely, non-excusable delays such as lack of resource mobilisation by the contractor lead to imposition of liquidated damages.Concurrent delays involve causes attributable to both the employer and contractor, necessitating forensic analysis to determine entitlements based on contractual terms. In National Highways Authority of India v. Sayedabad Tea Co. Pvt Ltd, (2019) SCC Online SC 1102, the Supreme Court of India discussed the role of expert witnesses in construction arbitration concerning delay analysis. The court emphasised the importance of expert evidence in assessing delays, analysing causation and determining liability in construction disputes. In Union of India v. Simplex Infrastructure Ltd, AIR 2017 Supreme Court 2119, the Apex Court emphasised the significance of expert evidence in construction disputes.Claim entitlements and legal considerationsVarious claims arise from construction delays, with their entitlements determined by the nature and impact of the delay. Principle 20 of the SCL Protocol (2nd edition) states: “The objective of a compensatory regime is to put the Contractor in the same financial position it would have been if the Employer Risk Event had not occurred.” Courts have also established some key principles regarding the burden of proof in delay claims. In Walter Lilly & Co. Ltd. v. Giles Patrick Cyril Mackay, [2012] EWHC 1773 (TCC), the court held that damages must be proven on the balance of probabilities under English law. In the US, in Florafax Intern, Inc v. GTE Market Resources, 22 Ill.1997 OK 7, 933 P.2d 282, it was held that delay claims required proof by a preponderance of evidence. In Bhagheeratha Engineering Ltd. v. NHAI, O.M.P. (COMM) 85/2019 and 88/2019, the Delhi High Court upheld the award of overhead expenses, relying on the MoRTH Standard Data Book and Chartered Accountant certificates. In NHAI v. Oriental Structures Engineers Pvt Ltd - Gammon India Ltd (JV), AIR 2013 Delhi 67, the court held that award of the additional cost towards machinery and overheads in the extended period is perfectly valid in terms of the contractual provisions when the delay has been found to be on the part of the employer. The Supreme Court has ruled that loss of profit is compensable once a breach is established, without requiring strict proof of actual loss ((i) A.T. Brij Paul Singh v. State of Gujarat, AIR 1984 SC 1703 (ii) Dwaraka Das v. State of M.P., 1999 (3) SCC 500). Whereas, in Unibros v. All India Radio & Anr, 2023 SCC Online SC 1366, and Batliboi Environmental Engineers Ltd v. HPCL-Mittal Energy Ltd, 2023 SCC Online SC 1208, the Supreme Court held that loss of profit claims require clear proof of delay not attributable to the contractor, lost opportunities and financial impact.In J G Engineers Pvt Ltd v. UOI, AIR 2011 SC 2477, the court duly examined the issue whether the contractor would be entitled to price escalation despite being it conditional in the terms of the contract for the extended period of contract, wherein the delay was attributable to the employer. The court reiterated the arbitrator’s view and held the contractor was not responsible for the delay and the price escalation automatically becomes payable.Disruption claims address productivity losses caused by employer-driven factors such as late approval of drawings or site constraints. The measured mile method is employed to calculate disruption claims.Acceleration claims arise when a contractor is required to expedite work due to the employer’s instruction (directed acceleration) or refusal to grant an EoT (constructive acceleration). Acceleration costs include additional labour, equipment and material procurement, assessed using the extra resource cost method.Apart from the above, costs of maintenance of bank guarantee and insurance policies during the EoT and financing charges form part of the EoT claims. Coming up!In upcoming months, a series of articles on delay analysis methods, calculation of overhead costs, idling claims, loss of profit, loss of productivity, disruption claim, acceleration claims and interest costs will be covered in detail with relevant judicial pronouncements. About the author: Ronak Desai is a construction lawyer and heads International Construction Law Offices, Mumbai. Email: rd@constructionlawoffices.com