Internal Assessment I–Drafting of Construction Agreement with

Arbitration Clause

SUBMITTED BY-

Radhika Khurana

17010122018

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2nd Year LLB

AGREEMENT

We M/s Ramky Constructions Ltd. , Resident of Ramky House Rajbhavan Road

Somajiguda, Hyderabad, executed an agreement deed on dated 24-08-2018 for the work of
“Construction of roads of Chirupalli area” with Hyderabad Municipal Corporation,
Amounting to Rs.50,00,000 ( Rupees Fifty Lakcs only) on the terms and conditions as
detailed mentioned in the agreement and have paid the stamp duty worth Rs.100/- ( one
hundred only) by means of one stamp sheet only.

Witness : Contractor

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This agreement made on this date of 24/08/2018 at Hyderabad between-

M/s Ramky Constructions Ltd., a company registered under Companies Act, 1956, on 17th
day of June 2009, and having their registered head office at Ramky House, Rajbhavan Road,
Somajiguda, Hyderabad, A.P., represented by it’s all the Managing Directors herein referred
to as builders which expression unless repugnant to the context or meaning thereof(shall
mean and include it’s executors, administrators, assignees etc.). (Party of One Part)

AND

Hyderabad Municipal Corporation- a municipal corporation registered under Hyderabad

Municipal Corporation Act, 1955 and duly represented by it’s Municipal Commissioner
having it’s registered office at CC Complex, Tank Bund Road, Lower Tank Bund,
Hyderabad, 500063, herein referred to as corporation which expression unless repugnant to
the context or meaning thereof. (Party of the Other Part)

Party of the one part is an engineering company with it’s expertise in construction of roads
and bridges.

And WHEREAS the party of the other part ia a Municipal Corporation and in the persuit of
their administrative duties, the corporation intends to get constructed roads of Chirupalli
Area.

And after the due discussion between the parties herein both the parties have agreed to enter
into this deed on the terms and conditions mentioned below-

NAME OF WORK- Construction of roads of Chirupalli area

Estimated Cost- Rs.50,00,000

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Earnest Money- Rs.22.1 Lacs

Time of Completion- Two Months

1) ENGINEER
The Engineer is the individual assigned by the Hyderabad Municipal Corporation to be in
charge of the project. The individual assigned as the Engineer may be an employee of the
Corporation or a consultant assigned by the Corporation.

2) CONTRACT EXECUTION
The Bidder to whom the contract is awarded shall, within two months after formation of
contract, execute the contract according to the terms and conditions. Failure to execute the
contract or furnish satisfactory bonds and proof of insurance will be considered cause for
annulment of award and forfeiture of the Bidder’s surety. Following the execution of the
contract, the Bidder shall become known as the Contractor.

3) INCREASED OR DECREASED QUANTITIES

The Contractor reserves the right to increase or decrease quantities from those originally
estimated and such changes will be paid for at the unit price bid so long as the total contract
amount is not changed more than ten (10) percent. Changes in excess of that amount will be
individually negotiated.

4) TIME OF COMPLETION
All contract work shall be completed within two months from the date of this contract.

5) FAILURE TO COMPLETE ON TIME

Will attract right of the other party to initiate arbitration proceedings..

6) PAYMENTS TO CONTRACTOR
Payments will be made to the Contractor on a bi-weekly basis. The Owner will make a partial
payment to the Contractor on the basis of an estimate, prepared by the Engineer, of the work
performed on the project during the preceding period less a five (5) percent retainer.

7) PROGRESS SCHEDULE
Start work within ten (10) days after receiving notice of award of contract or on or before the
date designated as the starting date in the approved detailed progress schedule.

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8) TAXES
The Contractor shall include, and will be deemed to have included, in its base bid and
contract price all applicable taxes which have been enacted into law as of the date the bid is
submitted.

9) CORPORATION’S RESPONSIBILITY
The Corporation shall not supervise, direct or have control or authority over, nor be
responsible for, Contractor’s means, methods, techniques, sequences or procedures of
construction or the safety precautions and programs incident thereto, or for any failure of
Contractor to comply with laws and regulations applicable to the furnishing or performance
of the work unless otherwise specified in the Special Provisions. Corporation will not be
responsible for Contractor’s failure to perform or furnish the Work in accordance with the
Contract Documents.

10) INDEMNIFICATION, DAMAGE LIABILITY AND INSURANCE

Indemnification, damage liability, and insurance shall be in accordance with the terms of this
contract.

i)- Worker's Compensation Insurance - The Contractor shall certify before the issuance of
the permit that the Contractor carries Worker's Compensation Insurance per the Statutory
Limits.

ii)- Bodily Injury and Property Damage - The Contractor, before issuance of the permit, shall
file with the Corporation copies of completed certificates of insurance, as evidence.

iii)- Contractor shall effect the insurance and indemnify the Corporation entirely from all
responsibility in this respect. The insurance must be placed with the company of repute with
scope of insurance to include all damages or losses.

iv)- Contractor should carry adequate insurance, satisfactory to the Corporation, to afford
protection against all claims for damages to public or private property, and injuries to
persons, arising out of and during the progress of the work, and to its completion and, where
specified in the permit, similar insurance to protect the owner of premises on or near which
construction operations are to be performed.

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11) ADVANCE

Mobilization advance limited to 10% of the contract price at simple interest, can be
sanctioned to the contractor on his specific requests under the contract. But it shall
be released only after obtaining a bank guarantee bond from a scheduled bank, for
the amount of advance to be released, and the same shall be valid for the duration of
this contract. This shall be kept renewed from time to time to cover the balance
amount, and likely period to complete recovery together with interest. The advance
should be released in not less than two instalments. The interest on the advance
shall be calculated from the date of payment to the date of recovery, both days
inclusive. It shall be ensured that at any time, bank guarantee is available for the
amount of outstanding advance. And the recovery should be commenced after 10%
of work is completed and the entire amount together with interest shall be recovered
on pro rata basis till the time 80% of the work is completed.

12) EQUIPMENT

For new equipments, 5% of tendered value or 90% of the price of such new
equipment paid by the contractor at 10% simple interest, can be sanctioned to the
contractor on specific request as per the term of the contract. The advance for
equipment shall be released only after obtaining bank guarantee bond form a
scheduled bank for the amount of advance to be released, and same being valid for
the contract period. 75% of such amount of advance shall be paid after the
equipment is brought to site, and balance 25% on their successful commissioning.

13) PAYMENT OF RUNNING BILLS

Contractor shall be entitled for payment of running bills on weekly basis or a lesser
period, if required, but not less than 10% of value of the contract. The running bill
shall be paid within 2 days of submission of the bill.

14) Contractor shall have to execute various item of work strictly according to the
order and time schedule approved by the executive engineer. Material will also be
tested as per required frequency of tests.

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15) SUSPENSION OF WORK

Contractor on the written order of the executive engineer/assistant engineer shall

suspend the progress of the works or any part thereof, for such time and in such
manner as may be considered necessary, and during such suspension, shall properly
protect and secure the work as far as necessary in the opinion of the executive
engineer. Nothing extra shall be paid to the contractor if such a suspension is
necessary for proper execution of the work by reason of weather or by some default
of the contractor or necessary for safety of the work or any part thereof.

16) Contractor shall pay all royalties, licence fee, other charges at quarry, octroi
duties, custom duties, toll taxes, trade taxes, labour cess, and any other local taxes
as may be levied. No passes for octroi or toll levied by local bodies on toll bridge
shall be issued by the Corporation. Rates are inclusive of the same, nothing extra
shall be paid due to fluctuations in the cost of materials, machines, bitumen, POL,
labour and shall all type of taxes etc.

17) PAYMENT FOR DAMAGE

No payments will be made to the contractor for damage caused by rains, accidents
or other natural calamities during the progress of work, No claim whatsoever shall
be entertained on this account.

18) DEFIANCE OF INSTRUCTIONS

Constant defiance of instructions of engineer- in charge on part of the contractor or

his authorized agent will make the contract liable to be terminated.

19) TO MEND THE DEFECTS

Contractor shall make good at his own cost and satisfaction of the Corporation all
defects, shrinkages, settlements or other faults which may appear within 12 months
after completion of the work.

20) SUB-LETTING

An un-authorized sub-letting of work shall not be permitted.

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21) EROSION CONTROL
Erosion control measures shall be installed as directed by the engineer. Items and estimated
quantities have been outlined in the miscellaneous items summary.

22) FINAL INSPECTION, ACCEPTANCE AND FINAL PAYMENT

The Engineer will make a final inspection of all work included in the contract, and notify the
Contractor of defects to be remedied prior to final acceptance. The Contractor is required to
provide unconditional waivers of lien from all sub-contractors and suppliers before preparing
a final estimate. Upon satisfactory completion of the work by the Contractor, a final estimate
will be prepared. Payment for all work completed and accepted, less previous payments will
be made within thirty(30) days of final acceptance.

23) DISPUTES
The Engineer’s written decision on any question arising under the contract between the
Owner and Contractor shall be final and binding upon both the Corporation and the
Contractor in the absence of fraud, bad faith, or abuse of discretion.

24) ARBITRATION
All claims, disputes and other matters in question between the Corporation and the Contractor
arising out of, or relating to, the Contract Documents or the breach thereof (except for claims
which have been waived by the making or acceptance of final payment) will be decided by
arbitrator. This agreement so to arbitrate and any other agreement or consent to arbitrate
entered into in accordance herewith will be specifically enforceable under the prevailing laws
of any court having jurisdiction.

No demand for arbitration of any claim, dispute or other matter that is required to be referred
to Engineer initially for decision will be made until the earlier of (a) the date on which
Engineer has rendered a decision or (b) the tenth day after the parties have presented their
evidence to Engineer if a written decision has not been rendered by Engineer before that date.
No demand for arbitration of any such claim, dispute or other matter will be made later than
thirty (30) days after the date on which Engineer has rendered a written decision in respect
thereof; and the failure to demand arbitration within said thirty (30) days' period shall result
in Engineer's decision being final and binding upon Corporation and Contractor. If Engineer
renders a decision after arbitration proceedings have been initiated, such decision may be
entered as evidence but will not supersede the arbitration proceedings, except where the

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decision is acceptable to the parties concerned. No demand for arbitration of any written
decision of Engineer will be made later than ten (10) days after the party making such
demand has delivered written notice of intention to appeal.

No arbitration arising out of or relating to the Contract Documents shall include by

consolidation, joinder or in any other manner any other person or entity who is not a party of
this contract unless:

1. The inclusion of such other person or entity is necessary if complete relief is to be

afforded among those who are already parties to the arbitration;
2. Such other person or entity is substantially involved in a question of law or fact which
is common to those who are already parties to the arbitration and which will arise in
such proceedings, and;
3. The written consent of the other person or entity sought to be included and of
Corporation and Contractor has been obtained for such inclusion, which consent shall
make specific reference to this paragraph; but no such consent shall constitute consent
to arbitration of any dispute not specifically described in such consent or to arbitration
with any party not specifically identified in such consent.

The award rendered by the arbitrators will be final, judgment may be entered upon it in any
court having jurisdiction thereof, and it will not be subject to modification or appeal.

25. This agreement shall be executed in duplicate, the original shall be retained by the
Corporation and the duplicate by the Contractor.

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IN WITNESS WHEREOF the parties have signed these presents and a duplicate thereof, the
day and year first hereinabove written.

Signed and delivered by The Corporation

Signed and deliverd by M/s Ramky Construction Ltd,

WITNESSES;

2.

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