What Is the Most Important Evidence in a FIDIC Delay Claim in India? The Extension of Time Correspondence

Authored by R & D Law Chambers LLP Ravish Bhatt  |  Advocate, Bar Council of Gujarat (G/504/2008)  |  Dual-qualified lawyer (India and England & Wales)  |  ADIT, CIOT, London  |  SRA (non-practising) Registration No. 492 477 Published: 4 October 2026  |  Last reviewed: 4 October 2026

 

This note states Indian law, chiefly sections 55 and 74 of the Indian Contract Act, 1872, as it applies to a FIDIC-based contract governed by Indian law. FIDIC forms are licensed documents: clause content is described from published specialist commentary on the 2017 Second Edition, and the contract the parties signed, including its Particular Conditions, governs. We advise on Indian law only.

 

The extension of time correspondence. A critical path analysis proves how long the delay was. Under section 55 of the Indian Contract Act, 1872, the papers exchanged at each extension decide whether anyone recovers money for it. A contractor that accepts late performance without notice of its claim loses compensation, and an employer that extends time without reserving liquidated damages may lose them.

 

Index of Topics

1. What an Indian tribunal decides in a delay claim
2. How long: the programme and the critical path
3. Who caused it: the prevention principle
4. Concurrent delay: where the contract must speak
5. Section 55, and why time is rarely of the essence
6. The contractor’s side: notice at the time of acceptance
7. The employer’s side: extensions and liquidated damages
8. Money for delay: what Unibros requires

1. What an Indian tribunal decides in a delay claim

Three questions. Was completion delayed, and by how much? Who caused the delay? Did the party now claiming money preserve its right when time was extended? FIDIC supplies the procedure for the first two. Section 55 of the Indian Contract Act, 1872 decides the third, and it is the one most delay files cannot answer.

 

Under a FIDIC contract governed by Indian law, the form supplies the machinery: a programme, extensions of time for listed causes, a claims procedure and delay damages. Indian law supplies the consequences: whether time was of the essence, what an extension does to liquidated damages, and whether a party that accepted late performance kept its right to compensation.

The Supreme Court’s latest statement of what a contractor must prove is in M/s Unibros v All India Radio, 2023 INSC 931, decided on 19 October 2023. Paragraph 19 sets four conditions for loss of profit caused by delay: a delay in completion; that the delay is not attributable to the claimant; the claimant’s status as an established contractor handling substantial projects; and credible evidence of the loss. Every one of them is an evidence question.

2. How long: the programme and the critical path

Sub-Clause 8.5 of the FIDIC 2017 forms gives an extension of time where completion is delayed by one of the causes it lists. Delay to an activity that does not delay completion earns nothing. Proving delay to completion requires programmes showing the critical path before and after each event.

 

The reference most tribunals see is the Society of Construction Law’s Delay and Disruption Protocol, second edition, February 2017. It has no force of law unless the contract adopts it, but it prefers analysis made at the time to analysis made for the arbitration, and it lists the records a delay analysis needs. The programme submitted to the Engineer under Sub-Clause 8.3 during the works is the baseline against which every later analysis is tested.

That analysis answers how long, not who pays. A tribunal can accept it in full and still award nothing for prolongation or liquidated damages, because the right to money is decided elsewhere.

3. Who caused it: the prevention principle

An employer that prevented completion cannot recover liquidated damages for the resulting delay. The Supreme Court stated the principle in Welspun Specialty Solutions v ONGC, decided on 13 November 2021, while recognising that the express terms of the contract may modify it.

 

In Welspun Specialty Solutions Limited v Oil and Natural Gas Corporation Limited, Civil Appeal Nos. 2826 to 2827 of 2016, the Court set out at paragraph 34 three basic principles for time-conditioned obligations: the promisor must complete by the stated date; the promisee is not entitled to liquidated damages if by its own acts or omissions it prevented completion by that date; and both may be amended by the express terms of the contract.

Unibros states the same requirement from the contractor’s side: the delay must not be attributable to the claimant. Each delay event therefore needs an owner, fixed by records made at the time: late site access, drawings, instructions or payment on one side; resources and procurement on the other. In Unibros the delay was accepted as the employer’s, and the claim failed on the fourth condition alone.

4. Concurrent delay: where the contract must speak

Under Sub-Clause 8.5 of the FIDIC 2017 forms, where employer delay is concurrent with contractor delay, the extension is assessed under the rules in the Special Provisions or, if none are stated, as appropriate taking due regard of all relevant circumstances. Silence leaves the rule to the tribunal.

 

The Indian Contract Act, 1872 contains no apportionment rule for concurrent delay, and none of the Supreme Court decisions relied on in this note lays one down. The Special Provisions are therefore the only place an Indian-law FIDIC contract can fix one in advance. A party that negotiates them has chosen its rule; a party that does not has left the choice to the tribunal. Where two causes run together, the tribunal follows the party whose records show which activity each actually held up.

5. Section 55, and why time is rarely of the essence

If time is of the essence, failure makes the contract voidable. If it is not, the innocent party is entitled to compensation for its loss. And a party that accepts late performance cannot claim compensation unless it gives notice of its intention at the time of acceptance. Those are the three paragraphs of section 55.

 

In Welspun the purchase orders said in terms that time was of the essence. The arbitral tribunal held it was not, because the contract provided for extensions and liquidated damages and time had in fact been extended. The Supreme Court held that conclusion to be in accordance with the rules of contractual interpretation (paragraph 32), and said that extension and liquidated damages provisions are good indicators that time is not of the essence (paragraph 42).

Clause 8 of a FIDIC form contains both. The dispute then turns on the second and third paragraphs of section 55: compensation for loss occasioned by the delay, and the notice that preserves it when late performance is accepted. On a construction project that moment usually comes when an extension is sought, granted or accepted, which is why the extension correspondence carries the weight.

6. The contractor’s side: notice at the time of acceptance

A contractor that accepts belated performance of the employer’s obligations, instead of avoiding the contract, cannot claim compensation for the delay unless it gave notice at the time of acceptance. The Supreme Court so held in State of Kerala v M.A. Mathai, decided on 9 April 2007.

 

In State of Kerala v M.A. Mathai, Civil Appeal No. 7333 of 2004, [2007] 4 SCR 995, the contractor finished in extended time under supplemental agreements and then sued for damages. Setting aside the decree, the Court at paragraph 8 applied the third paragraph of section 55 to the contractor and adopted the statement in General Manager, Northern Railway v Sarvesh Chopra, (2002) 4 SCC 45, that a delay claim remains entertainable, even under a contract barring it, in three situations: the contractor repudiates under section 55; the employer extends time by a supplemental agreement or makes clear that escalation or compensation will be permissible; or the contractor makes clear that compensation must be paid and the employer accepts performance despite that notice.

Each situation is a document. A contractor whose extension requests ask only for time, and say nothing about cost, has written the employer’s defence. The notice of claim under Sub-Clause 20.2 of the FIDIC 2017 forms, due within 28 days of awareness, is a separate contractual step. Whether a particular notice of claim also serves as notice under section 55 depends on what it says and when it was given, so the reservation should be stated in terms.

7. The employer’s side: extensions and liquidated damages

An employer that extends time without reserving liquidated damages risks losing them. In Welspun, ONGC granted two extensions without liquidated damages and five with them; the tribunal held they could not be reimposed without clear terms, and the Supreme Court upheld that view.

 

The purchase orders in Welspun provided that an extension would be without prejudice to damages unless the purchaser waived them in writing. ONGC’s first two extensions were expressly without liquidated damages. The tribunal held that once waived, liquidated damages could not be coupled with later extensions unless a clear intention flowed from the contract, and awarded ONGC its proven actual loss under the second paragraph of section 55 instead. The Supreme Court upheld the award (paragraphs 40 and 42).

The Court distinguished ONGC v Saw Pipes Limited, (2003) 5 SCC 705, because the extension there was granted on the specific condition that agreed damages would be recovered (paragraph 39). The extension letters made the difference. Quantum under section 74 is a separate question.

The delay file: who needs which document

Party	Document	What it decides	Authority
Contractor	Notice reserving compensation when late performance is accepted	Whether delay costs are recoverable at all	Section 55, third paragraph; M.A. Mathai (2007)
Contractor	Extension request stating cost as well as time	Brings the claim within the Sarvesh Chopra situations	Sarvesh Chopra (2002), adopted in M.A. Mathai
Contractor	Contemporaneous programmes and progress records	How long, and on what critical path	FIDIC 2017 Sub-Clauses 8.3 and 8.5; SCL Protocol (2017)
Contractor	Evidence of other work lost or declined	Loss of profit	Unibros (2023), paragraphs 17 and 19
Employer	Extension letter reserving liquidated damages	Whether liquidated damages survive the extension	Welspun (2021), paragraphs 39 to 42
Employer	Records of contractor-caused delay	Whether the prevention principle bars liquidated damages	Welspun (2021), paragraph 34

 

8. Money for delay: what Unibros requires

Proof of loss, not a formula. Unibros requires credible evidence of the loss of profitability and names the kinds that may serve: other projects in the pipeline, tenders declined because of the prolongation, financial statements, and the contract’s clauses on delays, extensions of time and compensation.

 

What Unibros requires as proof of loss, and why a formula such as Hudson’s cannot supply it, is explained in FIDIC variation claims and the documents that prove them.

The order of proof is the reverse of the order in which most files are assembled. First, the documents that preserved the right to money at each extension. Second, the attribution of each delay event. Third, the programme analysis of how long. Fourth, the evidence of loss. A file built the other way round has the weight in the wrong place.

Frequently Asked Questions

What is the most important evidence in a FIDIC delay claim in India?

The extension of time correspondence, read with a critical path programme. Under section 55 of the Indian Contract Act, 1872, a contractor that accepts late performance without notice of its claim loses compensation, as held in State of Kerala v M.A. Mathai, and an employer that extends time without reserving liquidated damages may lose them, as in Welspun v ONGC.

Does granting an extension of time waive liquidated damages?

Not automatically, but it can. In Welspun Specialty Solutions v ONGC, decided on 13 November 2021, ONGC’s first two extensions waived liquidated damages, and the Supreme Court upheld a finding that they could not be reimposed on later extensions without clear terms. In ONGC v Saw Pipes the extension was expressly conditional on recovery of damages.

Can a contractor claim delay costs after accepting an extension of time?

Only if the right was preserved. In State of Kerala v M.A. Mathai the Supreme Court held that a contractor accepting belated performance by the employer cannot claim compensation unless it gave notice at the time of acceptance, and adopted three situations from Sarvesh Chopra: repudiation, an extension permitting compensation, or the contractor’s notice putting the employer on terms.

Is time of the essence in a FIDIC contract under Indian law?

Not merely because the contract says so. In Welspun v ONGC the Supreme Court held that the question is decided on the whole contract and the circumstances, and that extension procedures and liquidated damages clauses are good indicators that time is not of the essence. FIDIC forms contain both.

How does FIDIC 2017 deal with concurrent delay?

Sub-Clause 8.5 provides that where employer delay is concurrent with contractor delay, the extension is assessed under the rules in the Special Provisions or, if none are stated, as appropriate taking due regard of all relevant circumstances. The Indian Contract Act, 1872 contains no apportionment rule, so the Special Provisions are where one can be fixed.

Is an expert delay analysis enough to win a delay claim in India?

No. It answers how long the delay was. Unibros v All India Radio, 2023 INSC 931, also requires that the delay is not attributable to the claimant and credible evidence of loss, and section 55 decides whether the right to compensation survived each extension. The Society of Construction Law Protocol has no force of law unless the contract adopts it.

How R & D Law Chambers Works on These Matters

R & D Law Chambers LLP is an Ahmedabad law firm. We advise on Indian law only, for businesses anywhere, wherever a matter has an India connection.

The firm advises employers and contractors on extensions of time, delay and liquidated damages under FIDIC-based and bespoke EPC contracts governed by Indian law, from the correspondence during the works to claims, arbitration and challenges under section 34 of the Arbitration and Conciliation Act, 1996. That work sits within the firm’s EPC contract advisory and dispute resolution practice.

Related services

• EPC Contract Lawyers: Advisory and Dispute Resolution Across India: drafting, notices and disputes on EPC contracts.
• International EPC Advisory: FIDIC forms, Particular Conditions and cross-border disputes.
• Contract Drafting: extension, delay damages and notice clauses.
• FIDIC variation claims and the documents that prove them: the variation side of the same contract file.
• Change in law under EPC and FIDIC contracts in India: the Madras High Court decision and its consequence for time and money.

This article is for information only and is not legal advice. It states the position as at 4 October 2026.