Law: Punjab Alternate Dispute Resolution Act, 2019

Section: XVII,2(b)

(a) Punjab Alternate Dispute Resolution Act (XVII of 2019)-------S.2(b)---Alternate Dispute Resolution ("ADR")---Mediation---Object, purpose and scope---Significance of mediation stated---Distinction from arbitration--Cancellation of a contract by the authorities---Accruing of vested right of the contractor after submitting Rs.2.2 billion as performance security---Matter referred to mediation after setting aside the cancellation notice---Facts in brevity where that the petitioner was awarded a contract of a project titled "Developing Resilient Environment and Advancing Municipal Services" and thereafter it fulfilled all legal formalities, submitted performance securities worth over Rs. 2.2 billion, and requested mobilization advances and work commencement orders, however, after four months, termination notices were issued to the petitioner---The petitioner challenged these notices through the present Constitutional petition---Held: Admittedly the contract was awarded to the petitioner and since it had invested a huge amount of more than Rs.2.2. billion in the project, therefore, vested rights had been created in its favour and if the contract was terminated, the petitioner would suffer a huge financial loss---Contract executed between the parties provided amicable settlement by mentioning that both the parties would attempt to settle the dispute amicably before the commencement of arbitration---Then, under clause 21.6 of the contract, any dispute in respect of which the decision of the DAAB had not become final and binding were agreed to be finally settled by international arbitration under the Rules of Arbitration of International Chamber of Commerce--In order to avoid such arbitration, while seeking guidance from the jurisprudence developed on mediation from time to time, High Court deemed it appropriate to refer the matter for mandatory mediation, before the arbitration started---The reasons which make mediation a compelling choice to resolve disputes efficiently and effectively, inter alia, include: (i) Cost-effectiveness; (ii) Time efficiency; (iii) Flexibility; (iv) Confidentiality; (v) Preservation of relationships; (vi) Control over the outcome; (vii)…