Disputes survive even after payment

A contractor might accept payment for the work done for the employer, but it does not mean that all disputes between them had ended. If the contractor does not sign the final bill, he would not get even the payment admitted by the employer. However, the Delhi High Court has stated that even if he signs the usual clause of “full and final settlement” in his anxiety to get the payment, he can invoke arbitration on the disputed issues. The court stated so in its judgment in Union of India vs Baga Brothers. After the work done for the Supreme Court, the contractor accepted the bill prepared by the government. Then he invoked arbitration according to the contract. The award was in his favour. The government moved the high court arguing that he had accepted the bill prepared by it. It further argued that the first step in disputes is conciliation and only if it fails arbitration can be resorted to. The court rejected both arguments. It pointed out that the bill was prepared by the government and not agreed to by the contractor. Therefore, the disputes survived. Secondly, conciliation is not mandatory under the Arbitration and Conciliation Act. There are procedures for conciliation and mutual discussion to resolve differences but that does not prevent an aggrieved party from seeking arbitration, the high court stated.