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Wednesday, May 26, 2021

Litigation in public contracts: some estimates from court data

by Devendra Damle, Karan Gulati, Anjali Sharma and Bhargavi Zaveri.


Public contracts are contracts executed by the government and its agencies to procure goods, services and works. Public contracts in India are perceived to be litigation prone. There is evidence that more than half the road projects awarded by the government of India were the subject matter of litigation before the courts and arbitration tribunals, and that a significantly large value of infrastructure projects are stuck in litigation for prolonged periods. This article seeks to estimate and understand the volume and nature of litigation relating to public contracts by observing litigation in one high court in India.

Understanding the volume, value and nature of litigation arising in public contracts is critical. First, the government is an active procurer of goods, services and works in several large sectors such as natural resources and infrastructure. The state's litigation propensity in contracts is a key factor in the ease of doing business in such sectors. Second, the propensity of each government department and agency, such as the union, states, urban local bodies, CPSEs and SPSEs, to engage in litigation may vary. Assessing the litigation propensity of different government departments and agencies helps contractual counterparties assess the costs of dealing with them. Third, estimating the volume, value, costs and outcomes of government litigation helps understand its impact on the exchequer. It can serve as a useful feedback loop in planning the litigation policy of the government and its agencies.

Our analysis suggests that the government is a counterparty to more than half the civil commercial litigation in the Delhi High Court. However, a small proportion of this litigation can be linked to disputes in public contracts. Second, we find that the government is not a major initiator of, but is a large defender in litigation involving public contracts. However, more than 50% of the cases filed by the government against businesses are of one type, namely, challenges to arbitration awards passed in disputes arising in public contracts. Finally, we find that businesses are not using the standard legal remedy of suits for enforcing contractual claims against the government or its agencies. This suggests that most of this litigation is related to the pre-award stages of the business-government engagement. This could also be attributed to the procedural simplicity of proving claims in writ petitions and the relatively quicker duration within which they get disposed.

The popular discourse on government litigation has focused on the volume and pendency of the litigation to which the government or its agencies are a counterparty. Our findings, although limited to observations to the Delhi High Court, provide a foundation for drawing up data-backed country-level estimates of the government's propensity to litigate, and the time, costs and court capacity consumed in litigation relating to public contracts.

Data and approach

For our analysis, we start with a dataset of cases filed before the Delhi High Court from 1st January 2007 until 30th September 2020 ("study period"). We select the Delhi High Court for our analysis for two reasons. First, the Delhi High Court is one of the five High Courts in India exercising original jurisdiction over contractual disputes. All High Courts in India, except these five, exercise appellate jurisdiction. This means that they restrict themselves to reviewing the lower courts' orders. The Delhi High Court is the first level dispute redressal forum for disputes within its territorial jurisdiction in commercial contracts exceeding Rs. 2 crores. The second reason is the physical proximity of the Delhi High Court to the central government and its agencies.

The objective of our analysis is to understand litigation in public contracts. The Delhi High Court classifies case-types into 288 categories. During the study period, 5,42,355 cases have been filed before the Delhi High Court across these categories. These categories cover every type of case that the court deals with, ranging from admiralty cases to family disputes. We undertake three rounds of data filtering to arrive at a subset of cases that are the closest proxies of contractual disputes involving the government.

Filtering out cases not involving contractual disputes with the government

In the first instance, we filter out all the case-types which are not related to contracts. For instance, we filter out bail and criminal applications, testamentary and tax matters and matters under the Companies Act and contempt petitions. We filter out all appellate matters and references from lower courts. We filter out cases where either of the parties is unknown or the data is not machine-readable. This gives us a dataset of 2.2 lakh civil cases filed in the study period. Of these, 1,37,734 cases (about 62%) have the government or its agencies as a counterparty (Table 1). This dataset includes completed as well as pending cases. 81% of the cases in our dataset are disposed of.

Table 1: Cases in our data to which the state or its agency is a counterparty
Sr.No. Party-type As Petitioner As respondent Total (% of government cases)

1. Union of India 8020 58,184 66,204 (48.06)
2. State Government 2443 31,539 33,982 (24.62)
3. Municipal bodies/panchayats 2174 16,121 18,295 (13.28)
4. CPSEs 3908 9021 12,119 (8.79)
5. SPSEs 1161 3427 4,588 (3.33)
6. Court 171 833 1,004 (0.72)
7. Constitutional bodies 189 543 732 (0.53)

Total 18,066 1,19,668 1,37,734 (100)

Constitutional bodies in Table 1 refer to constitutional authorities, such as the Comptroller and Auditor and General of India. The Union of India includes the government of India, statutory authorities set up under a central law such as the National Highways Authority of India (NHAI), and statutory regulators such as SEBI and TRAI. Table 1 demonstrates that a bulk of the civil commercial litigation in the Delhi High Court has the government as a counterparty. It also shows that while the state is not responsible for initiating large amounts of civil commercial litigation, the state and its agencies constitute the largest respondent in such litigation.

We classify the Government-cases in Table 1 into five categories: civil writ petition, civil suits (original side and commercial), miscellaneous petitions (original and civil misc main), arbitration petitions and applications and land acquisition-related disputes (Table 2).

Table 2: Types of government related cases in our data
Sr.No. Civil writ petitions Govt. as Petitioner Govt. as respondent Total (% of government cases)

1. Writ petitions 10,476 1,06,179 1,16,655 (84.69)
2. Miscellaneous petitions 3,493 5,168 8,661 (6.28)
3. Land Acquisition related cases 3,180 3,663 6,843 (4.9)
4. Arbitration petitions and applications 221 2,837 3,058 (2.54)
5. Civil suits 696 1,818 2,514 (1.8)

Total 18,066 1,19,668 1,37,734 (100)

Table 2 shows that civil writ petitions constitute the bulk of the cases involving the government and its agencies. Writ petitions are, by design, cases filed against the government or its agencies for the violation of fundamental rights and not contracts. However, anecdotally, we know that contractual claims against the government and its agencies are often agitated through civil writ petitions. Hence, we retain civil writ petitions for our analysis.


While the government is a counterparty to 1.4 lakh or 60% of the civil commercial cases in our data-set, a bulk of these cases are by and against individuals and other types of entities such as trade unions or political parties. These disputes would therefore largely pertain to employment matters such as unfair dismissals, denial of promotion in government service or pension and evictions from public premises. The objective of our study is to understand the litigation arising out of public contracts.


For our study, we characterise only cases filed by or against businesses (body corporates incorporated as private or public limited companies) as public contracts-related litigation. This is because our data covers public contracts whose value exceeds Rs. 2 crores. Public contracts exceeding this threshold value are awarded through a tender process. The condition that a bidder for public contracts should be incorporated as a company is commonly found in government tender documents.

In the sub-set of writ petitions, we retain writ petitions between businesses and a sub-set of government agencies, such as CPSEs (except banks) and SPSEs, and statutory agencies that are engaged in procurement, such as the National Highways Authority of India (NHAI), Airports Authority of India (AAI), the Delhi Metro Rail Corporation (DMRC) and the National Buildings Construction Corporation Limited (NBCC) in our data.

We exclude writ petitions filed against government owned banks as they largely pertain to debt restructuring and not procurement-related disputes. We also exclude the writ petitions filed by businesses against the government of India, constitutional authorities and State Governments from our analysis as a large percentage of them pertain to tax matters, constitutional challenges to laws enacted by the Parliament and state legislatures respectively, and executive actions, such as notifications and circulars issued by the government and state governments respectively. Similarly, a review of a sample of writ petitions filed by businesses against municipal bodies and panchayats suggests that they largely pertain to matters involving eviction from public premises and violations of licensing norms governing commercial establishments operated by such businesses. We also exclude land acquisition-related matters as they are largely challenges to notifications issued by the government notifying land parcels for compulsory acquisition and other actions undertaken by the government under the land acquisition laws.

This exercise of filtering may exclude some contractual disputes between the government and its contractors or vendors. Our findings are therefore based on a conservative estimate of the volume of litigation in public contracts.

This filtering exercise generates a subset of 9,313 cases between businesses and the government and its agencies (Table 3). We use this subset of cases as a proxy for litigation between the government and businesses in connection with public contracts. Table 3 suggests that such litigation is a small proportion (about 7%) of the overall litigation involving the government. Further, the state is not a major initiator of such litigation. Businesses initiate the bulk of the government-business contractual litigation. The CPSEs account for nearly half of such litigation in the Delhi High Court. This suggests that while CPSEs are a small contributor to the overall commercial litigation involving the government (as shown in Table 1), they are a large contributor to the litigation involving public contracts. The central government and several states have issued policies to manage and curb litigation by the government and its agencies ( example, example and example). These policies have largely taken a top-down approach towards minimising litigation at the level of the union and state governments. Our assessment suggests that there is potential for the government to explore the incentive structures at the level of the departments within the Union government and CPSEs that drive litigation arising from public contracts.

Table 3: Cases between government and businesses
Business as Petitioner Business as Respondent Total (% share)

CPSE 3,329 1,223 4,552 (48.87)
Union 2,027 885 2,912 (30.26)
State 711 249 960 (10.30)
Panchayat/Urban local body 412 124 536 (5.75)
SPSE 239 111 350 (3.75)
Autonomous constitutional 3 0 3 (0.03)

Total (% share) 6,721 (72.16) 2,592 (27.83) 9,313 (100.0)

Case types

Table 4 shows that the bulk of the government initiated litigation is in the 'original miscellaneous petitions' (OMPs) category. Conversations with practitioners and support staff of the judges in the Delhi High Court suggest that as large as 70% of the cases filed as OMPs in the Delhi High court involve challenges to the enforcement of arbitration awards. We also reviewed a small sample of OMPs, which confirmed this perception. Arbitration petitions and applications account for the second-largest type of cases involving the government and businesses. These petitions are generally filed for directions from the court for the appointment of an arbitrator where either party to the dispute fails to appoint one, interim relief during arbitration proceedings and extension of timelines for conducting the arbitration. The high proportion of 'OMPs' and 'arbitration' cases in our data suggests that a significant proportion of government-business contractual litigation is getting resolved by arbitration.

We also find that a bulk of the writ petitions filed by businesses in our dataset (a little more than 84%) are against CPSEs. This pattern holds over the entire window of observation. We estimate that these writ petitions could pertain to disputes in two areas of public procurement. They may pertain to violation by CPSEs of procurement norms in the tendering phase of public procurement. The second possibility is that they could pertain to disputes in the post-award stage, such as delayed payments or other wrongful acts during the term of the contract. This is problematic because writ petitions are a remedy for the enforcement of fundamental rights against the government. Courts have repeatedly denied purely contractual claims against the government through the remedy of writ petitions. However, if the writ petitions against CPSEs indeed pertain to disputes arising post the tender award, it suggests that businesses find it efficient to agitate contractual claims through writ petitions. This may indicate a judicial tendency to prioritise writ petitions over other matters. This could also be attributed to the relatively lower threshold for proving claims in writ petitions.

Table 4: Government to business (G2B) and Business to government (B2G) commercial litigation
WP CS OMP Arbitration Others Total

G2B 69 276 1938 152 157 2,592
B2G 932 895 2704 1973 217 6,721

Total 1,001 1,171 4,642 2,124 3749,313

Time taken

Approximately 1.7 lakh of the 2.2 lakh cases in our dataset are disposed cases. We find that the average disposal period for a case in our data is about one year from its institution. For this subset of disposed cases, we calculate the average duration for disposal in years based on the year of institution to the year of disposal (Table 5). The average duration for the disposal of writ petitions is lower than that for civil suits and lower than the overall average. This reinforces the notion that counterparties to government contracts may be enforcing their contractual claims through writ petitions.

Table 5: Average duration for disposal (by case-type)

Case-type Average time for disposal (in years)

Writ petitions (civil) 0.81
Civil suits (original)* 2.30
Civil suits (commercial bench)** 1.01
Miscellaneous petition 1.17
Arbitration petitions, applications, etc.0.56

Overall 0.98

*Suits disposed of by a regular bench of the court.
**Suits disposed of by the commercial division of the High Court set up under the Commercial Courts Act, 2015.

Table 6 shows the number of years for the disposal of cases in the overall data, cases to which the government is a party, and other cases. Table 6 suggests that a bulk of the commercial cases are disposed of by the Delhi High Court within two years from the date of their institution. We also find that a significantly higher number of commercial cases involving the government are disposed of within a year compared to the other cases. This is contrary to the popular perception that delays prolong government litigation. This does not appear to the case for commercial litigation involving the government. In fact, we find that commercial cases involving the government as a respondent and those not involving the government require, on average, the same number of hearings by the court before their disposal. This suggests that a commercial case involving the government does not, on average, consume more resources of the court than regular cases.

Table 6: Duration of disposed cases (party-wise)
Number of cases (% share)

Duration (years) Overall Govt and businesses Business and non-govt party

Less than 1 95,962 (54.01) 13,867 (57.75) 19,724 (43.74)
[1, 2) 42,931 (24.16) 5,618 (23.4) 13,521 (29.98)
[2, 3) 17,064 (9.6) 1,902 (7.92) 4,901 (10.87)
[3, 4) 9,475 (5.33) 1,011 (4.21) 2,716 (6.02)
[4, 5) 4,682 (2.64) 467 (1.94) 1,414 (3.14)
[5, 10) 6,807 (3.83) 993 (4.14) 2,576 (5.71)
Greater than 10 745 (0.42) 153 (0.64) 246 (0.55)

Total 1,77,666 (100) 24,011 (100) 45,098 (100)


Our findings are limited to our observations on the government litigation in the Delhi High Court.

Some of these observations confirm pre-conceived notions of litigation between the state and businesses in India. For example, data from the Delhi High Court demonstrates that so far as concerns civil commercial cases, the government is a party to more than the popularly cited 46% of the cases in courts. However, very little of this litigation is attributable to public contracts between business and the state. Similarly, the usage of writ petitions to enforce contractual claims against the state is documented to some extent in court judgements. Our data demonstrates a high proportion of writ petitions linked to the enforcement of public contracts. This may be partly attributable to the nature of the claim involved and the relatively higher average duration for the disposal of suits. Some of our findings help dispel some pre-conceived notions. For example, the widely held perception that the government prolongs litigation is not true of commercial cases adjudicated before the Delhi High Court, as shown by the average number of hearings taken for commercial cases involving the government and those not involving the government. This may also be reflective of the capacity of the Delhi High Court itself.

A quantitative assessment of the government's litigation is important for identifying the precise bottlenecks that lead to the government being sued and designing a litigation policy that responds to these considerations. Data backed assessments of the litigation load of the government holds important insights into the costs of doing business with the government and the resources required within the state and in courts to deal with such litigation. This work provides a foundational understanding of commercial litigation involving the government in India. Better and deeper country-level insights can be obtained by expanding the assessment to more courts and potentially undertaking a textual analysis of the final orders in such litigation to identify aspects such as the success ratio and litigation costs.

Bhargavi Zaveri is a researcher at xKDR- Chennai Mathematical Institute. Devendra Damle and Karan Gulati are researchers at the National Institute of Public Finance and Policy. Anjali Sharma is at National eGovernance Services Limited.

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