How to Trump a ‘No Claims Certificate’ in Arbitration

Abstract

In construction contracts, employers generally insist on submission of ‘no due/certificate’ claims signed by the contractors, as pre-condition to release paymentsdue under the final bill. To secure the full amount, contractors generally send anarbitration invocation notice setting out their claims (or in cases where there is noarbitration clause, a legal notice) to the employers, in defiance of any such settlementcertificate/voucher. When the employers contend that the dispute is not ‘arbitrable’on account of discharge of the contract in terms of the No Dues/Claims Certificate,the contractors refute it by stating that any such settlement certificate/voucher wasobtained by fraud, coercion or undue influence and that there was absence of freeconsent. The article will analyse the Indian law on validity of such no duescertificates/settlement certificates/discharge vouchers in construction contracts andthe possible course of action that contractors may adopt to contest claims, despitesuch certificates.