Introduction This article examines how Indian courts interpreted FIDIC forms of contract in 2025. In India, FIDIC forms are used mainly for internationally funded projects. Every year, Indian courts interpret only a few FIDIC contracts. Indian courts’ experience with standard form contracts contributes to the broader jurisprudence on their interpretation.
Background of FIDIC FIDIC (Fédération Internationale des Ingénieurs-Conseils, later known as the International Federation of Consulting Engineers), an organisation established in 1913 , publishes standard forms of contracts for construction projects. It also issues guidance on the use of these contract forms. FIDIC contracts are widely used worldwide, and funding institutions such as the World Bank and the Asian Development Bank often require their use in projects they finance.
FIDIC Contracts in Indian Courts in 2025
Chennai Metro Rail Ltd. v. Transtonnelstroy - Afcons JV, 2025 SCC OnLine Mad 9756
In the Chennai Metro Rail Project, the project authority awarded two contracts for the construction of underground stations. The contracts were design-build, lump-sum, turnkey contracts executed under FIDIC 1995 (Part 1) Edition. The General Conditions of Contract (GCC) were modified by the Conditions of Particular Application (CPA) and supplemented by the Employer’s Requirements relating to price, design, and interface management.
Since the 1995 turnkey, design-and-build FIDIC form is referenced, it is most likely that the FIDIC Conditions of Contract for Design-Build and Turnkey Projects (the “Orange Book”), First Edition (1995), were used. FIDIC describes the Orange Book as a standard form intended primarily for international design-build and turnkey projects, while recognising that, with minor modifications, it is also suitable for domestic contracts .
The Orange Book’s GCC Clause 13.1 (“Contract Price”) did not permit any price increase under sub-clause 13.1(b). The parties replaced this clause with their own provision, designated as CPA Clause 32, which permitted price increases. Similarly, the Orange Book’s Clause 13.16 (“Changes in Legislation”) was replaced by CPA Clause 37. In addition, CPA Clause 13.16.5 provided that, where the price-variation formula under CPA Clause 32 was adopted, no change-in-law claims would be admissible, except in relation to three specified tax-related laws.
The key change in law during the contract period concerned the minor mineral rules of the State of Tamil Nadu. This change made contractors responsible for making payments to the government for the extraction of minor minerals, such as filler material including laterite soil.
Chennai Metro relied on CPA 37 to argue that, once the price variation formula under Clause CPA 32 was adopted, no amounts were payable for costs not covered by that formula, except in respect of changes in three specified categories of taxes. Chennai Metro further contended that Clauses 13.6.2 to 13.6.4 constituted a separate regime applicable where CPA 32 was not adopted. This contention was based on the wording “subject to Sub-Clause 13.6.5 below” in Clause 13.6.2, which, according to Chennai Metro, rendered Clause 13.6.2 subordinate to Clause 13.6.5.
It was undisputed that the price variation mechanism under CPA 32 had been applied. The contractor had received approximately Rs. 130 crores and Rs. 166 crores, respectively, in relation to the two petitions under review.
The Madras High Court set aside the awards, because the arbitral tribunal had rewritten the contract in violation of Section 28(3) of the Arbitration and Conciliation Act, 1996. The Court explained its reasoning as follows:
“32. In the light of the above discussions, this Court holds that the only possible interpretation that can be given to Sub-Clause 13.16.5 is that if the contractor has already claimed the price variation invoking CPA 32, then the contractor cannot claim any additional cost citing the change in law except where the change in law pertains to three taxes. This is the possible and plausible view that can be deduced on a careful reading of Sub-Clauses 13.16.1 to 13.16.5.”
The decision highlights the risks of drafting multiple Particular Conditions that address the same situation, thereby giving rise to competing contractual interpretations. It also clearly illustrates the risks inherent in modifying the General Conditions of Contract.
Karnataka v. B. V. Reddy, 2025 SCC OnLine Kar 23956
This case’s facts do not directly involve a FIDIC contract; however, the Karnataka High Court quoted a FIDIC commentary from another case to explain the meaning of a turnkey contract in India.
“47. Reliance is placed on the judgment of Hon'ble Apex Court in the case of Bata India Limited v. Sri. Sagar Roy, 2014 SCC OnLine Cal 17998, wherein ‘Turn-Key project’ is defined … … FIDIC-An Analysis of International Construction Contracts, it has been stated: “In India the concept of Turn-Key is understood in the same way as it is in most of the other countries. Generally speaking, it relates to that aspect of Construction Contracts where the contractor takes ‘complete responsibility’ for an engineering project. Complete responsibility would include furnishing of all plant, labour, materials, supplies, equipment, transportation, supervision, technical, professional and other services. The contractor is under an obligation to perform all operations relating to design, manufacture, delivery installation and the design and execution of building or engineering works, as contracted.”
**Chennai Metropolitan v. SPML Infra (Mad. HC 2025, 2 JJ ) **
Although this case was not directly a FIDIC related case, the Madras High Court quoted the majority arbitral award, which referred to FIDIC in the following terms:
“The claimant also relied on the FIDIC Conditions of Contract, which provide for compensation where a contractor encounters exceptional physical constraints that were not foreseen at the time of contracting.”
There is no further discussion of FIDIC in the judgment. The contract concerned the laying of a pipeline, including certain underground sections. As a result of a variation involving realignment, the length of the pipeline increased. In addition, the extent of the underground routing also increased. The majority arbitrators granted additional costs to the contractor. In a challenge to the award, a Single Judge, and subsequently the Division Bench, upheld the majority decision.
Conclusion
In 2025, Indian courts had limited engagement with FIDIC contracts. This engagement is likely to increase in the future as the Indian economy becomes more integrated with global capital and international construction industry best practices.
Hasit Seth is a dual qualified attorney in New York and an advocate in India with over 26 years of legal experience. He works as an arbitrator, mediator and as a counsel. Due to his technical background, he sits as an arbitrator in construction and technology disputes often. He is a Senior Fellow (Non-Resident) with the Dhirubhai Ambani University’s School of Law, Gandhinagar.