Indian Railways counterclaims Chinese firm over contract termination dispute

The Dedicated Freight Corridor Corporation of India Limited (DFCCIL) has submitted a counter-claim of Rs 234.25 crore against the China Railway Signalling and Communication (CRSC) Research and Design Institute, which has approached an international law court claiming damages worth Rs 443.77 crore after its contract was terminated two years ago.

The firm had bagged the Rs 471-crore contract for signalling and telecommunication work on the Eastern Dedicated Freight Corridor in 2016, but in 2020, the DFCCIL terminated the contract citing “non-performance”.

An official said, “As per the request for arbitration, the claimant (Chinese firm) had filed a claim of Rs 279 crore in January 2021. The Chinese firm has now submitted its statement of claim (SOC) with a revised claim of Rs 443.77 crore. DFCCIL is submitting the statement of defence today. DFCCIL’s counter-claim is finalised at Rs 234.25 crore (excluding track access charges).”

The officials said that apart from performance issues, the Chinese company had also shown reluctance in furnishing technical documents, as per the contract agreement, such as logic design of electronic interlocking. They also said the company did not have engineers or authorised personnel at the project site which was a serious concern.

The company also failed to have tie-ups with local agencies which harmed the physical progress of the work. The Chinese company has said DFCCIL owes it in lieu of the work already completed by it under the contract, payment for which has not been made. It also alleged violation of contract provisions by DFCCIL.

DFCCIL, in its counterclaim, has raised the issue of recovery of mobilization advance, retention money and balance under the termination clauses apart from the regularisation of forfeiture of the bank guarantee.