Contractual pre-arbitral procedure is directory, and amended claim quantification may proceed in arbitration without restarting dispute steps.

Contractual dispute resolution steps under Clauses 24 and 25 were treated as directory rather than mandatory, because the contract did not clearly make failure to approach the Dispute Review Expert within 14 days fatal to arbitration. The Court accepted that the Engineer's cryptic rejection justified clarification before DRE reference, and Clause 3 of the Special Conditions still permitted arbitration once a dispute arose. It further held that, after a dispute is validly referred to arbitration, a change in the quantified claim does not create a fresh dispute requiring repetition of the pre-arbitral process. The arbitral tribunal could allow amendment of the claim amount.

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Issues: Whether the dispute resolution procedure under Clauses 24 and 25 of the contract was mandatory so as to bar arbitration for failure to approach the DRE within 14 days, and whether a quantified claim already referred to arbitration could be amended before the arbitral tribunal without restarting the contractual pre-arbitral procedure.

Analysis: The petition under Section 34 of the Arbitration and Conciliation Act, 1996 was confined to the objection that the contractor had not strictly followed the contractual route of reference to the Engineer and then to the Dispute Review Expert. The Court held that Clause 24.1 did not prescribe a strict limitation period or create any consequence making the Engineer's decision final and binding merely because a DRE reference was not made within 14 days. The requirement was treated as directory, intended to ensure contemporaneous pursuit of the dispute, and a rigid construction was found unreasonable. The Court also noted that the Engineer had given only a cryptic rejection, making it for the contractor to seek clarification before approaching the DRE. Further, Clause 3 of the Special Conditions permitted arbitration when a dispute arose, independent of the alleged procedural sequence. On the second objection, the Court held that once a dispute has been referred to arbitration, a mere change in the quantum claimed does not amount to a fresh dispute requiring re-invocation of the Engineer/DRE process. The arbitral tribunal retained power under the Act to permit amendment of the claim amount.

Conclusion: The procedural objections were rejected. The contractual pre-arbitral mechanism was not mandatory in the sense contended, and amendment of the quantified claim before the arbitral tribunal was permissible.

Ratio Decidendi: A contractual clause requiring reference to a dispute review mechanism within a stated time is directory, not mandatory, unless the contract clearly makes delay fatal; once a dispute is validly before arbitration, amendment of its quantification does not require the dispute to be restarted through the pre-arbitral procedure.

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