In Haroon Construction, the Punjab provincial government required contractors to deposit additional performance security beyond procurement rules. Contractors challenged this as unlawful and discriminatory. The controversy was litigated and reached up to the Supreme Court.
Held: Procurement-related disputes are better suited for ADR, especially mediation, rather than adversarial litigation. A significant shift was seen as the Court urged a pro-mediation and pro-settlement bias, even in cases involving public procurement, extolling mediation’s ability to produce creative, nonadversarial outcomes.
Court’s Observations:
“Courts must encourage out of court settlements through ADR, in particular mediation, which thrives on win-win solutions and preserves relationships.”
“Courts should not only encourage mediation but also exhibit a pro-settlement and pro-mediation bias.”
“By fostering a pro-settlement bias, courts contribute to a more harmonious and efficient dispute resolution landscape.”
“Mediation, as a form of ADR, has garnered widespread acclaim for its efficiency, cost-effectiveness, and ability to facilitate amicable settlements”