Govt Launches Scheme to Settle Pending Contractual Disputes

The Ministry of Finance has launched a scheme to settle the pending contractual disputes of government and government undertakings with contractors. Under the “Vivad se Vishwas II (Contractual Disputes)” scheme, disputes where the award issued by the Court or Arbitral Tribunal is only for monetary value would be considered. However, settlement through this scheme will not be possible if awards involve specific performance of the contract.

This decision was taken to clear the backlog of pending litigation cases which were responsible for holding back fresh investment, reducing the ease of doing business with the government, etc.

The Office Memorandum dated May 29, 2023, which provides the scheme’s guidelines specifies the implementation date as July 15, 2023, and states that claims under the scheme can be submitted by October 31, 2023.

As per the scheme, the settlement award offered to the contractor would be up to 85% of the net amount awarded by the Court, in case of awards passed by the Court on or before April 30, 2023. In case of arbitral awards passed on or before January 31, 2023, the settlement amount offered would be up to 65% of the net amount awarded.

For the implementation of this scheme, a dedicated webpage has been developed by the Government e-Marketplace (GeM) and all claims would be processed exclusively through this portal. Regarding non-GeM contracts of the Ministry of Railways, contractors may register their claims on the Indian Railways E-Procurement System (IREPS) platform.