Govt circulates draft scheme for contractual disputes settlement

The Finance Ministry on Wednesday circulated a draft scheme for consultation with stakeholders, which is aimed at bringing quick finality to certain contractual disputes in which the Central government or its agencies is a litigant.

The draft scheme has been framed in accordance with the announcement made by Finance Minister Nirmala Sitharaman in the Union Budget 2023-24.

Sitharaman announced that in order to settle contractual disputes of government and government undertakings, wherein arbitral award is under challenge in a court, a voluntary settlement scheme with standardised terms will be introduced.

This will be done by offering graded settlement terms depending on the pendency level of the dispute.

Official sources said that special efforts are required to clear the backlog of old disputes and litigation.

Such cases are not only holding back fresh investment but are also reducing the ease of doing business with the government.

Therefore, after due study of the past cases, the government aims to bring a one-time settlement scheme called “Vivad se Vishwas II (Contractual Disputes)” to effectively settle pending disputes.

The scheme will apply to disputes where one of the parties is either the Government of India or its following bodies, like all autonomous bodies of the government; public sector banks and public sector financial institutions; all central PSUs; union territories, national capital territory of Delhi and all agencies as well as undertakings.

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