Government launches a one-time settlement Scheme Vivad se Vishwas – II (Contractual Disputes)

The Ministry of Finance‘s Department of Expenditure has introduced the initiative “Vivad se Vishwas II – (Contractual Disputes)” to efficiently settle ongoing contractual disputes between the government and government companies. The initiative was introduced by the Union Finance Minister in the Union Budget 2023-24.

In Para 67 of the Union Budget speech, Union Finance Minister and Corporate Affairs Smt. Nirmala Sitharaman had announced:-

“To settle contractual disputes of government and government undertakings, wherein arbitral award is under challenge in a court, a voluntary settlement scheme with standardized terms will be introduced. This will be done offering graded settlement terms depending on pendency level of the disputes.”

The Ministry of Finance’s Department of Expenditure published an order on May 29, 2023, outlining the scheme’s precise parameters. The deadline for filing claims is October 31, 2023.

Cases satisfying the following criteria will be eligible for settlement under this scheme:

The programme will apply to all domestic contractual disputes in which one of the parties is the Government of India or an institution controlled by it.

Under the plan, the settlement amount provided to the Contractor for Court Awards passed on or before 30.04.2023 will be up to 85% of the net amount awarded/upheld by the court.

For Arbitral Awards issued on or before January 31, 2023, the settlement amount provided is up to 65% of the net sum awarded.

The Government e-Marketplace (GeM) has created a dedicated web portal for the execution of this plan. Only GeM will process eligible claims. Contractors may lodge their claims on IREPS for non-GeM Ministry of Railways contracts.

The scheme’s information are available on the Ministry of Finance’s Department of Expenditure’s website.