The Department of Expenditure, Ministry of Finance, has launched the “Vivad se Vishwas-2” scheme to provide a much-needed boost to the resolution of contractual disputes involving the government and government undertakings. The scheme aims to promote ease of doing business and will cover disputes up to 30 September 2022.
Finance Minister Nirmala Sitharaman had announced in the budget the introduction of a voluntary settlement scheme with standardized terms to settle contractual disputes involving the government and government undertakings, where an arbitral award is under legal challenge. The scheme offers graded settlement terms based on the pendency level of the dispute.
To ensure the seamless implementation of the scheme, the Department of Expenditure issued detailed guidelines on 29 May 2023. The deadline for submitting claims under the scheme is 31 October 2023.
The “Vivad se Vishwas-2 (Contractual Disputes)” scheme will apply to all domestic contractual disputes where one of the parties is either the Government of India or an organization operating under its control.
Under the scheme, for court awards passed on or before 30 April 2023, contractors will be offered settlement amounts up to 85% of the net amount awarded or upheld by the court. Similarly, for arbitral awards passed on or before 31 January 2023, the settlement amount offered will be up to 65% of the net amount awarded.
To facilitate a smooth and transparent process, the government e-marketplace (GeM) has created a dedicated web-page for the implementation of the scheme. Eligible claims will be processed exclusively through the GeM platform, streamlining the settlement process and ensuring expeditious resolution.
For contractors dealing with non-GeM contracts of the Ministry of Railways, they may register their claims on the IREPS platform (www.ireps.gov.in).
The introduction of the “Vivad se Vishwas-2” scheme is expected to provide a significant impetus to the resolution of contractual disputes and promote a conducive business environment in the country.
