Vivad se Vishwas scheme for settlement of disputes in government contracts will start from July 15

The Finance Ministry on Monday said the scheme for settlement of pending disputes related to government contracts under Vivad Se Vishwas Do will begin from July 15 and contractors will have time till October 31 to submit their claims. The Vivad Se Vishwas Do (Contract Related Disputes) scheme was announced in the budget for 2023-24 to settle pending disputes related to government contracts. Under the scheme, settlement amount will be offered to the contractors based on the status of the dispute.

As per the scheme announced by the Department of Expenditure, in cases where a court or arbitration order has been passed, the settlement amount will be 85 percent or 65 percent of the amount decided by the court or arbitral tribunal, respectively. In the draft scheme, the Department of Expenditure had proposed that the settlement amount would be 80 per cent in case of court orders and 60 per cent in case of arbitration awards. The Department of Expenditure has modified the final plan after getting the views of the stakeholders. An office memorandum from DOE said that the scheme will start from July 15, 2023 and claims can be submitted till October 31, 2023.

Apart from ministries and government departments, the scheme will be applicable to autonomous bodies, public sector banks and enterprises and all those organizations like Metro Rail Corporation, where the Government of India has 50 per cent stake. The scheme will cover cases in which court orders have been passed by April 30, 2023 and arbitration awards have been passed by January 30, 2023. It has been said that this scheme will be applicable on all types of purchases.

It involves the purchase of goods, services and works. The scheme also applies to all ‘earning contracts’ (i.e. contracts where the government receives money in exchange for goods, services, rights). Also, contracts under the Public Private Partnership (PPP) arrangement also come under this. Under the scheme, it will be mandatory for the government departments to accept the settlement if the claim amount is Rs 500 crore or less. If the claim amount by the contractor exceeds Rs 500 crore, the procuring entities will have the option of not accepting the settlement request. The Vivad se Vishwas Do scheme aims to eliminate pending litigation, release stranded funds and improve the ease of doing business.

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