The Government of India has introduced the “Vivad se Vishwas II – (Contractual Disputes)” scheme to effectively resolve pending contractual disputes involving government and government undertakings. The scheme was announced by the Union Finance Minister, Smt. Nirmala Sitharaman, in the Union Budget 2023-24. It aims to provide a voluntary settlement option with standardized terms for disputes where arbitral awards are under challenge in courts.

Settlement Deadline: Contractors and concerned parties have until 31st October 2023 to submit their claims under the scheme.

Eligibility Criteria: The scheme is applicable to domestic contractual disputes involving the Government of India or organizations under its control. Disputes with arbitral awards issued up to 31st January 2023 and court awards passed up to 30th April 2023 are eligible for settlement.

Settlement Offers: Under the Vivad se Vishwas II scheme, contractors will be offered settlement amounts based on the net amount awarded or upheld by the court. For court awards passed on or before 30th April 2023, the settlement amount can go up to 85% of the net amount. For arbitral awards passed on or before 31st January 2023, the settlement amount can go up to 65% of the net amount awarded.

Claim Processing: The Government e-Marketplace (GeM) has created a dedicated web-page for implementing the scheme. Eligible claims will be processed exclusively through GeM. Contractors working with the Ministry of Railways can register their claims on IREPS (www.ireps.gov.in) for non-GeM contracts.

Conclusion: The Vivad se Vishwas II scheme marks a significant step by the Government to expedite the resolution of contractual disputes. It provides an opportunity for parties involved in disputes to settle the matters in a time-bound and efficient manner. Contractors and organizations should take advantage of this scheme to clear their pending disputes and bring about faster resolutions. All details and guidelines for the scheme are available on the website of the Ministry of Finance, Department of Expenditure, ensuring transparency and accessibility for all stakeholders.

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Ministry of Finance

Government launches a one-time settlement Scheme Vivad se Vishwas – II (Contractual Disputes) to effectively settle pending contractual disputes, as announced in the Union Budget 2023-24

Last date for submitting claims under the scheme is 31.10.2023

The Department of Expenditure, Ministry of Finance, has launched the scheme, “Vivad se Vishwas II – (Contractual Disputes), to effectively settle the pending contractual disputes of government and government undertakings. The scheme was announced in the Union Budget 2023-24 by the Union Finance Minister.

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 Department of Expenditure, Ministry of Finance, had issued an order on 29.05.2023 indicating detailed guidelines of the scheme. The last date for submission of claims is 31.10.2023.

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

Status of dispute The award shall have been issued upto the following date
Arbitral Award passed 31.01.2023
Court Award passed 30.04.2023

The scheme will apply to all domestic contractual disputes where one of the parties is either the Government of India or an organisation working under its control.

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

For Arbitral Awards passed on or before 31.01.2023, the settlement amount offered is up to 65% of the net amount awarded.

Government e-Marketplace (GeM) has developed a dedicated web-page for implementation of this scheme. Eligible claims shall be processed only through GeM. For non-GeM contracts of Ministry of Railways, contractors may register their claims on IREPS (www.ireps.gov.in).

The details of the scheme are available on the website of Ministry of Finance, Department of Expenditure.

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