Centre launches Vivad se Vishwas 2.0 scheme to settle contractual disputes

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New Delhi: To provide a much-needed impetus to the resolution of contractual disputes involving the government and government undertakings, the Department of Expenditure, Ministry of Finance, launched the “Vivad se Vishwas 2" scheme on Wednesday. The move is aimed at promoting ease of doing business and will cover disputes up to 30 September 2022. Finance minister Nirmala Sitharaman had announced in the budget that in order to settle contractual disputes involving the government and government undertakings, where an arbitral award is under legal challenge, a voluntary settlement scheme with standardized terms will be introduced.

This will be done by offering graded settlement terms depending on pendency level of the dispute, the finance minister had said. To ensure the scheme’s seamless implementation, the Department of Expenditure has issued detailed guidelines for “Vivad se Vishwas-2 (Contractual Disputes)" on 29 May 2023. The deadline for submitting claims under the scheme is 31 October 2023.

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