Pushed by finance ministry, ONGC to reduce arbitration, use IIAC services

livemint.com:

Subscribe to enjoy similar stories. New Delhi: State-run Oil and Natural Gas Corp.

Ltd (ONGC) will not engage in arbitration in public procurement contracts if the disputed amount exceeds ₹10 crore, days after peer Oil India Ltd (OIL) said it would opt out of this expensive dispute resolution process following a finance ministry advisory. For disputed amounts under ₹10 crore, ONGC will use the services of the New Delhi-based India International Arbitration Centre (IIAC), a commercial disputes resolution forum that is headed by a former judge of the Supreme Court.

This follows the finance ministry’s advisory in June urging all government entities to curb arbitration proceedings valued at over ₹10 crore in domestic procurement contracts in order to cut such disputes and reduce their financial burden. ONGC “has implemented the guidelines issued by MoF (ministry of finance) vide OM (office memorandum) dated 3.6.2024 applicable for domestic public procurement by Govt.

Entities," a spokesperson for ONGC said in an emailed response to Mint’s query. Also read | Oil India first PSU to reduce arbitration after finance ministry's advisory “Accordingly, in future contracts of ONGC for domestic procurement, the upper limit of claim amount to be referred to arbitration shall be ₹10 crore and the arbitration will be governed through institutional arbitration under India International Arbitration Centre in accordance with the above mentioned guidelines," the spokesperson added.

Queries emailed to the ministry of law and justice and the ministry of finance on Wednesday did not elicit a response. However, in response to an emailed query about ONGC’s plan to use the services of IIAC, its registrar Vinay Kumar Sanduja said, “This