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.

Settlement scheme Vivad se Vishwas II offers graded voluntary settlements for government contractual disputes under standardized terms. Vivad se Vishwas II is a one-time voluntary settlement scheme for domestic contractual disputes involving the Government or its controlled organisations, covering arbitral awards passed on or before 31.01.2023 and court awards passed on or before 30.04.2023. Eligible claims must be submitted through GeM (with IREPS for certain Railways contracts). The scheme offers graded standardized settlement terms with maximum settlement amounts of up to 65% of net arbitral awards and up to 85% of net court awards, pursuant to Department of Expenditure guidelines issued for implementation.