Vivad se Vishwas 2.0: Facilitating Contractual Dispute Resolution

Vivad se Vishwas 2.0 Scheme

The Ministry of Finance’s Department of Expenditure has launched Vivad se Vishwas 2.0, also known as the Contractual Disputes scheme, to address prolonged contractual disputes involving the government and its undertakings. Unveiled during the Union Budget 2023-24 by Union Finance Minister Smt. Nirmala Sitharaman, this initiative aims to streamline dispute resolution, ease the burden on the legal system, and create a more business-friendly environment.

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An Overview of Vivad se Vishwas Scheme

Announced in the Union Budget 2023-24 by Smt. Nirmala Sitharaman, Vivad se Vishwas 2.0 focuses on resolving contractual disputes between the government and its undertakings. The scheme establishes a voluntary settlement mechanism for parties entangled in disputes where arbitral awards are contested in court. It promotes amicable resolutions through graded settlement terms based on the extent of pendency of disputes.

Vivad se Vishwas II: Eligibility Criteria for Settlement

For disputes to be eligible for settlement under the scheme, they must meet the following criteria:

The dispute’s status must be determined by an award issued up to January 31, 2023, in an arbitral proceeding.
Alternatively, for cases resolved through court proceedings, the award must have been passed on or before April 30, 2023.
The scope of the scheme encompasses all domestic contractual disputes involving the Government of India or organizations under its control.

Settlement Amounts

To incentivize contractors to opt for voluntary settlements, the scheme offers attractive settlement amounts. For Court Awards passed on or before April 30, 2023, the settlement amount can go up to 85% of the net amount awarded or upheld by the court. Similarly, for Arbitral Awards passed on or before January 31, 2023, the settlement amount can be up to 65% of the net amount awarded.

Advantages of Vivad se Vishwas II

Vivad se Vishwas 2.0 holds several benefits for all stakeholders:

Faster Resolution: The scheme’s structured and standardized settlement process ensures swift resolution of pending contractual disputes that might otherwise linger in courts for extended periods.
Reduced Litigation Burden: By encouraging parties to opt for voluntary settlements, the scheme alleviates the burden on the legal system, thereby reducing the workload of courts.
Business-Friendly Environment: The availability of a voluntary settlement mechanism fosters a more business-friendly environment, promoting investments and economic growth.
Financial Relief: Contractors can benefit from attractive settlement amounts, allowing them to recover a significant portion of the net amount awarded or upheld by the court or arbitrator.

Conclusion

Vivad se Vishwas 2.0 introduces a voluntary settlement mechanism with standardized terms to expedite contractual dispute resolution involving government entities. By offering favorable settlement amounts and reducing litigation burden, the scheme aims to create a conducive environment for businesses and investments. Supported by digital platforms like GeM and IREPS, the scheme promises transparency and efficiency throughout the claim processing journey.

Priti Palit

Priti Palit, an accomplished edtech writer, boasts a wealth of experience in preparing candidates for multiple government exams. With a passion for education and a keen eye for detail, she has contributed significantly to the field of online learning. Priti’s expertise and dedication continue to empower aspiring individuals in their pursuit of success in government examinations.

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