Government Launches Vivad se Vishwas 2.0 Scheme for Contractual Dispute Settlement - A Game-Changer for Business Disputes

The Department of Expenditure, Ministry of Finance, has rolled out the highly anticipated Vivad se Vishwas 2.0, also known as the Contractual Disputes scheme, to address and resolve prolonged contractual disputes involving the government and government undertakings. In a significant announcement during the Union Budget 2023-24, Union Finance Minister Smt. Nirmala Sitharaman introduced this scheme, designed to streamline dispute settlement and foster a more business-friendly environment. 

An Overview of Vivad se Vishwas 2.0:

Vivad se Vishwas 2.0 emerges as a game-changer for settling contractual disputes with the government. This scheme establishes a voluntary settlement mechanism for parties entangled in disputes where arbitral awards are being contested in court. Employing a strategic use of graded settlement terms, Vivad se Vishwas 2.0 aims to promote amicable resolutions, ensuring a hassle-free dispute resolution experience.

Eligibility Criteria for Settlement under Vivad se Vishwas 2.0:

To make the most of this settlement scheme, it is vital to meet the following criteria:

The dispute's status must be determined by an award issued up to January 31, 2023, in an arbitral proceeding.

For cases resolved through court proceedings, the award must have been passed on or before April 30, 2023.

Vivad se Vishwas 2.0 extends its scope to encompass all domestic contractual disputes involving the Government of India or organizations under its control.

Settlement Amounts under Vivad se Vishwas 2.0:

To incentivize contractors towards voluntary settlements, Vivad se Vishwas 2.0 offers attractive settlement amounts. For Court Awards passed on or before April 30, 2023, contractors may receive up to 85% of the net amount awarded or upheld by the court. Similarly, for Arbitral Awards passed on or before January 31, 2023, contractors stand to benefit from up to 65% of the net amount awarded.

Benefits of Vivad se Vishwas 2.0:

Vivad se Vishwas 2.0 delivers remarkable advantages for all stakeholders, including:

Faster Resolution: This structured and standardized settlement process ensures swift resolution of pending contractual disputes, saving valuable time and resources.

Reduced Litigation Burden: The scheme promotes voluntary settlement, thus reducing the burden on the legal system, leading to an efficient and effective dispute resolution process.

Business-Friendly Environment: With a voluntary settlement mechanism in place, the scheme fosters a business-friendly environment, encouraging investments and boosting economic growth.

Financial Relief: Contractors can benefit significantly from the attractive settlement amounts, reclaiming a substantial portion of the net amount awarded or upheld by the court or arbitrator.

Accelerating Dispute Resolution with Vivad se Vishwas 2.0:

Through the introduction of Vivad se Vishwas 2.0, the government demonstrates its commitment to expedite the resolution of contractual disputes involving government entities. The scheme's user-friendly approach is complemented by seamless integration with digital platforms like GeM and IREPS, ensuring transparency and efficiency throughout the claim processing journey. As a result, businesses can expect a streamlined dispute resolution process, reducing uncertainty and enhancing overall productivity.