NEW DELHI: The Delhi government has directed the Public Works Department (PWD), water department, irrigation, and flood control department to submit detailed records of all arbitration cases involving claims above Rs 1 crore from the last 20 years.
In a statement issued on Tuesday, the government said that this comprehensive audit is aimed at assessing the extent of financial losses arising from legal disputes and bringing transparency to how public funds were spent or lost during the past two decades.
“The departments are instructed to provide year-wise and award-wise data covering the total number of arbitration cases exceeding Rs 1 crore and matters decided against the government, along with brief descriptions,” the statement read.
“The amount paid or losses incurred in such cases, and the number of appeals filed before making payments,” it added. This audit comes amid mounting concerns over repeated legal setbacks in infrastructure and civil works.
Furthermore, government has issued a binding directive that no payments shall be made in arbitration cases where the award is against the government, unless all legal remedies are exhausted and formal clearance is obtained from the law department.
In a significant reform, the PWD removes the arbitration clause officially from all new contracts. Contractors from now onwards will have to approach the courts in the event of disputes. “Public funds must be treated as sacred. For years, departments have settled claims through arbitration without exhausting legal options—this won’t continue,” said PWD Minister Parvesh Verma.
“We are auditing two decades of history to identify who was responsible and why legal battles were surrendered. Importantly, I have now removed the arbitration clause from PWD contracts. If there’s a dispute, let it go to court. No easy money through arbitration anymore,” he added.
PWD removes arbitration clause officially
In a significant reform, the PWD removes the arbitration clause officially from all new contracts. Contractors from now onwards will have to approach the courts in the event of disputes, making the process more rigorous and reducing the scope for opportunistic claims.