Delhi PWD Eliminates Arbitration Clause to Curb Financial Losses
The Delhi government's Public Works Department has removed the arbitration clause from contracts to reduce financial losses. Disputes will now be settled in court, following significant losses in cases like the Barapullah Phase 3 project. This change aims to avoid costly arbitration outcomes.
- Country:
- India
The Public Works Department (PWD) of the Delhi government has taken a decisive step to curb its escalating financial losses by eliminating the arbitration clause from its contract conditions.
Under the revised terms, any disputes between PWD and private contractors will henceforth be settled exclusively in courts. Originally, arbitration was intended as a faster alternative to litigation, but it has often resulted in hefty financial setbacks for the government.
Notably, in the Barapullah Phase 3 project, the PWD faced a loss of approximately Rs 300 crore due to an arbitration decision. The shift to court-mediated dispute resolution aims to prevent such losses and improve financial oversight.
(With inputs from agencies.)
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