Delhi Government to Revamp Dispute Resolution: A Move Away from Arbitration
The Delhi government plans to discuss phasing out arbitration in construction contracts during a Cabinet meeting. The Barapullah Phase-3 project, incurring significant financial losses due to arbitration, is central to these discussions. The decision aims to resolve disputes through courts, reducing government liabilities from rising project costs.
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The Delhi government's Cabinet is slated to convene on Tuesday to deliberate on pivotal arbitration issues impacting the Barapullah Phase-3 elevated road project, sources revealed on Monday.
In a significant move this June, Public Works Department (PWD) Minister Parvesh Verma announced the elimination of arbitration clauses from departmental contracts. This strategic shift ensures that future disputes will be settled exclusively in court, effectively ending the longstanding arbitration practice.
The Barapullah Phase-3 project has emerged as a focal point, with the government previously incurring a Rs 300 crore loss due to non-appealed arbitration outcomes, leading to financial benefits for private contractors. Awaiting tree-felling permission, PWD officials anticipate project completion in six months amidst rising construction costs and project delays.
(With inputs from agencies.)
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