Road Ministry Pushes For Pre-Conciliation In Highway Contractual Disputes Under Vivad Se Vishwas-III Scheme
Shivani PS
20 April 2026 6:33 PM IST
The Ministry of Road Transport and Highways has directed agencies executing highway projects to step up the use of pre-conciliation under the Vivad se Vishwas III scheme and ensure strict adherence to arbitration procedures, following a review that flagged rising interest liabilities.
An office memorandum issued on April 9, 2026, records that the Ministry examined pending arbitration and court cases in March and stressed the need for compliance with its Arbitration Standard Operating Procedure dated July 22, 2025.
Agencies such as State Public Works Departments, Road Construction Departments and the Border Roads Organisation have been asked to discuss and make contractors and consultants aware of settlement options under the scheme.
Claims up to Rs 100 crore and cases up to Rs 200 crore decided by district courts but pending before High Courts are to be taken up on priority. The deadline for filing claims on the GeM portal has been extended to April 15, 2026.
The Ministry noted that several arbitration matters were being pursued by State agencies without the consultation or knowledge of its Regional Officers. It recorded that this “often results in financial implications becoming a fait accompli for the Central/State Governments.”
It directed that Regional Officers be kept in the loop at all stages of disputes, arbitration and court proceedings. It further cautioned that any proceedings pursued without their involvement shall be viewed adversely and may lead to recovery of financial losses from the officials or agencies concerned.
On arbitration, the Ministry pointed to inaction in the nomination of arbitrators, noting that this has led contractors to approach courts for the appointment of sole arbitrators, resulting in the loss of the government's contractual right to nominate one. Regional Officers have been directed to maintain a close watch on disputes and ensure timely nomination of arbitrators as per the Standard Operating Procedure dated July 22, 2025.
The memorandum reiterates the timeline under the Arbitration and Conciliation Act. Arbitral tribunals are required to deliver awards within 12 months, extendable by six months with mutual consent, failing which the mandate terminates unless extended by a court. Proposals for extension are to be submitted at least 45 days before expiry.
It also states that the pre-conciliation mechanism may be actively utilized to facilitate settlement of disputes. Cases involving awards above Rs. 100 crore and below Rs. 5 crore are to be specifically scrutinized to explore immediate settlement.
The directions have been issued for immediate and strict compliance across all implementing agencies.
The move comes against the backdrop of the Vivad se Vishwas framework introduced in 2023 to enable time-bound settlement of contractual disputes in the infrastructure sector. A revised version of the scheme was notified in February 2026 to cover disputes where arbitration awards or court orders were passed after earlier cut-off dates.