New arbitration guidelines for public procurement contracts unlikely to increase case pendency: Finance Ministry

The Union Finance Ministry informed Parliament that the new 'Guidelines for Arbitration and Mediation in Contracts for Domestic Public Procurement,' issued on June 3, are unlikely to disrupt the arbitration infrastructure or increase court case pendency. These guidelines suggest limiting arbitration clauses in government contracts to disputes under ₹10 crore. The Ministry responded to concerns from the Arbitration Bar of India (ABI) and MP Manish Tewari, asserting that high-value disputes, which often proceed to court post-arbitration, will not significantly affect case volumes. The guidelines aim to address past dissatisfaction with arbitration involving the government.