Upending The Arbitration Regime For Government Procurements

I. INTRODUCTION

On June 3, 2024, the Ministry of Finance, Government of India, issued the Guidelines for Arbitration and Mediation in Contracts of Domestic Public Procurement Guidelines ¹ The Guidelines recommend that arbitration should not be "routinely or automatically included in procurement contracts/ tenders", especially in "large contracts". Specifically, arbitration may only be opted in instances where the value of the dispute in procurement contracts involving the Government of India ("Government") is less than INR 100 million (approximately USD 1.2 million). It is a separate matter, that the Guidelines, issued by Ministry of Finance (and not the Ministry of Law) on a legal matter, do not explain how the "value of the dispute" is to be determined at the time of entering into the contract. The Guidelines advocate for resolution of disputes through mediation and recommend the constitution of a "high level committee" for resolution of "high value matters".