New Delhi: In a sweeping measure aimed at financial accountability and legal reform, the Delhi Government has directed the Public Works Department (PWD), Water Department, and Irrigation and Flood Control Department to submit detailed records of all arbitration cases over Rs.1 crore from the past 20 years.
The departments must provide year-wise and award-wise data on arbitration disputes, including the number of cases, those decided against the government, the amounts paid or lost, and whether appeals were filed before making payments. The move seeks to uncover patterns of financial losses stemming from legal disputes in infrastructure and civil works.
Raising serious concerns over past settlements, the government has also barred departments from making any payments in cases where the award is against the government, unless all legal remedies have been pursued and clearance is obtained
from the Law department.
A major structural change has also been introduced in the Public Works Department. Under instructions from PWD Minister Parvesh Sahib Singh, the arbitration clause has now been scrapped
from all new contracts.
“Public funds must be treated as sacred. For years, departments have settled claims through arbitration without exhausting legal options, this won’t continue,” the minister said.
He added, “We are auditing two decades of arbitration history to identify who was responsible and why legal battles were surrendered. If there’s a dispute, let it go to court. No easy money through
arbitration anymore.”
The government believes this step will curb unnecessary payouts, deter frivolous claims by contractors, and compel greater legal diligence in future project disputes.
By enforcing this comprehensive audit and eliminating arbitration clauses, Delhi aims to safeguard public finances, strengthen contract enforcement, and restore public confidence in how infrastructure projects are handled.