PWD, water, irrigation dept asked to submit arbitration case data for audit

In a far-reaching move to enforce fiscal discipline and legal accountability, the Delhi government has directed the Public Works Department (PWD), water department, irrigation, and flood control department to submit detailed records of all arbitration cases involving claims above Rs 1 crore from the last 20 years.

This comprehensive audit is aimed at assessing the extent of financial losses arising from legal disputes and bringing transparency to how public funds were spent or lost, during the past two decades.

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The departments have been instructed to provide year-wise and award-wise data covering the total number of arbitration cases exceeding Rs 1 crore, those matters decided against the government, along with brief descriptions.

The amount paid or losses incurred in such cases, and the number of appeals filed before making payments.

This audit comes amid mounting concerns over repeated legal setbacks in infrastructure and civil works.

Furthermore, the Delhi government has issued a binding directive that no payments shall be made in arbitration cases where the award is against the government, unless all legal remedies have been exhausted and formal clearance is obtained from the Law Department.

A major reform also comes from the PWD, where the arbitration clause has now been officially removed from all new contracts.

Contractors from now onwards will have to approach the courts in the event of disputes, making the process more rigorous and reducing the scope for opportunistic claims.

The move has been initiated under the direction of PWD Minister Parvesh Verma, who has said that, “Public funds must be treated as sacred. For years, departments have settled claims through arbitration without exhausting legal options—this won’t continue.”

“We are auditing two decades of arbitration history to identify who was responsible, and why legal battles were surrendered. Importantly, I have now removed the arbitration clause from PWD contracts. If there’s a dispute, let it go to court. No easy money through arbitration anymore,” Verma added.

This strategic shift is expected to act as a strong deterrent to frivolous claims.

With this 20-year review, the Delhi Government aims to establish structural reforms in contract enforcement and legal strategy—preventing uncontrollable financial loss in future.