Karnataka withdraws arbitration clause in govt tenders/contracts

The government has decided to withdraw the arbitration clause in the government tenders/contracts.

Announcing this on Tuesday, Law and Parliamentary Affairs Minister H K Patil said, considering the financial burden caused to the government, the decision to withdraw the clause has been taken.

“In several cases, the government experienced financial losses as many contractors/tenderers approached courts using the arbitration clause. I cannot name a particular case here,” said the minister. He said it was not good on the part of the government to sit with private persons for compromise.

This decision by the government will curtail contractors/tenderers from approaching courts.

“If it (arbitration) is necessary in one or two important cases, the same can be discussed in the law department and a decision taken,” he explained. The minister mentioned about the recent decision in the Cabinet to approach the Supreme Court in one of the arbitration cases.

An official notification to withdraw the clause has been issued on November 16.