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The Cabinet Committee on Economic Affairs chaired by the Hon’ble Prime Minister Shri Narendra Modi on November 20 approved certain measures for the effective implementation of the CCEA’s decision of 31 August 2016 on Initiatives to revive the Construction Sector’.
Following proposals put forward by NITI Aayog with respect to the arbitrations by/against Government Entities were approved:
(i) Government Entities will take the decision to initiate proceedings for setting aside of the arbitral award, and any appeal(s) thereto, with the opinion of a Law Officer i.e. Attorney-General for India / the Solicitor-General for India / the Additional Solicitor-General for India, in consultation with Department of Legal Affairs.
(ii) Where a Government Entity has challenged an arbitral award, resultant of which the amount of the arbitral award has not been paid, 75% of such award will be paid by the Government Entity to the contractor / concessionaire against a bank guarantee only for the said 75% and not for its interest component. With respect to the interest payable to the Government. Entity, should the subsequent court order require refund of the said 75%, payment of the same will be as per court order.