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Maharashtra Government Makes Institutional Arbitration Compulsory for Contracts Above Rs 5 Crore
April 10, 2017
In a bid to minimize litigation and maximize investments, the Maharashtra government has made it mandatory to include an institutional arbitration clause for dispute resolution for all the commercial contracts of the state which are above Rs. 5 crores.
Key points:
- Maharashtra is the first state to have an institutional arbitration policy.
- As per the new rule, the government agencies such as MMRDA, MHDA, etc. will have to insert an institutional arbitration clause in contracts above Rs 5 crore that is drawn by them.
- Previously, whenever a dispute occurred the government would appoint its own officials to arbitrate. The lack of an actual independent arbitration counsel was highly criticized by both domestic and foreign investors.
