Cabinet nod to strengthen disputes resolution mechanism for PSUs

In a bid to reduce court litigations on commercial disputes between government enterprises, the Union Cabinet on Wednesday approved introduction of a two-tier mechanism for resolution of such disputes.

The new mechanism will promote equity through mutual/collective efforts to resolve commercial disputes, thereby reducing court litigations on commercial disputes and avoid waste of public money.

"A new two-tier mechanism will be put in place of the existing Permanent Machinery of Arbitration (PMA) to resolve commercial disputes (excluding thsoe concerning Railways, Income Tax, Custom and Excise Departments) between central public sector enterprises (CPSEs) inter se and CPSEs and government departments/organisations, outside of courts of law," an official statement said.

The Cabinet decision is based on the recommendations of the Committee of Secretaries.

The Department of Public Enterprises will issue guidelines to all CPSEs through their administrative Ministries and Departments and state governments and Union Territories for compliance.

--IANS

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