News
NHAI Clarifies Scope of One-Time Settlement under Vivad Se Vishwas–III Scheme
The National Highways Authority of India (NHAI), vide Policy Circular No. 2.1.91/2026 dated March 19, 2026, has issued a clarification regarding the Standard Operating Procedure (SOP) dated February 20, 2026, governing the implementation of the Vivad Se Vishwas–III (VsV-III) scheme for contractual disputes introduced by Ministry of Road Transport and Highways (MoRTH). The clarification assumes importance in ensuring uniform interpretation and operational consistency across field offices for processing one-time settlement proposals under the scheme.
The Circular forms a part of a broader policy sequence initiated through MoRTH’s Office Memorandum dated February 13, 2026, which formally operationalised the VsV-III scheme for contractual disputes in the highways sector. The scheme builds upon earlier dispute-resolution settlement initiatives and seeks to facilitate expedited resolution of contractual claims between concessionaires, contractors and implementing agencies through a structured one-time settlement mechanism.
As a part of this implementation framework, NHAI issued the SOP dated February 20, 2026, prescribing the procedural mechanism for submission and settlement of claims arising from contracts executed by NHAI. The VsV-III scheme is intended to accelerate resolution of contractual disputes and unlock capital tied up in arbitration and litigation across highway projects.
The present Circular further clarifies the scope of claims eligible for settlement under the VsV-III Scheme by incorporating MoRTH’s Office Memorandum dated February 27, 2026.
It is clarified that:
- all claims forming part of a dispute in respect of a particular project must be settled in entirety for such dispute to qualify under the scheme; and
- all claims arising from corresponding arbitration proceedings or court cases in relation to the project must also be resolved as part of such a settlement.
The clarification removes any ambiguity regarding the permissibility of partial or claim-wise settlement under the scheme.
The Circular therefore reinforces that the VsV-III scheme contemplates full and final project-level dispute resolution, promoting comprehensive closure of contractual disputes and reducing fragmented outcomes and residual litigation exposure, while correspondingly limiting flexibility for stakeholders seeking selective settlement of individual claims.
