SRINAGAR: The Jammu Kashmir government has said that arbitration awards amounting to around Rs 248 crore are currently under challenge in various courts, with none of them paid so far. The data was revealed in the Legislative Assembly in response to a starred question (No. 389) tabled by Pawan Kumar Gupta regarding arbitration cases pending against the government.
According to official figures, 130 arbitration cases have been reported in different departments over the past two years, with the Jal Shakti Department leading with 26 cases, followed by Power Development (18), Public Works (R&B) (17), and Housing and Urban Development (14). Departments such as Planning and Monitoring, Health and Medical Education, and Rural Development also reported multiple cases, while several others, including Tourism, Labour, and Culture, had none.
The government informed the House that a total of 18 arbitration awards were made “Rule of Court” under the now-repealed Jammu and Kashmir Arbitration Act, 1945, with a combined value of Rs 248 crore. None of these awards have been paid, as each has been legally challenged by the government.
The Department of Law, Justice and Parliamentary Affairs clarified that since the enforcement of the Arbitration and Conciliation Act, 1996, all arbitral awards are deemed decrees of a civil court and can be enforced directly, eliminating the earlier requirement of making them a “Rule of Court.”
In its reply, the government said that every arbitration award passed against the Jammu and Kashmir administration has been contested under the law, and that there was no uniform reason for the awards being passed against it. The awards, it said, were based on individual case circumstances.
The Law Department further stated that disciplinary action has been recommended against officers found negligent or complicit in cases resulting in financial losses. “This department has time and again advised strict action against delinquent officers whose negligence or inaction has proven detrimental to government interests,” the reply said.
To strengthen its legal defences and minimise future liabilities, the government has established a dedicated Arbitration Cell under the administrative control of the Law Department. The cell, created in December 2020, is tasked with examining contracts containing arbitration clauses, monitoring ongoing arbitration proceedings, and ensuring timely filing of pleadings and appeals.
In addition, the department has issued guidelines and circulars, including Circular No. 09-JK(LD) of 2024 dated July 3, 2024, mandating strict adherence to arbitration procedures and fixing responsibility for lapses.
Officials said these measures aim to prevent financial losses and ensure accountability in contract management across government departments, even as the Union Territory continues to face mounting arbitration disputes involving hundreds of crores of rupees.
