Central government moots launch of NJDG-like portal for its arbitration disputes

The Government of India has proposed the launch of a comprehensive digital platform akin to the National Judicial Data Grid (NJDG) to monitor all arbitration cases involving government departments.

The Ministry of Law and Justice's Department of Legal Affairs has announced the creation of a centralised Arbitration Portal that will track cases across all ministries, departments and autonomous bodies.

"An Arbitration Portal shall be created by DoLA on the lines of [the] National Judicial Data Grid, to collate the data on arbitration matters involving the Government and monitor the progress…cutting across Ministries/Departments of the Central Government or its attached and subordinate offices and the autonomous bodies,” a press release states.

Each arbitration involving the Central government or its instrumentalities will be assigned a unique case ID, generated through the portal. Departments will be required to upload comprehensive case details, including the amount under dispute.

“Every Arbitration matter…should generate a unique case ID from this portal. Each Department should regularly upload all required details…including amount under dispute.”

The directive signals a clear policy preference for institutional arbitration over ad-hoc proceedings.

“Wherever a recourse to arbitration is deemed necessary, institutional arbitration may be preferred over ad-hoc arbitration.”

However, the Centre has advised that arbitration clauses should not be included as a matter of routine in government contracts, but rather assessed on their merits:

“Inclusion of arbitration clauses in Government contracts should be considered on a case-by-case basis, with such clauses specifically designed to ensure public accountability and judicial oversight."

To ensure effective supervision, the policy mandates regular review of arbitration cases at the level of secretaries or other senior officials in each department.

“A periodic review of all arbitration cases…should be conducted at the level of the Secretary or any Senior officer of the concerned Ministry/Department," the directive said.

Significant outcomes of such reviews are to be reported to the Department of Legal Affairs for reference and policy development.

The government has clarified that arbitration awards are inherently case-specific and should not be considered binding precedent.

“Arbitral awards are inherently case-specific…and do not serve as precedent for future cases.”

Departments have also been instructed to keep in view existing procurement norms, including those issued by the Department of Expenditure.

“Guidelines issued by the Government for recourse to Arbitration and/or Mediation may be kept in view including for Contracts of Domestic Public Procurement."

Appeals and challenges to arbitral awards must strictly adhere to the legal framework under the Arbitration and Conciliation Act, 1996, the directive said.

Departments have also been directed to categorise arbitration matters based on sensitivity.

“The Legal Cell in each Ministry/Department should classify cases into three categories: i) highly sensitive, ii) sensitive, and iii) regular. Cases classified as highly sensitive or sensitive - such as those involving national security, internal security, law-and-order concerns, policy or statutory implications, or those with significant financial stakes - should be reviewed by the concerned Secretary to determine the appropriate course of action.”

A financial threshold has been proposed to determine whether disputes should be litigated or arbitrated:

“The advisability of pursuing litigation involving amounts of ₹10 crore or less… should be evaluated by a Committee on Appeals.”

The directive forms part of a broader government initiative to reduce litigation, promote alternate dispute resolution and improve governance in handling public disputes.