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NHAI one-time settlement under Vivad se Vishwas III: what it is and how to get your claim file ready

Published 8 October 2026. About 7 minutes to read.

What the scheme is

Vivad se Vishwas is the government's one-time settlement route for contractual disputes in which an arbitral award or court order has already been made against a government body. The earlier round, Vivad se Vishwas II (Contractual Disputes), was notified by the Ministry of Finance on 29 May 2023. According to AZB & Partners, it offered a net 85 per cent of amounts under court orders and 65 per cent under arbitral awards, with claims filed on the GeM portal between 15 July and 31 October 2023.

The 2026 round for highways, Vivad se Vishwas III (VsV-III), was put in place through a series of documents:

• a MoRTH Office Memorandum of 13 February 2026, which operationalised VsV-III for contractual disputes in the highways sector;
• NHAI Policy Circular No. 2.1.90/2026 dated 20 February 2026, the standard operating procedure (SOP) for claims under NHAI contracts;
• a MoRTH Office Memorandum of 27 February 2026 on the scope of eligible claims;
• NHAI Policy Circular No. 2.1.91/2026 dated 19 March 2026, which clarified the SOP; and
• a MoRTH Office Memorandum of 9 April 2026, addressed to state PWDs, road construction departments, the Border Roads Organisation and MoRTH's regional officers, which extended the GeM deadline and asked agencies to take up smaller cases (claims up to Rs 100 crore) on priority.

Eligibility, as reported

We have read the 9 April 2026 memorandum in full. For the NHAI SOP and the March clarification we rely on Fox Mandal's published summaries, because we could not access the NHAI text. On that basis:

• Arbitral awards passed up to 31 October 2025, and court orders under Section 34 or Section 37 of the Arbitration and Conciliation Act, 1996 passed on or before 30 November 2025, are covered.
• Only monetary awards qualify. Awards directing specific performance are outside the scheme, as are disputes already settled through conciliation.
• Awards up to Rs 500 crore qualify. Above that, a contractor may still opt in, but the amount is worked out as if the award were capped at Rs 500 crore.
• All claims in a project dispute must be settled together, including claims in any connected arbitration or court case on the same project. Claim-by-claim settlement is not allowed.

We could not confirm from a primary source the percentage or formula used to compute the settlement amount under VsV-III. Do not assume the VsV-II percentages carry over.

How the process runs, as reported

1. The contractor registers on GeM through an authorised person and submits the eligible dispute.
2. NHAI's technical division evaluates the claim, reportedly within one week, and consults NHAI's advocate on questions of interpretation. Finance scrutiny follows.
3. An offer is usually sent within about two weeks. The contractor has 30 days to accept. NHAI may revise the offer before acceptance but not after.
4. After acceptance, pending litigation must be withdrawn within 45 days, and the settlement agreement signed within 30 days after that.
5. The model settlement agreement treats the settlement as equivalent to an arbitral award.

If you missed the window, or have no award yet

VsV-III applies only to awards and orders made by the cut-off dates. For other disputes, the 9 April 2026 memorandum directs that the pre-conciliation mechanism be actively used, and says awards above Rs 100 crore and below Rs 5 crore should be specifically examined for immediate settlement. Disputes that have not reached an award will usually go through the contract's own dispute steps, which for many contracts now include conciliation. See our guide to MoRTH's January 2026 circular.

Settlement windows are short. A file that is ready before a window opens is far easier to use than one assembled in the last fortnight.

Getting the claim file ready

Whether you face a settlement window, a pre-conciliation meeting or a conciliation, the officers deciding will read the file quickly and will look for reasons to reduce the amount. A good file has six parts.

1. A register of every proceeding on the project

Because all claims in a project dispute must be settled together, start with a single list: each arbitration, Section 34 and Section 37 case and execution petition, with case numbers, forum, key dates, amounts awarded, interest awarded, amounts already paid or deposited, and the current stage.

2. The award and orders, with a clean computation

Keep the award, any corrections and every court order. Prepare a computation of principal, interest up to a stated date and payments received, with the working shown, so that NHAI's figures can be checked line by line.

3. A dated chronology

One line per event: the date, what happened, the document and the page. Link each claim head to the events that support it. This is the document most often missing, and the one an evaluator under time pressure finds most useful.

4. The notices

For each triggering event, record the notice sent, the clause relied on, the date of delivery and any reply. Where a notice was late or missing, say so in your internal file, so that the risk is priced honestly when the offer arrives. Our notice and time-bar checklist explains what to look for.

5. Quantum support

For each claim head, set out the method, the source data (measurement books, running account bills, plant logs, payroll records, price indices) and a short summary that a reader without an engineering background can follow.

6. Authority and approvals

Have a board resolution or authorisation ready for the person who will act on GeM. Check whether lenders, consortium members or subcontractors with back-to-back claims need to agree before you accept an offer or withdraw a case.

Finally, write a one-page decision note for management: the amount at stake, what the scheme would pay once the formula is confirmed, the time and cost of continuing, and the risks to the award if it stays in court. That is what will be asked for on the day the offer arrives.

Have the chronology ready before the next window

Claim Diagnostic builds a dated chronology, a notice-compliance check and a draft claim register from a project's documents. We offer a free pilot on one past or closed matter.

See the sample report, read more on the home page, or ask for a free pilot through our contact form.

Sources

All accessed on 8 October 2026.

1. Ministry of Road Transport and Highways, Office Memorandum No. RW/NH-36094/03/2025-S&R(P&B) dated 9 April 2026, "Instructions regarding Settlement of Disputes through Pre-Conciliation mechanism/VsV-III and streamlining of conduct of Arbitration Proceedings". https://morth.gov.in/backend/documents/uploaded/13036-%20Circular.pdf
2. Fox Mandal, "NHAI operationalises one-time settlement framework for contractual disputes", March 2026 (summary of NHAI Policy Circular No. 2.1.90/2026). https://foxmandal.in/News/nhai-operationalises-one-time-settlement-framework-for-contractual-disputes/
3. Fox Mandal, "NHAI clarifies scope of one-time settlement under Vivad se Vishwas III scheme", April 2026 (summary of NHAI Policy Circular No. 2.1.91/2026). https://foxmandal.in/News/nhai-clarifies-scope-of-one-time-settlement-under-vivad-se-vishwas-iii-scheme/
4. Shivani PS, "Road Ministry pushes for pre-conciliation in highway contractual disputes under Vivad Se Vishwas-III Scheme", LiveLaw Biz, 20 April 2026. https://www.livelawbiz.com/arbitration/morth-mandates-strict-oversight-of-arbitration-in-infrastructure-contracts-531028
5. AZB & Partners, "Vivad Se Vishwas II (Contractual Disputes): an initiative of the Government of India towards expeditious resolution of disputes", 26 September 2023. https://www.azbpartners.com/bank/vivad-se-vishwas-ii-contractual-disputes-an-initiative-of-the-government-of-india-towards-expeditious-resolution-of-disputes/