The Supreme Court upheld the exclusive jurisdiction of the Madhya Pradesh Arbitration Tribunal over disputes arising from state works contracts, as per the MP Madhyastham Adhikaran Adhiniyam, 1983. It ruled that a private arbitration clause in a concession agreement cannot override this statutory mandate, rendering such arbitration non-est in law.
Facts Of The Case:
The dispute arose from a Concession Agreement dated 05.01.2012 between Umri Pooph Pratappur Tollways Pvt. Ltd. (Appellant) and the Madhya Pradesh Road Development Corporation (Respondent) for the development of a state highway on a BOT (Toll + Annuity) basis. Following alleged breaches and delays attributed to the Respondent, the Appellant first initiated proceedings in 2018 before the Madhya Pradesh Arbitration Tribunal, a special statutory forum under the state’s 1983 Act. However, while that reference was pending, the Appellant simultaneously invoked a private arbitration clause within the agreement and initiated proceedings under the Arbitration and Conciliation Act, 1996 through the International Centre for Alternative Dispute Resolution (ICADR), which appointed an arbitral tribunal. The Respondent challenged this parallel private arbitration before the High Court, which quashed the ICADR-appointed tribunal’s orders. The Appellant then appealed to the Supreme Court, arguing the High Court could not issue a writ against a private party and that the contractual arbitration clause should prevail. The core factual conflict was the Appellant’s pursuit of two mutually exclusive forums for the same dispute.
Procedural History:
The procedural history began with the appellant initiating arbitration proceedings under the 1996 Act before the International Centre for Alternative Dispute Resolution (ICADR), which appointed an arbitral tribunal. The respondent, M.P. Road Development Corporation, challenged this appointment by filing a writ petition before the High Court of Madhya Pradesh. The High Court, in its impugned judgment, allowed the writ petition and quashed the orders constituting the arbitral tribunal. The appellant then appealed to the Supreme Court of India by way of a special leave petition, which was converted into the present civil appeal, leading to the final judgment.
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Court Observation:
The court observed that the statutory framework of the Madhya Pradesh Madhyastham Adhikaran Adhiniyam, 1983 creates an exclusive jurisdiction for the state tribunal over disputes arising from works contracts involving the state. It held that parties cannot by a private contract override this legislative mandate, rendering the arbitration clause in the concession agreement inoperative. The court further noted that the appellant’s conduct in initiating parallel proceedings and withdrawing the original reference without liberty to re-file constituted an abuse of process and forum shopping. The statutory bar under the state Act’s regulations precluded a fresh adjudication of the same claims in any alternative forum.
Final Decision & Judgement:
The Supreme Court dismissed the appeal and upheld the High Court’s judgment quashing the private arbitration proceedings. The court affirmed the exclusive jurisdiction of the Madhya Pradesh Arbitration Tribunal to adjudicate the dispute, ruling that the contractual arbitration clause was void as it contravened the special state legislation. However, in the interests of justice, the court permitted the appellant to apply for the recall of its earlier withdrawal and seek restoration of its original reference petition before the state tribunal for a final adjudication on the merits.
Case Details:
Case Title: Umri Pooph Pratappur (UPP) Tollways Pvt. Ltd. vs. M.P. Road Development Corporation and Another Citation: 2025 INSC 907 Appeal Number: Civil Appeal No. 9920 of 2025 Date of Judgement: July 30, 2025 Judges/Justice Name: Justice J.B. Pardiwala and Justice R. Mahadevan
Download The Judgement Here