Statutory Arbitration Trumps Contractual Clause: Exclusive Jurisdiction of the M.P. Arbitration Tribunal in Works-Contract Disputes

Commentary on Umri Pooph Pratappur (UPP) Tollways Pvt. Ltd. v. M.P. Road Development Corporation & Anr. (2025 INSC 907)

1. Introduction

This Supreme Court judgment settles the long-running tension between consensual arbitration under the Arbitration and Conciliation Act, 1996 (“1996 Act”) and the special statutory mechanism created by the Madhya Pradesh Madhyastham Adhikaran Adhiniyam, 1983 (“1983 Act”) for works-contract disputes involving the State or its instrumentalities.
The appellant–concessionaire (UPP Tollways) sought to bypass the M.P. Arbitration Tribunal by invoking a contractual clause referring disputes to a three-member arbitral tribunal under the aegis of the International Centre for Alternative Dispute Resolution (ICADR). The High Court quashed that move; the Supreme Court now affirms and elaborates the reasons.

Parties

Appellant: Umri Pooph Pratappur (UPP) Tollways Pvt. Ltd. – a private SPV that constructed and operated a 43.775-km road project.
Respondent 1: Madhya Pradesh Road Development Corporation Ltd. (MPRDC) – wholly owned by the State.
Respondent 2: International Centre for Alternative Dispute Resolution (ICADR) – whose Secretary-General appointed the private arbitral tribunal.

Key Issues

Maintainability of a writ petition by a State corporation against a private party to quash arbitral proceedings.
Whether the 1983 Act confers exclusive jurisdiction on the M.P. Arbitration Tribunal over works-contract disputes, overriding any arbitration clause.
Effect of withdrawing a reference before that Tribunal without liberty (Rule 53(3)(b) of the 1985 Regulations).
Limitation and forum-shopping concerns stemming from parallel proceedings.

2. Summary of the Judgment

The Court (per R. Mahadevan J., concurred by J.B. Pardiwala J.) dismissed the appeal and upheld the High Court’s decision, holding that:

The writ petition was maintainable because the dispute involved enforcement of a public law obligation – adherence to a statutory dispute-resolution regime – and not a purely private contractual matter.
The Concession Agreement is a “works contract” under the 1983 Act. Section 7 of that Act mandates that all disputes from such contracts “shall” be referred to the M.P. Arbitration Tribunal, notwithstanding any arbitration clause.
Precedents (Viva Highways FB, L.G. Chaudhary II, State of Chhattisgarh v. KMC, etc.) establishing the Tribunal’s exclusivity remain binding; private arbitration is non est.
By withdrawing Reference Case 61/2018 without liberty, the appellant is barred (Rule 53(3)(b)) from re-litigating the same claims elsewhere. Nonetheless, in a final equitable gesture, the Court permits the appellant to apply within two weeks to revive that reference; the Tribunal must decide restoration within two more weeks and, if restored, decide the case within four months.

3. Analysis

3.1 Precedents Cited and Their Influence

M.P. Rural Road Development Authority v. L.G. Chaudhary Engineers & Contractors (2018) 10 SCC 826 (“L.G. Chaudhary II”)
Three-Judge Bench; declared that the 1983 Act survives the 1996 Act and confers exclusive jurisdiction on the Tribunal, even post-termination of contract. The present Court treats it as the decisive authority.
Viva Highways Ltd. v. MPRDC 2017 SCC OnLine MP 1448 (Full Bench)
Held that “works contract” disputes (including concession agreements) must go to the Tribunal; SLPs dismissed by the Supreme Court, hence binding. Relied on extensively to rebut the appellant’s claim that only “ascertained” sums are covered.
State of Chhattisgarh v. KMC Constructions (2018) 10 SCC 839 & ARSS Damoh-Hirapur Tolls (P) Ltd. 2018 SCC OnLine SC 3899
Both reaffirmed that any direction under the 1996 Act is untenable where the 1983 Act applies.
Gayathri Projects Ltd. v. MPRDC 2025 SCC OnLine SC 1136
New decision clarifying how far-progressed arbitral proceedings can be salvaged or transferred after L.G. Chaudhary II. Cited to demonstrate that the stage of defence filing matters, but here proceedings were nascent, so transfer/termination is proper.
Booz Allen & Hamilton Inc. v. SBI Home Finance (2011) 5 SCC 532
Principle that arbitration is excluded when a specific statute vests jurisdiction in a special forum. Used to hold the contractual clause void pro tanto.

3.2 Court’s Legal Reasoning

The Court’s reasoning traverses three layers:

Public-law character of the dispute – Developing and maintaining highways is a sovereign/public function; MPRDC acts as a State instrumentality. Hence, writ jurisdiction is attracted to enforce compliance with the statutory dispute-resolution mandate.
Inter-statutory hierarchy – The 1983 Act is a later special statute vis-à-vis the erstwhile Arbitration Act 1940 and is saved by s 2(4) 1996 Act. By s 20 of the 1983 Act, civil courts (and by necessary implication, consensual arbitrators) lack jurisdiction where the Tribunal can act.
Party conduct and procedural bars
• Doctrine of election: The appellant first chose the statutory forum, then abandoned it to try private arbitration – impermissible.
• Rule 53(3)(b): Withdrawal without liberty precludes re-filing.
• Limitation: Claims (2013-15) are likely time-barred under s 43 (read with Limitation Act) if fresh arbitration were allowed.
• Constructive res judicata: As the appellant was a party to earlier SLPs upholding Viva Highways, it cannot reopen the issue.

3.3 Impact of the Decision

This ruling has significant ripple effects:

Re-confirmation of statutory supremacy: Private parties contracting with the State in Madhya Pradesh (roads, bridges, public infrastructure, electricity lines, water supply) must reckon with the Tribunal’s exclusive domain.
Drafting caution: Concessionaires and lenders can no longer rely on boiler-plate “ICADR/New Delhi” clauses. Clear carve-outs acknowledging the 1983 Act will be required, and risk-allocations must factor Tribunal timelines and procedure.
Forum-shopping curbed: The judgment condemns “dual track” dispute resolution. Once a statutory forum is seized, switching to private arbitration is not just void but can bar the claim entirely if withdrawn without liberty.
Administrative law intersection: Maintains that writ jurisdiction can be invoked by a State body against a private contractor to ensure compliance with statutory scheme – enlarging the conventional view of who can seek writs.
Procedure within Tribunal: By setting a four-month disposal timeline (post-restoration), the Supreme Court nudges the Tribunal to deliver time-bound justice, addressing criticisms of its slow pace.

4. Complex Concepts Simplified

Works Contract: An agreement (including concession agreements) for construction/repair of public infrastructure. Under M.P. law, it automatically triggers the jurisdiction of the special Arbitration Tribunal.
Ascertained vs. Ascertainable Money: “Ascertained” = already quantified; “ascertainable” = quantification possible by evidence/calculation. The amended 1983 Act and case-law treat both as within the Tribunal’s scope.
Statutory Arbitration: When legislation itself provides an adjudicatory forum (here, the M.P. Arbitration Tribunal) – parties cannot opt out.
Doctrine of Election: A litigant must choose one of two inconsistent remedies; pursuing both is barred.
Rule 53(3)(b) Bar: Withdrawing a reference before the Tribunal without permission extinguishes the right to raise the same claims again.
Constructive Res Judicata: Issues that could and should have been raised in earlier proceedings are deemed decided and cannot be reopened.
Per Incuriam: A decision rendered without noticing binding precedent/statutory provision; lacks authority on that point.

5. Conclusion

The Supreme Court’s pronouncement in UPP Tollways fortifies the principle that when the legislature has created a bespoke dispute-resolution forum for public works, contractual autonomy yields to statutory command. It also illustrates the Court’s intolerance for forum-shopping and its willingness to deploy writ jurisdiction to protect statutory schemes, even at the behest of State entities. Finally, by allowing a limited window to revive the withdrawn reference, the Court balances strict legal doctrine with equitable considerations, ensuring that substantive claims are not lost if pursued diligently in the correct forum.

Statutory Arbitration Trumps Contractual Clause: Exclusive Jurisdiction of the M.P. Arbitration Tribunal in Works-Contract Disputes – A Commentary on Umri Pooph Pratappur (UPP) Tollways Pvt. Ltd. v. M.P. Road Development Corporation (2025 INSC 907)