Supreme Court Reinforces Exclusive Jurisdiction of Madhya Pradesh Arbitration Tribunal
High Court Quashes Private Arbitration Proceedings in Major Works Contract Dispute
In a significant judgment reinforcing the statutory framework for adjudicating disputes arising from works contracts, the Supreme Court of India has upheld the exclusive jurisdiction of the Madhya Pradesh Arbitration Tribunal under the Madhya Pradesh Madhyastham Adhikaran Adhiniyam, 1983. The apex court's decision came in the case of Umri Pooph Pratappur Tollways Pvt. Ltd. v. M.P. Road Development Corporation, where private arbitration proceedings initiated under the Arbitration and Conciliation Act, 1996 were quashed.
Background of the Case
The appellant, Umri Pooph Pratappur Tollways Pvt. Ltd., had entered into a concession agreement with the Madhya Pradesh Road Development Corporation for the development of a road project on a Build, Operate, and Transfer basis. Disputes arose between the parties, leading the appellant to invoke private arbitration under the 1996 Act, despite having initially filed a reference before the Madhya Pradesh Arbitration Tribunal.
The High Court of Madhya Pradesh intervened, quashing the private arbitration proceedings initiated by the appellant, prompting the latter to appeal the decision before the Supreme Court.
Key Findings of the Supreme Court
The Supreme Court, in its judgment dated July 30, 2025, reaffirmed the exclusive jurisdiction of the Madhya Pradesh Arbitration Tribunal for disputes arising from works contracts involving the State or its instrumentalities. The court emphasized the overriding effect of the 1983 Act over the 1996 Act, ruling that private arbitration was impermissible in such cases.
The court observed that the appellant's conduct in withdrawing the reference petition before the Madhya Pradesh Arbitration Tribunal, without seeking liberty to re-agitate the claims, constituted forum shopping. This conduct was aimed at circumventing the statutory mechanism and reviving abandoned claims.
Further, the court noted that the appellant's claims, dating back to events from 2013-2015, were barred by limitation under Section 43 of the 1996 Act, read with the Limitation Act, 1963. The belated invocation of arbitration in 2022 and its continuation in 2025 was deemed time-barred.
Directive for Restoration of Reference Petition
In a bid to ensure justice, the Supreme Court permitted the appellant to seek revival of Reference Petition No.61 of 2018 before the Madhya Pradesh Arbitration Tribunal. The court directed the appellant to file an application to recall the withdrawal order within two weeks, and for the Tribunal to consider the application on its own merits within a further period of two weeks.
If restoration is allowed, the Reference Petition is to be disposed of on merits, in accordance with law, within four months from the date of restoration, ensuring both parties are afforded a reasonable opportunity to be heard.
Implications of the Judgment
This landmark judgment underscores the primacy of the statutory framework established under the Madhya Pradesh Madhyastham Adhikaran Adhiniyam, 1983 for resolving disputes related to works contracts. It serves as a precedent that reinforces the doctrine that parties cannot contract out of statutory obligations enacted in furtherance of public interest.
The decision is expected to streamline dispute resolution processes involving works contracts in Madhya Pradesh, ensuring that such matters are adjudicated by the designated statutory tribunal, thereby enhancing efficiency, uniformity, and accountability in public infrastructure projects.
