The High Court affirmed the exclusive jurisdiction of the Madhya Pradesh Arbitration Tribunal over disputes arising from a works contract, asserting arbitration clauses cannot override statutory mandates.

JUDGMENT :

R. MAHADEVAN, J.

1. Leave granted.

2. This appeal has been preferred against the final judgment and order dated 09.09.2024 passed by the High Court of Madhya Pradesh at Jabalpur¹ [Hereinafter referred to as “the High Court”] in Writ Petition (Civil) No. 14569 of 2022 filed by Respondent No. 1-Madhya Pradesh Road Development Corporation. By the impugned judgment, the High Court allowed the writ petition and quashed the orders dated 02.06.2022 and 07.06.2022 passed by the International Centre for Alternative Dispute Resolution² [For short “ICADR”] Respondent No. 2 and the Arbitral Tribunal, respectively. For ease of reference, the orders impugned in the writ petition, are extracted below:

Order dated 02.06.2022 passed by the ICADR

“......

The ICADR has made thorough examination of all the points of the Claimant and Respondent including the aforesaid nine attachments with email dated 24.05.2022 and due deliberation and consideration of all the points raised by both the Claimant and Respondent particularly Arbitration Agreement, the judgment in Writ Petition No. 11783/2021 dated 03.09.2021 and Orders sheets of Madhyastham Adhikaran at Bhopal and it has come to the following conclusions:

1. ICADR is the proper forum for the arbitration of disputes arising out of execution of Concession Agreement dated 05.01.2012 between M/s. Umri Pooph Pratappur Tollway Private Limited and Madhya Pradesh Road Development Corporation Ltd. and the same can be ascertained from Arbitration Agreement incorporated in Article 44.3.1 and 44.3.2.

2. The Judgment in Writ Petition N?. 11783/2021 dated 03.09.2021 gives clear finding that ICADR is the proper forum for Arbitration of dispute arising from the Concession agreement dated 05.01.2012.

3. In view of and from the orders sheets of Madhyastham Adhikaran at Bhopal, it is ascertained that the Madhyastham Adhikaran at Bhopal has not entered upon reference of the arbitration and therefore not in seisin of the aforementioned arbitrable disputes.

Therefore, in view of Rule 5(2) of the ICADR ARBITRATION RULES , 1996, inter alia, provides that where a party fails to appoint an arbitrator within 30 days from the receipt of a request to do so from the other party, the appointment shall be made upon request of the party, by ICADR. However, in view of Reply of MPRDCL vide letter No. 2941/83/BOT/MPRDC Bhopal dated 13.05.2022 to Arbitration Notice dated 06.05.2022 of the Claimant whereby the Respondent has declined to nominate their Arbitrator, hence, ICADR need not wait for expiry of 30 days.

Since the Respondent has failed to appoint their arbitrator in terms of clause 44.3.1 of the Agreement, now, therefore, I, R.K. Rathore, Secretary General of the International Centre for Alternative Dispute Resolution (ICADR), in exercise of the powers vested in me under Rule 5(2) read with Rule 35(3) of ICADR ARBITRATION RULES , 1996, do hereby appoint the following arbitrator on the behalf of Respondent:

Shri Jagdish Prasad Shukla, IRSE (Retd.)

Former Principal Engineer/Northern Railway Chief Managing Director/Rail Vikas Nigam Ltd. & Member Administration/Central Administrative Tribunal Add: 501, Ridgewood, Omaxe Forest Sector-92, Noida.

Cell No. 9958998686

E-mail: jpshukla46@gmail.com

The two appointed arbitrators will select the third Arbitrator, i.e. Presiding Arbitrator, as provided in clause 44.3.2 of the above mentioned Agreement.”

Order dated 07.06.2022 passed by the Arbitral Tribunal

“......

Notice for preliminary hearing

(1) The Concessionaire/