The Supreme Court on July 30, 2025, delivered a significant judgment in Umri Pooph Pratappur (UPP) Tollways Pvt. Ltd. vs. M.P. Road Development Corporation, emphasizing that private arbitration under the Arbitration and Conciliation Act, 1996 cannot override the statutory forum established under the Madhya Pradesh Madhyastham Adhikaran Adhiniyam, 1983.
The apex court set aside the private arbitration proceedings initiated by UPP Tollways before the ICADR and directed the company to seek revival of Reference Case No. 61 of 2018 before the MP Arbitration Tribunal.
Background of the Dispute
UPP Tollways entered into a Concession Agreement on January 5, 2012, for developing the Umri–Pooph–Pratappur Road under the BOT (Toll + Annuity) model, with an initial cost of ₹73.68 crores. The project faced delays and disputes arose, pushing UPP to file claims worth ₹280.15 crores, alleging losses and escalations due to the respondent’s conduct.
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The appellant first approached the MP Arbitration Tribunal in 2018 but later withdrew the reference and moved for arbitration under the ICADR rules in 2022.
The Madhya Pradesh High Court quashed the ICADR arbitration proceedings on September 9, 2024, holding that disputes arising from a "works contract" involving the state must be resolved exclusively through the MP Arbitration Tribunal.
“Section 7 of the 1983 Act mandates that either party to a works contract shall, irrespective of an arbitration clause, refer disputes to the Tribunal,” the Supreme Court reiterated.
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- Private Arbitration Not Maintainable:
The Court held that the concession agreement qualifies as a “works contract,” and such disputes fall under the MP Arbitration Tribunal’s exclusive jurisdiction under Section 7 of the 1983 Act. - Statutory Forum Cannot Be Overridden:
Even if both parties agree to arbitration under the 1996 Act, the statutory mandate prevails. - Withdrawal Without Liberty Is Final:
Since UPP withdrew its case in 2023 without seeking leave to refile, it lost the right to initiate fresh proceedings elsewhere. - Doctrine of Election Applies:
Parallel invocation of remedies is impermissible. Once the statutory route was chosen, switching to private arbitration was not legally tenable. - Writ Petition Maintainable:
The Court clarified that a State entity can approach the High Court under Article 226 to prevent evasion of statutory adjudication mechanisms.
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“The conduct of the appellant in forum shopping and reviving barred claims is tainted with mala fides,” the Court noted.
Despite the procedural lapse, the SC allowed UPP Tollways to apply for recall of the withdrawal order before the MP Arbitration Tribunal within two weeks. The Tribunal has been directed to decide the restoration application within another two weeks, and if allowed, dispose of the matter within four months.
Case Name: Umri Pooph Pratappur Tollways Pvt. Ltd. vs. M.P. Road Development Corporation Ltd. (Civil Appeal No. 5649 of 2024)
