MP RURAL ROAD DEVELOPMENT AUTHORITY & ANR. versus M/S. L.G. CHAUDHARY ENGINEERS & CONT.

MP RURAL ROAD DEVELOPMENT AUTHORITY & ANR. versus M/S. L.G. CHAUDHARY ENGINEERS & CONT.

The provisions of the Madhya Pradesh Arbitration Tribunal Act, 1983 are special and saved by Section 2(4) of the Arbitration and Conciliation Act, 1996, thus, disputes concerning execution of works contracts must be referred to the Tribunal under the MP Act, 1983. However, disputes relating to termination or cancellation of the works contract are not included under the MP Act's definition, and thus may be referred to an arbitrator appointed under the Arbitration and Conciliation Act, 1996. Due to divergence of views, the matter is referred to a larger bench.

Parties
Appellant: MP Rural Road Development Authority; Respondent: M/S. L.G. Chaudhary Engineers & Cont.
Jurisdiction
India
Judgment Date
24 January 2012
Procedural Posture
Civil Appeal / Referred to Larger Bench
Outcome
Matter referred to larger Bench
Legal Topics
Statutory Arbitration Vs Contractual Arbitration, Repugnancy Under Article 254(2) of Constitution, Jurisdiction of Arbitration Tribunal, Interpretation of Works Contract
Arbitration Law Contract Law Statutory Interpretation Statutory Arbitration Vs Contractual Arbitration Repugnancy Under Article 254(2) of Constitution Jurisdiction of Arbitration Tribunal Interpretation of Works Contract

Case Brief

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Parties

MP Rural Road Development Authority

Appellant

M/S. L.G. Chaudhary Engineers & Cont.

Respondent

Procedural Posture

Civil Appeal / Referred to Larger Bench

Legal Issues

  1. 1 Whether the Madhya Pradesh Arbitration Tribunal Act, 1983 continues to operate for Works Contract disputes after the enactment of the Arbitration and Conciliation Act, 1996
  2. 2 Whether disputes arising from cancellation or termination of works contracts fall within the ambit of 'works contract' under Section 2(i) of the MP Act, 1983
  3. 3 Whether Section 7 of MP Act, 1983 mandates reference of disputes to the Tribunal irrespective of arbitration agreement

Ratio Decidendi

The provisions of the Madhya Pradesh Arbitration Tribunal Act, 1983 are special and saved by Section 2(4) of the Arbitration and Conciliation Act, 1996, thus, disputes concerning execution of works contracts must be referred to the Tribunal under the MP Act, 1983. However, disputes relating to termination or cancellation of the works contract are not included under the MP Act's definition, and thus may be referred to an arbitrator appointed under the Arbitration and Conciliation Act, 1996. Due to divergence of views, the matter is referred to a larger bench.

Court Disposition

Matter referred to larger Bench

Orders

  • Judgment of High Court set aside, but due to divergence of views, matter placed before Chief Justice for constituting larger Bench.
  • No order as to costs.