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UPP Tollways v. Madhya Pradesh Road Development Corporation case
August 4 , 2025
17 hrs 0 min
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- The dispute arose from a concession agreement dated January 5, 2012, between UPP Tollways Private Limited (Pvt Ltd) and Madhya Pradesh Road Development Corporation (MPRDC).
- It is planned to develop the Umri-Pooph-Pratappur (UPP) Road on a Build-Operate-Transfer (BOT) basis.
- The Supreme Court ruled that safe, well-maintained motorable roads are an essential part of the right to life under Article 21 of the Constitution.
- The Court emphasised the State’s responsibility to develop and maintain roads under its control.
- UPP Tollways challenged the Madhya Pradesh High Court’s quashing of arbitration proceedings initiated under the Arbitration and Conciliation Act 1996.
- The Court has upheld the High Court’s view that disputes under the agreement fall exclusively within the Madhya Pradesh Arbitration Tribunal constituted under the Madhya Pradesh Madhyastham Adhikaran Adhiniyam 1983 (1983 Act).
- The project cost was Rs 73.68 crore, but claims of over Rs 280 crore arose due to delays, redesigns and cost escalations.
- UPP Tollways initially invoked an arbitration through the International Centre for Alternative Dispute Resolution (ICADR) under Clause 44.3.1 of the agreement.
- MPRDC challenged this, saying the dispute must be resolved only by the State’s statutory Arbitration Tribunal.
- The Supreme Court rejected UPP Tollways’ argument that, being a private party, it was not subject to writ jurisdiction when public law is involved.
- The Court ruled that the contracts for State Highways awarded by government-controlled entities involve public functions.
- Clause 44.3.1, providing arbitration under ICADR rules, was held inoperative due to the overriding statutory mandate.
- The concession agreement qualifies as a works contract under the 1983 Act, and monetary claims fall within the Tribunal’s jurisdiction.
- The UPP Tollways had withdrawn a prior reference before the Madhya Pradesh Arbitration Tribunal in 2022 without liberty to revive claims.
- Initiating parallel arbitration under the 1996 Act was held to be impermissible forum shopping, barred by election estoppel and constructive res judicata.
- The Court allowed UPP Tollways to apply for revival of the withdrawn reference within two weeks, with the Tribunal to decide within two weeks and if allowed, the case to be decided within four months.
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