Petitioners must exhaust contractual remedy under Clause 71 before approaching court for contract disputes over Rs. 10 crore

MP HC held that petitioners must first exhaust contractual remedy under Clause 71 before approaching court. The clause mandates disputes in contracts valued over Rs. 10 crore be referred to Dispute Resolution Board prior to arbitration under Clause 70. Court rejected petitioners' argument that Board constitution required their consent. Respondents directed to constitute Board within one month, with Board to render decision within three months after hearing both parties. Petition disposed of as alternative efficacious remedy available.

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Issues:
1. Whether an efficacious alternative remedy is available to the petitioners in a contractual disputeRs.
2. Interpretation of Schedule A Notes in the agreements regarding GST reimbursement/refund.

Issue 1:
The judgment addresses the primary issue of whether an alternative remedy is available to the petitioners in a contractual dispute. The petitioners argued that despite the provision of alternative remedies in the contract, the court should entertain the writ petitions directly due to the absence of dispute resolution. The respondents contended that the contract provides for a Dispute Resolution Board and arbitration as alternative remedies. The court examined the relevant clauses in the contract, specifically Clause 39 of the Special Conditions and Clauses 70 and 71 of the General Conditions. It was highlighted that Clause 71 mandates the referral of disputes to the Dispute Resolution Board before arbitration if the contract value exceeds a specified amount. The court ruled that the remedy before the Dispute Resolution Board must be exhausted first. As the work awarded to the petitioners was ongoing, the court directed the respondents to constitute a Dispute Resolution Board within a month and provide a verdict within three months after hearing both parties.

Issue 2:
The second issue pertains to the interpretation of Schedule A Notes in the agreements concerning GST reimbursement/refund. The petitioners argued that the Schedule A Notes clearly state that the effect of GST shall be included in the quoted rates, and no reimbursement or refund on this account shall be admissible. The respondents, however, opposed this argument, emphasizing the terms of the contract. The court declined to delve into the interpretation of the Schedule A Notes, as the primary issue of alternative remedy availability needed resolution first. However, the court allowed both parties to present their arguments regarding the interpretation of the corrigendums before the Dispute Resolution Board. This issue was not conclusively decided in the judgment due to the prioritization of the alternative remedy aspect.

In conclusion, the High Court of Madhya Pradesh addressed the issues raised in the writ petitions comprehensively. The judgment highlighted the importance of exhausting alternative remedies provided in the contract before resorting to court intervention. While the interpretation of the Schedule A Notes regarding GST reimbursement/refund was not directly resolved, the court allowed for further arguments on this matter before the Dispute Resolution Board. The detailed analysis and direction provided by the court ensure a structured approach to resolving the contractual dispute between the parties involved.

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