Special statutory arbitration survives alongside the 1996 Act, but cancellation disputes fall outside the works-contract reference mechanism.

The Madhya Pradesh Madhyasthan Adhikaran Adhiniyam, 1983 was treated as a special self-contained statutory arbitration regime for disputes arising out of works contracts, and it continued to operate despite the Arbitration and Conciliation Act, 1996 because the later Act saves inconsistent special enactments. The earlier view that the 1983 Act was impliedly repealed was considered per incuriam. However, a dispute over cancellation or termination of a contract, where the works contract had ceased to exist, was held outside the statutory reference mechanism under the 1983 Act. In that situation, appointment of an independent arbitrator under the 1996 Act was sustained.

---

---

Issues: (i) Whether the Madhya Pradesh Madhyasthan Adhikaran Adhiniyam, 1983 continued to govern disputes arising out of works contracts notwithstanding the Arbitration and Conciliation Act, 1996. (ii) Whether a dispute concerning cancellation or termination of a works contract fell within the statutory reference mechanism under the 1983 Act.

Issue (i): Whether the Madhya Pradesh Madhyasthan Adhikaran Adhiniyam, 1983 continued to govern disputes arising out of works contracts notwithstanding the Arbitration and Conciliation Act, 1996.

Analysis: The statutory scheme of the 1983 Act created a special forum for disputes arising out of works contracts and made reference to the Tribunal mandatory. The definition of dispute and works contract, the constitution of the Tribunal, the procedure on reference, the time frame for award, revisional control of the High Court, and ancillary powers showed that the State enactment was a self-contained special law. The Arbitration and Conciliation Act, 1996 applied to other statutory arbitrations only to the extent it was not inconsistent with the other enactment. The earlier view that the 1983 Act stood impliedly repealed where an arbitration clause existed was held to have been rendered in ignorance of the relevant statutory provisions and the binding co-ordinate Bench decision noticing the special features of the State Act.

Conclusion: The 1983 Act was held to survive and operate in Madhya Pradesh for the specified class of works-contract disputes, and the earlier contrary view was treated as per incuriam.

Issue (ii): Whether a dispute concerning cancellation or termination of a works contract fell within the statutory reference mechanism under the 1983 Act.

Analysis: The concurring and partly dissenting opinion accepted that disputes arising from execution of a works contract fall within Section 7, but distinguished disputes where the contract itself had been cancelled and was no longer in existence. On that view, the statutory definition of works contract did not extend to a dispute about cancellation or repudiation of the contract itself, even though such a dispute could be arbitrable under the 1996 Act. Accordingly, the propriety of referring such a dispute to the State Tribunal depended on whether the contract remained operative or had ceased to exist by cancellation.

Conclusion: A dispute arising from cancellation or termination of the works contract was not treated as one required to be referred to the State Tribunal under the 1983 Act on the facts of the case.

Final Conclusion: The appeal was allowed to the extent that the State Act was recognised as governing the relevant class of statutory arbitrations, but the High Court's appointment of an independent arbitrator was sustained in view of the cancellation of the contract and the resulting non-existence of a subsisting works contract for Tribunal reference.

Concurring Opinion: The separate opinion agreed that disputes arising out of execution of a works contract belong before the State Tribunal, but held that a dispute concerning cancellation of the contract itself lies outside Section 7 because the works contract had ceased to exist. On that basis, the High Court's appointment of an arbitrator under the Arbitration and Conciliation Act, 1996 was sustained.

Ratio Decidendi: A special statutory arbitration regime survives alongside the Arbitration and Conciliation Act, 1996 where the later Act itself saves inconsistent or special enactments, and the scope of the statutory reference mechanism is confined to disputes that fall within the defined class of works-contract disputes.

---