Case Note & Summary
The Bombay High Court dismissed two writ petitions filed by M/s. MEP RGSL Toll Bridge Pvt. Ltd. and Raima Toll & Infrastructure Pvt. Ltd., both special purpose vehicles of MEP Infrastructure Developers Limited, seeking a direction to the Maharashtra State Road Development Corporation (MSRDC) to provide for arbitration regarding disputes arising from expired toll collection contracts. The petitioners had entered into separate toll collection agreements with MSRDC, which had long expired. The first petition sought a declaration that Clause 36 of the agreement dated 29 January 2014 constituted an arbitration agreement, and both petitions sought a writ directing MSRDC to refer disputes to arbitration. The court examined Clause 36, which provided for dispute resolution through a committee and then arbitration only if the committee failed to resolve the dispute. The court held that Clause 36 did not constitute an arbitration agreement as defined under Section 7 of the Arbitration and Conciliation Act, 1996, which requires an agreement in writing signed by the parties. The court further held that Article 226 of the Constitution cannot be invoked to direct a party to agree to arbitration or to enforce a contractual arbitration clause, as arbitration is a consensual process. The court noted that the contracts had expired and no arbitration agreement existed. The petitions were dismissed as not maintainable, with no order as to costs.
Headnote
A) Arbitration Law - Existence of Arbitration Agreement - Clause 36 of Agreement - Clause 36 of the agreement dated 29 January 2014 between the petitioner and MSRDC provides for dispute resolution through a committee and then arbitration only if the committee fails, but does not contain an arbitration agreement as defined under Section 7 of the Arbitration and Conciliation Act, 1996 - Held that Clause 36 is not an arbitration agreement and the court cannot direct arbitration under Article 226 (Paras 1-56). B) Constitutional Law - Writ Jurisdiction - Article 226 of the Constitution of India - Direction to Provide Arbitration - The petitioners sought a writ directing MSRDC to provide for arbitration, which is a contractual remedy - Held that Article 226 cannot be invoked to enforce a contractual arbitration clause or to direct a party to agree to arbitration, as arbitration is a consensual process (Paras 1-56). C) Contract Law - Toll Collection Contracts - Expired Contracts - The toll collection contracts between the petitioners and MSRDC had expired - Held that no relief can be granted under Article 226 for disputes arising from expired contracts where no arbitration agreement exists (Paras 1-56).
Issue of Consideration
Whether Clause 36 of the agreement dated 29 January 2014 constitutes an arbitration agreement; whether the High Court under Article 226 can direct the respondent to provide for arbitration; whether the writ petitions are maintainable for such relief.
Final Decision
Both writ petitions are dismissed. No order as to costs.
Law Points
- Arbitration agreement must be in writing and signed by parties
- Court cannot direct arbitration under Article 226 in absence of arbitration agreement
- Clause 36 of agreement is a dispute resolution clause but not an arbitration agreement
- Writ petition not maintainable for enforcement of contractual arbitration clause after contract expiry
