Solid-waste management contract is not a “works contract” under MP law, says Madhya Pradesh High Court; appoints arbitrator under Arbitration Act

Bhopal Municipal Corporation issued an RFP in 2024 for remediation, biomining, processing and disposal of legacy and fresh municipal waste at Adampur Chawni, Bhopal. Susajja JV Anand LLP was declared the successful bidder and the parties executed the contract.

The applicant alleged persistent infrastructural deficiencies at the project site, including defects in the tipping floor, windrow platform, sheds, drainage, internal roads, boundary walls and landfill facilities, as well as a dispute regarding the actual quantity of legacy waste.

The applicant thereafter issued a notice dated 12 February 2026 invoking arbitration under Section 21 of the Arbitration and Conciliation Act, 1996 (“1996 Act”). As no arbitrator was appointed by agreement, it filed the present application under Section 11(6) of the 1996 Act.

1. Whether the contract for waste remediation, processing and disposal, which also involved incidental civil and site-development works, constituted a “works contract” under Section 2(i) of the 1983 Act, thereby attracting the jurisdiction of the Madhya Pradesh Arbitration Tribunal?

2. Whether, notwithstanding the contractual reference to the Tribunal under the 1983 Act, the High Court could appoint an arbitrator under Section 11(6) of the 1996 Act?

The Court applied Sections 11(6), 11(8) and 21 of the Arbitration and Conciliation Act, 1996, concerning appointment of an arbitrator, consent of the proposed arbitrator and commencement of arbitral proceedings through a request for reference.

It considered Sections 2(i) and 3 of the Madhya Pradesh Madhyastham Adhikaran Adhiniyam, 1983, under which the Madhya Pradesh Arbitration Tribunal has jurisdiction only over disputes arising from or connected with a statutory “works contract”.

Relying on Madhya Pradesh Rural Road Development Authority v. L.G. Chaudhary Engineers and Contractors, (2018) 10 SCC 826, the Court considered the statutory character of the Tribunal’s jurisdiction.

It principally relied on Ecogreen Energy Gwalior Pvt. Ltd. v. Municipal Corporation, Gwalior, Civil Appeal No. 4646 of 2026, decided on 21 April 2026, which held that where the dominant purpose of a municipal solid-waste agreement is waste management, incidental civil structures do not convert it into a “works contract” under Section 2(i) of the 1983 Act.

The Court examined the dominant nature and scope of the contract rather than treating the existence of ancillary construction activities as determinative.

Although the contract contemplated certain civil works, including construction connected with waste-management facilities, those works were found to be incidental and ancillary to the principal obligation of remediation, processing and disposal of municipal solid waste.

Applying the reasoning in Ecogreen Energy, the Court held that the agreement did not fall within the statutory definition of a “works contract” under Section 2(i) of the 1983 Act. Consequently, the Madhya Pradesh Arbitration Tribunal lacked jurisdiction under the 1983 Act. However, the contractual dispute-resolution clause demonstrated the parties’ intention to resolve disputes through arbitration.

Shri Sujoy Paul, Former Chief Justice of the Calcutta High Court, was appointed as the sole arbitrator with his consent under Section 11(8) of the 1996 Act.

The arbitration was directed to take place at Jabalpur; the arbitrator was to issue notices and fix the venue, and the parties were directed to deposit fees and charges in accordance with the applicable M.P. Arbitration Centre Rules, 2019. The arbitration case was accordingly disposed of.