1. This section shall govern any controversy or claim to which the Missouri department of transportation is a party that arises out of or relates to a contract awarded pursuant to subdivision (9) of subsection 1 of section 226.130, and the claim exceeds twenty-five thousand dollars, but is less than three hundred twenty-seven thousand dollars as adjusted on an annual basis effective January first of each year in accordance with the Implicit Price Deflator for Personal Consumption Expenditures as calculated pursuant to subsection 5 of section 537.610. Provided a claim has been filed pursuant to the procedures set forth in the Missouri standard specifications for highway construction, or its successor, upon issuance of a final decision as provided in such standards or upon expiration of ninety days from the date the claim was filed, the controversy or claim shall upon written demand by any party to the contract be settled by arbitration administered by the American Arbitration Association under its Construction Industry Arbitration Rules, except as provided herein. The highways and transportation commission shall promulgate rules pursuant to chapter 536, to become effective on or before July 1, 2004, establishing a method for appointment of arbitrators and allowing for the mediation of claims upon agreement of both parties. Judgment upon awards rendered under arbitration shall be entered in the circuit court of Cole County, Missouri.

2. Any contract specification, special provision, contract clause, or rule pertaining to contracts governed by this section, which purports to waive, release or extinguish the rights of a contractor to file a claim, or which purports to bind any court of competent jurisdiction or alternate dispute resolution process to any determinations of fact rendered by the Missouri department of transportation or its employees and agents so as to prevent any such court or alternate dispute resolution process from fully considering the merits of any controversy or claim governed by this section, is against public policy and shall be void and unenforceable.

3. Any rule or portion of a rule, as that term is defined in section 536.010, that is created under the authority delegated in this section shall become effective only if it complies with and is subject to all of the provisions of chapter 536 and, if applicable, section 536.028. This section and chapter 536 are nonseverable and if any of the powers vested with the general assembly pursuant to chapter 536 to review, to delay the effective date, or to disapprove and annul a rule are subsequently held unconstitutional, then the grant of rulemaking authority and any rule proposed or adopted after August 28, 2003, shall be invalid and void.