If ND beats NW and NW finds it's way into the Big 10 title game (a distinct possibility), there is no way the committee can pick the winner of a Michigan/NW conference title game over a a one loss ND team (depending on the nature of the ND loss ) that beat both of them and maintain a shred of credibility.
I really don't think it will come down to that as they will find another way to overcome such quandary, i.e. perhaps a 1 loss Oklahoma.