Mandate Of Facilitation Council Is Not Terminated Even If It Fails To Render Award Within 90 Days U/S 18(5) Of MSME Act: Bombay High Court

The Bombay High Court bench of Justice Somasekhar Sundaresan has held that the mandate of the MSME Facilitation Council (Council) cannot be terminated merely on the ground that it failed to render an award within 90 days under section 18(5) of the Micro, Small and Medium Enterprises Development Act, 2006 (“MSME Act”) from the date of entering reference as this time period is directory in nature. Brief Facts: In this Petition under Section 34 of the Arbitration and Conciliation Act,...

Violation Of Provisions Of Arbitration Act Or MSMED Act Can Be Adjudicated By Court U/S 34 Of Arbitration Act: Orissa High Court

An Orissa High Court bench of Justice K.R. Mohapatra has dismissed a writ petition upon holding that the petitioner, without availing the efficacious statutory remedy u/s 34 of the Arbitration Act had approached the Court under Articles 226 and 227 of the Constitution for which the Court was not inclined to exercise its discretionary power to entertain it.Additionally, the court held that violation of any provisions of the Arbitration Act and/or the MSMED Act can be effectively adjudicated...

MSMED Act | Is Writ Maintainable Against MSEFC Award? Can MSEFC Members Act As Arbitrators ? Supreme Court Refers To Larger Bench

The Supreme Court today (Jan. 22) opined that the party aggrieved by an order/award of the Micro and Small Enterprises Facilitation Council (MSEFC) passed under Section 18 of the Micro, Small, and Medium Enterprises Development Act, 2006 (“MSME Act”) can file a writ petition under Article 226 of the Constitution before the High Court. However, upon noting that a contrary view was expressed in the previous ruling delivered by a coordinate bench in M/s India Glycols Limited and Another v. Micro...

Can Unregistered MSMEs Avail Dispute Settlement Under S.18 MSMED Act? Supreme Court Refers To Larger Bench

The Supreme Court today (Jan. 10) observed that for invoking the payment dispute resolution mechanism under Section 18 of the Micro, Small and Medium Enterprises Development Act, 2006 (MSMED Act), it is not mandatory for the MSMEs to have prior registration under Section 8 of MSMED Act i.e., filing of an Entrepreneur's Memorandum.Rejecting the argument that only registered enterprises at the time of contract formation are eligible to invoke payment dispute resolution mechanism, the Court...

Court's Jurisdiction U/S 34 Of Arbitration Act Against Award Under MSMED Act Is Determined By Agreement Between Parties: Gujarat HC

The Gujarat High Court bench of Mrs. Chief Justice Sunita Agarwal and Mr.Justice Pranav Trivedi of has held that the jurisdiction of the Court to hear the application under Section 34 of the Arbitration Act' 1996 as to challenge the award passed under Section 18(4) of the MSMED Act' 2006, would be governed by the agreement between the parties which has conferred exclusive jurisdiction to a particular Court. Brief Facts The present appeal is directed against the judgment and order...

Writ Jurisdiction Cannot Be Invoked To Challenge Arbitral Award, Only To Circumvent Statutory Requirement Of S.19 Of MSMED Act: Delhi High Court

The Delhi High Court bench of Justice Sanjeev Narula, while hearing a writ petition challenging an arbitral award passed by the Micro and Small Enterprises Facilitation Council (MSFEC), has held that invoking the writ jurisdiction to challenge an arbitral award would circumvent the statutory requirement of pre-deposit u/s 19 of the MSMED Act, and would amount to defeating the legislative intent. Submissions: The senior counsel for the Petitioner made the following submissions: A...

MSME Council Award Can Be Challenged Only U/S 34 Of Arbitration Act, Not Under Articles 226 Or 227: Orissa High Court

The Odisha High Court bench of Chief Justice Chakradhari Sharan Singh and Justice Murahari Sri Raman has upheld that an arbitral award passed by the Micro and Small Enterprises Facilitation Council (MSEFC) could only be challenged in accordance with Section 34 of the Arbitration and Conciliation Act, 1996, as mandated by Section 19 of the MSMED Act. The court held that the Single Judge had rightly declined to entertain the challenge to the award under Article 226/227 of the Constitution,...

Arbitrator Nominated U/S 18(3) MSMED Act Erred In Deciding Merits After Finding Respondent Was Not MSME: Madras HC Upholds Setting Aside Of Award

The Madras High Coury bench of Justices R. Suresh Kumar and C. Saravanan has held that an Arbitrator ought not to decide the case on merits after coming to a conclusion that the respondent was not a Micro, Small, and Medium Enterprise (MSME) and therefore not entitled to invoke the machinery under the Micro, Small and Medium Enterprises Development (MSMED) Act, 2006. The court upheld the setting aside of the award passed by the Arbitrator.Brief Facts M/s. Sunwin Papers (Respondent)...

Application U/S 34 Of Arbitration Act To Challenge Award Passed U/S 18(4) Of MSMED Act Is Governed By Agreement Between Parties: Bombay HC

The Bombay High Court Bench of Justice Jitendra S. Jain And M.S. Sonak, held that the jurisdiction of the Court to hear the application under Section 34 of the Arbitration and Conciliation Act, 1996 (Arbitration Act) to challenge the award passed under Section 18(4) of the MSMED Act would be governed by the agreement between the parties which has conferred exclusive jurisdiction to a particular Court. In this case, a case was referred to the High Court to resolve the conflict between two...

"Any Objection Regarding Non-Applicability Of MSMED Act Can Be Decided By Arbitral Tribunal U/S 16 Of A&C Act": Delhi High Court

The Delhi High Court division bench of Chief Justice Manmohan and Justice Tushar Rao Gadela, while hearing an appeal, has upheld the order passed by a single-judge bench wherein it was held that the question of whether an entity was an MSME at the relevant time was to determined by the tribunal under section 16 of A&C Act and not the writ court. Facts Overview: GAIL issued a tender for the service of HDD works at Kochi, Koottanad, Banglore, Manglore, Phase II Section ...

Application Of MSMED Act And Arbitral Tribunal's Jurisdiction Over Contractual Disputes Must Be Determined By Arbitral Tribunal,Not By Court In Writ Jurisdiction: Delhi High Court

The Delhi High Court has clarified the legal position of the intersection between the Micro, Small and Medium Enterprises Development Act, 2006 (MSMED Act) and the Arbitration and Conciliation Act, 1996. The bench of Justice Sanjeev Narula, while hearing a petition filed under Article 226 of the Constitution, seeking to quash a notice requesting the parties to file their Statement of Claims (SoC) and subsequent communications, has clarified the legal position concerning the period of...

90-Day Timeline In Section 18(5) Of MSME Act Is Directory : Calcutta High Court

The Calcutta High Court bench comprising Justice Sabyasachi Bhattacharyya has held that the 90-day timeline for completion of the arbitral proceeding under Section 18(5) of the Micro, Small and Medium Enterprises Development Act, 2006 (MSME Act) is directory, not mandatory, and does not terminate or affect the validity of mandate of the MSME Facilitation Council as Arbitrator. It further held that the Court does not have jurisdiction to substitute the Council or its nominee by another...