IN THE HIGH COURT OF JUDICATURE AT BOMBAY
R.I. Chagla, J.
Microvision Technologies Pvt. Ltd. - Petitioner
Versus
Union of India – Respondent
Review Petition (L) No.36475 of 2022, Notice of Motion No.3 of 2021, Comm. Arbitration Petition (L) No.855 of 2018
Decided On : 24-08-2023
Code of Civil Procedure, 1908 - Order 47 Rule 1, Sections 114 and 151 - Micro, Small and Medium Enterprises Development Act, 2006 - Section 18, (2) - Arbitration and Conciliation Act, 1996 - Section 9, 11(6), (6) (c), 34, 42 - Review of order - Restoration of Commercial Notice of Motion - Petitioner is seeking review of order passed in Commercial Notice of Motion and for restoration of Commercial Notice of Motion – There is an error apparent on face of order as it relies upon Clauses 63 and 64 of arbitration agreement, thereby obliterating non-obstante statutory provision i.e. Section 18 of MSMED Act - Para 40.
Finding of the Court: Under this provision of MSMED Act, jurisdiction to act as an Arbitrator or Conciliator is determined according to where supplier is located - Petitioner being supplier is located at Nashik - Accordingly, District Court, will have jurisdiction with respect to arbitral proceedings and any challenge to Award by way of Petition under Section 34 of Arbitration Act is to be filed before that Court - This material provision was required to be considered in said Order - By overlooking this provision, there is an error apparent on face of said Order - Order passed in Commercial Notice of Motion is reviewed.
Result: Petition disposed of.
ORDER :
1. By this Review Petition, the Petitioner is seeking review of order dated 15th May 2020 passed in Commercial Notice of Motion (L.) No. 2043 of 2019 in Commercial Arbitration Petition (L.) No. 855 of 2018 and for restoration of Commercial Notice of Motion (L.) No. 2043 of 2019 on the file of of this Court. Further, relief is sought for transfer of Commercial Arbitration Petition (L.) No. 855 of 2018 to District Court at Nashik as prayed in Commercial Notice of Motion (L.) No. 2043 of 2019.
2. The Petitioner has filed this application under the provisions of Order 47 Rule 1 read with sections 114 and 151 of Code of Civil Procedure, 1908. The Petitioner had upon being advised filed Commercial Appeal (L.) No. 9465 of 2020 assailing the Order dated 15th May 2020 passed by this Court. Thereafter, upon realizing that said Commercial Appeal was not maintainable, the Petitioner has preferred the present Review Petition for review of the said order dated 15th May 2020. The Commercial (L.) 9465 of 2020 was accordingly withdrawn with liberty to file the present Review Petition which was allowed by Division Bench of this Court vide order dated 22nd November, 2022. Copy of the order has been annexed at Exhibit B to the Review Petition.
3. A brief background of facts is necessary.
4. The Petitioner is a supplier within the meaning of the Micro, Small and Medium Enterprises Development Act, 2006 (“MSMED Act”). The Petitioner had contracts awarded by the Respondent (through Central Railways) for Electrification of Integrated Security System-Video Surveillance System proposed to be implemented by the Central Railways at certain places. Dispute arose between the parties in connection with the contract and which was referred to conciliation under Section 18 (2) of the MSMED Act. Upon failure of conciliation, the Petitioner applied to the Facilitation Council to act under Section 18(3) of the MSMED Act by referring the dispute to the Arbitrator or Institution as provided under the MSMED Act.
5. The Petitioner states that pending the consideration of the Application, the Petitioner moved a Petition under Section 9 of the Arbitration and Conciliation Act, 1996 (“Arbitration Act”) before the District Court at Nashik, seeking interim relief. The Petitioner then moved an application under Section 11(6) of the Arbitration Act before this Court for appointment of an Arbitrator as the Facilitation Council had failed to refer the dispute to an independent Arbitrator or Institution.
6. This Court by an order dated 16th December, 2016 allowed the Application of the Petitioner under Section 11(6) of the Arbitration Act and appointed an Arbitrator to whom the disputes of the parties were referred. Annexed at Exhibit C to the Petition is a copy of the said order dated 16th December, 2016.
7. The Petitioner has thereafter stated that upon the appointment of the Arbitrator, the Petitioner withdrew the Application under Section 9 having regard to Section 9(b) of the Arbitration Act inserted by Act 3 of 2016 with retrospective effect from 25th October, 2015.
8. Thereafter, the arbitration proceedings have been conducted in Mumbai and concluded by Award passed by the Sole Arbitrator. There was certain ambiguity and omission in the Award considering certain points which were referred before the Arbitrator for correction and the corrected Award / Order came to be passed.
9. The Award of the Arbitrator came to be challenged in Commercial Petition (L) No.855 of 2018 along with Notice of Motion filed for condonation of delay.
10. An Application being Notice of Motion No.2043 of 2019 was preferred by the Petitioner in this Court for transfer of Commercial Arbitration Petition to District Court at Nashik on the ground that the initiation of the Arbitration was not in accordance with the Arbitration Agreement but by way of special provisions of Sections 15 to 24 of the MSMED Act. The Petitioner’s contention was that the said provisions of the MSMED Act have overriding effec
Beghar Foundation, thru its Secretary V. Justice K.S. Puttaswamy
Fiza Developers & Inter Trade Pvt. Ltd. Vs. AMCI (India) Pvt. Ltd. & Anr. (2009) 17 SCC 796
The exclusive jurisdiction clause agreed between the parties determines the territorial jurisdiction of the Court to entertain a petition challenging an arbitral award.
The court upheld that statutory remedies under the MSMED Act take precedence over private arbitration agreements, affirming the Facilitation Council’s jurisdiction in disputes involving MSMEs.
The jurisdiction to challenge an award under Section 34 of the Arbitration Act is governed by the exclusive jurisdiction clause in the parties' agreement, not by the MSMED Act.
The exclusive jurisdiction of the court as per the arbitration agreement revives post-award, and failure to follow statutory procedures under the MSMED Act warrants the award's annulment.
Section 34 of the Arbitration Act arises as is evident from sub Section (6) of Section 16 of the Arbitration Act, which inter alia provides that the parties aggrieved by such an arbitral award may ma....
The Micro, Small and Medium Enterprises Development Act, 2006 has overriding effect over the Arbitration and Conciliation Act, 1996 when the jurisdiction of the Council has been invoked, and the Coun....
The Arbitration and Conciliation Act, 1996 is overridden by the MSMED Act, 2006, establishing the jurisdiction of the Facilitation Council for disputes, thereby necessitating adherence to its terms o....
Login now and unlock free premium legal research
Login to SupremeToday AI and access free legal analysis, AI highlights, and smart tools.
Login
now!
India’s Legal research and Law Firm App, Download now!
Copyright © 2023 Vikas Info Solution Pvt Ltd. All Rights Reserved.