IMPORTANT POINT
The arbitration agreement's designation of venue and exclusive jurisdiction prevails over statutory arbitration under the MSMED Act, and the statutory arbitration does not override the parties' agreement.

JUDGMENT :

Moushumi Bhattacharya, J.

1. The petitioner/award-debtor prays for stay of operation and setting aside of an arbitral award dated 18.10.2022 passed by the West Bengal Micro Small Enterprises Facilitation Council. The impugned award was based on a claim of the respondent no. 1 against the petitioner in a reference made before the Facilitation Council under the provisions of The Micro, Small and Medium Enterprises Development (MSMED) Act, 2006.

2. The respondent no. 1/award-holder raises a preliminary objection to the application on the ground that the Calcutta High Court does not have territorial jurisdiction to entertain the application for stay and setting aside of the award. The respondent’s argument is premised on the fact that the office of the MSME Council was only the venue for the arbitration and that the dispute resolution clause provides for conciliation and arbitration to be conducted at Bhubaneswar. Learned counsel places the other clauses of the agreement executed between the parties to urge that the parties agreed that the Courts of Odisha shall have exclusive jurisdiction for any disputes, differences and claims arising out of the agreement. Counsel submits that the venue of the arbitration i.e. office of the MSME Council cannot be read as the seat for the purpose of the arbitration proceedings. Counsel submits that in the absence of the arbitration clause the parties would have to fall back on the exclusive jurisdiction clause which has not been waived by the parties.

3. Learned counsel appearing for the petitioner/award-debtor urges that although the arbitration agreement contemplates the venue to be at Bhubaneswar with exclusive jurisdiction conferred to the Courts of Bhubaneswar, the respondent no. 1 by-passed the arbitration agreement by taking recourse to the provisions of the MSMED Act, 2006. Counsel submits that the petitioner invoked section 18(4) of the said Act and the statutory arbitration under that section decides the seat of the arbitration. Counsel relies on section 24 of the MSMED Act to argue that the arbitration agreement entered into between the parties was superseded by operation of section 18 of the MSMED Act. It is submitted that once the respondent gave a go-by to the arbitration agreement and availed of the statutory dispute resolution mechanism under the MSMED Act, 2006, the respondent cannot be permitted to go back to the arbitration agreement which the respondent waived by electing the statutory remedy under the MSMED Act.

4. The dispute resolution clause is contained in an agreement for Design, Supply, Installation, Commissioning of local area network and post implementation support at “OPGC-CC/2016/01” dated 20.01.2016 between the petitioner and the respondent for implementing the services to be provided by the respondent to the petitioner. Clause 9.27 of the agreement contains the dispute resolution clause. Clause 9.27.2 provides for conciliation between the parties and clause 9.27.3 provides for Arbitration. The relevant part of the Arbitration clause is set out below:

“All proceedings shall be conducted, including all documents presented in such proceedings, in the English language. The venue of arbitration shall be at Bhubaneswar only and jurisdiction for any proceedings arising out of or concerning or connected with such arbitration shall be exclusively of appropriate Court at Bhubaneswar under the jurisdiction of Odisha High Court. For all disputes, appropriate Court at Bhubaneswar under the jurisdiction of Odisha High Court alone shall have exclusive jurisdiction in all matters arising under this Agreement.”

5. Clause 9.36(2) further provides for a general exclusive jurisdiction clause, the relevant part of which is set out below:

“The Venue & the Owner agree that the Courts of Odisha shall have the exclusive jurisdiction for any and all disputes, differences and claims arising out of, regarding or in relation to this Agreement or any work issued hereunder.”

6. The above cl