JUDGMENT :

PRATEEK JALAN, J.

1. The present petition under Section 34 of the Arbitration and Conciliation Act, 1996 [“the Arbitration Act”], is directed against an award rendered by the Micro and Small Enterprises, Facilitation Council, Nagpur in a claim lodged by the respondent No. 1 against the petitioner claiming to be a Micro and Small Enterprise.

2. Although respondent No. 1 is unrepresented today, I find that an objection on the ground of territorial jurisdiction is taken in the reply filed by respondent No. 1. At my request, Mr. Shashank Garg, learned counsel for the petitioner, has addressed on this aspect, particularly keeping in view the judgment of the Supreme Court in Gujarat State Civil Supplies Corporation Limited vs. Mahakali Foods (P) Ltd., Arising out of SLP(C) No. 12884/2020.

3. The disputes between the parties arise out of a Purchase Order dated 22.05.2010 (at page 63 of the petitioner’s list of documents) [“the Purchase Order”]. Clause 8 of the Purchase Order provides as follows: -

“All disputes are subject to Delhi Jurisdiction.”

4. Although the Purchase Order does not contain an arbitration clause, the claims of respondent No. 1 herein were referred for conciliation and arbitration to the Facilitation Council under Section 18 of the Micro, Small and Medium Enterprises Development Act, 2006 [“MSMED Act”]. Section 18(4) of the MSMED Act provides as follows: -

“18. Reference to Micro and Small Enterprises Facilitation Council.

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(4). Notwithstanding anything contained in any other law for the time being in force, the Micro and Small Enterprises Facilitation Council or the centre providing alternate dispute resolution services shall have jurisdiction to act as an Arbitrator or Conciliator under this section in a dispute between the supplier located within its jurisdiction and a buyer located anywhere in India.”

5. By virtue of this provision, the Facilitation Council in Nagpur, where respondent No. 1 is located, assumed jurisdiction and rendered the award.

6. The objection taken by respondent No. 1 is that the arbitration having been conducted under the MSMED Act in Nagpur and the award having been rendered in Nagpur, the seat of the arbitration in the present case was in Nagpur and, therefore, the challenge to the award would not lie before this Court.

7. It is noted in order dated 06.04.2022 that Mr. Garg sought to support the jurisdiction of this Court by reference to a judgment of the Division Bench of this Court in Indian Oil Corporation Ltd. vs. FEPL Engineering (P) Ltd., Judgment dated 26.09.2019 in FAO(OS)(COMM) 92/2019. In the said judgment, the Division Bench was concerned with a contract which contained an arbitration clause and a jurisdiction clause. The Division Bench found that these clauses constituted New Delhi as the venue of arbitration and also conferred exclusive jurisdiction upon the Courts in New Delhi. The Court held that, by virtue of Section 18(4) of the MSMED Act, the arbitration was, in fact, conducted by a Facilitation Council outside Delhi, but the said provision would have the effect of shifting the venue of the arbitration and not its seat. The observations of the Division Bench in paragraphs 20 and 23 of the aforesaid decision are relevant, and are reproduced below: -

“20. In the present case, both the VENUE as well as the SEAT (by way of the jurisdiction clause) has been agreed to be at New Delhi. We, therefore, have no hesitation to say that the Courts at Delhi would have the jurisdiction to entertain the petition challenging the award passed by the MSME Council. Since the parties agreed to confer exclusive jurisdiction to Courts at New Delhi, notwithstanding the fact that the purchase order in question dated 10th March 2016, was issued by the Petitioner from its Vadodra Office to the Respondent at Navi Mumbai, and even if no cause of action has arisen in Delhi, the Courts of Delhi would have jurisdiction to entertain the petition under Section 34 of the Arbitration Act. Th