The existence of an arbitration agreement is essential for invoking jurisdiction under Section 11(6) of the Arbitration Act.

JUDGMENT

Navin Chawla, J. (Oral)--This petition has been taken up today for hearing as 09.03.2023 was declared as a Court holiday.

2. This petition has been filed under Section 11 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as the `Arbitration Act.) seeking appointment of an Arbitrator for adjudicating the disputes that have arisen between the parties in relation to the Purchase Orders that were placed upon the petitioner by the respondent.

3. Admittedly, there is no Arbitration Agreement in writing between the parties contained either in the Purchase Orders or otherwise.

4. The petitioner being aggrieved of the non-payment of its alleged dues by the respondent, invoked the procedure under Section 18(1) of the Micro, Small & Medium Enterprises Development Act, 2006 (hereinafter referred as to the `MSMED Act.) before the Micro, Small & Medium Enterprises Facilitation Council, District North-West, Delhi (hereinafter referred to as the `Facilitation Council.).

5. The conciliation proceedings before the Facilitation Council failed on 20.05.2022. The Facilitation Council, however, refused to act as an Arbitrator or refer the disputes to an institution for appointment of an Arbitrator, observing as under:

"Respondent informed that the company is under insolvency and the matter is before NCLT Principal Bench. Since the matter is pending in NCLT, Claimant may take action as per provisions of NCLT Act. No purpose will be served in keeping the case pending in this council. Hence the case is closed."

6. The petitioner is aggrieved of the above order. It is the case of the petitioner that though proceedings under the Insolvency and Bankruptcy Code, 2016 (in short, `the Code.) have been filed against the respondent and are pending adjudication, the same have not been admitted and, therefore, the moratorium as contemplated under Section 14 of the Code has not kicked in against the respondent. The learned counsel for the petitioner submits that, therefore, the refusal of the Facilitation Council to act as an arbitrator or to refer the dispute to an institution for the appointment of an arbitrator was incorrect and based on fallacious grounds.

7. On the other hand, the learned counsel for the respondent, though admitting that there moratorium has not been declared for the respondent company as the petitions under the Code have yet not been admitted against the respondent company by the learned National Company Law Tribunal, submits that the present petition is not maintainable under Section 11 of the Arbitration Act as there is no Arbitration Agreement between the parties as required in Section 7 of the Arbitration Act. He submits that Section 11 of the Arbitration Act can be invoked only where there exists an arbitration agreement between the parties.

8. In rejoinder, the learned counsel for the petitioner submits that in terms of Section 18(3) of the MSMED Act, the provisions of the Arbitration Act are to be applied as if the arbitration was in pursuance of an arbitration agreement referred to in Section 7(1) of the Arbitration Act. He submits that, therefore, Section 11(6)(c) of the Arbitration Act would apply on the failure of the Facilitation Council to act as an arbitrator or to refer the dispute to an institution or centre for arbitration, and the petitioner has rightly invoked the remedy there-under.

9. I have considered the submissions made by the learned counsels for the parties.

10. As noted hereinabove, admittedly there is no arbitration agreement between the parties as contemplated under Section 7 of the Arbitration Act. Section 18(3) of the MSMED Act reads as under:

"18. Reference to Micro and Small Enterprises Facilitation Council.-

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(3) Where the conciliation initiated under sub-section (2) is not successful and stands terminated without any settlement between the parties, the Council shall either itself take up the dispute for arbitration or refer to it any institution or centre providing al