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V. KAMESWAR RAO, ANOOP KUMAR MENDIRATTA
Ircon International Limited – Appellant
Versus
Pioneer Fabricators Pvt. Ltd. – Respondent
JUDGMENT
V. Kameswar Rao, J. The present Appeal has been filed by the appellant herein against the order dated November 29, 2022 passed by the District Judge (Commercial Court), Shahdara, Karkardooma Delhi, rejecting the petition filed by the appellant under section 19 of the Micro, Small, and Medium Enterprises Development Act, 2006 (`MSMED Act') read with Section 34 of the Arbitration and Conciliation Act, 1996 (`Act of 1996'). The appellant has specifically prayed for the following reliefs through this instant petition:
"In the premises, aforesaid, the Appellant prays that this Hon'ble Court may be pleased to:
1. May call for the records of the OMP (COMM) 01 of 2022 lying in the court of Ld. District Judge (Commercial Court) 04, Shahdara, Karkardooma Delhi;
2. And may set aside the impugned order dated 29.11.2022 passed in OMP (COMM) No. 01 of 2022.
3. And may make any such other and further Orders as it may deem fit"
2. The facts which led to the filing of the present appeal are as follows:
2.1. It is stated that the appellant issued Purchase Order dated September 25, 2013 to the respondent for Supply, Erection, testing & commissioning of 02 nos. 20 MT Mounded underground LPG Stora
The exclusive jurisdiction clause agreed between the parties determines the territorial jurisdiction of the Court to entertain a petition challenging an arbitral award.
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.
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....
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.
Important Point : The court established that statutory remedies must be exhausted before invoking writ jurisdiction against awards under the MSMED Act.
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