Court's Jurisdiction U/S 34 Of Arbitration Act Against Award Under MSMED Act Is Determined By Agreement Between Parties: Gujarat HC
4 days, 18 hours ago

Court's Jurisdiction U/S 34 Of Arbitration Act Against Award Under MSMED Act Is Determined By Agreement Between Parties: Gujarat HC

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The Gujarat High Court bench of Mrs. Chief Justice Sunita Agarwal and Mr.Justice Pranav Trivedi of has held that the jurisdiction of the Court to hear the application under Section 34 of the Arbitration Act' 1996 as to challenge the award passed under Section 18 of the MSMED Act' 2006, would be governed by the agreement between the parties which has conferred exclusive jurisdiction to a particular Court. While relying on the Bombay High Court judgment, it was submitted that the application under Section 34 of the Arbitration Act' 1996 to challenge the award passed under Section 18 of the MSMED Act' 2006 would be covered by the agreement between the parties which has conferred exclusive jurisdiction to a particular Court, and would not lie to the Court at a place where award has been passed under Section 18 of the MSMED Act' 2006 which is guided by the location of the supplier. Having noted the scheme of both the Acts, the court observed that “once the challenge is put forth before the Court defined in Section 2 of the Arbitration Act, 1996 by making pre-requisite deposit as per Section 19 of the MSMED Act' 2006, the interplay between the MSMED Act' 2006 and the Arbitration Act' 1996 would come to an end.” It further observed that The Legislature which fixes the jurisdiction of the MSME Facilitation Council by virtue of sub-section of Section 18, has not prescribed any provision dealing with the jurisdiction of the Courts entertaining application for setting aside any decree, award or other order made either by the Council itself or by any institution or center referred to by the Council, in view of the fact that the provisions of the Arbitration and Conciliation Act, 1996 are applicable at both the stages of making of the award and post-passing of the award. “The only mode and manner of referring the dispute for conciliation and arbitration and appointment of an arbitrator in case of disagreement between the parties, as governed by the Arbitration Act' 1996 has been replaced by the statutory scheme of the MSMED Act' 2006.” the court added Based on the above, the court observed that the contention of the learned counsel for the respondent that by virtue of the overriding effect of sub-section of Section 18 read with Section 24 of the MSMED Act' 2006, the juridical seat of arbitration proceedings has been fixed and it would result in exclusion of the jurisdiction of the Civil Court anywhere else in India where cause of action for adjudication of the dispute lies, is untenable.

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