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Challenging an Arbitration Award – Jurisdiction Under MSMED Act

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๐ƒ๐ž๐œ๐ข๐ฌ๐ข๐จ๐ง ๐จ๐ง ๐ฃ๐ฎ๐ซ๐ข๐ฌ๐๐ข๐œ๐ญ๐ข๐จ๐ง ๐ญ๐จ ๐œ๐ก๐š๐ฅ๐ฅ๐ž๐ง๐ ๐ž ๐š๐ง ๐š๐ซ๐›๐ข๐ญ๐ซ๐š๐ญ๐ข๐จ๐ง ๐š๐ฐ๐š๐ซ๐ ๐ฉ๐ซ๐จ๐ง๐จ๐ฎ๐ง๐œ๐ž๐ ๐ฎ๐ง๐๐ž๐ซ ๐Œ๐’๐Œ๐„๐ƒ ๐€๐œ๐ญ (Delhi High Court)

Delhi Tourism And Transportation Development Corporation Vs M/s. Satinder Mahajan (May 2024)

The parties to dispute entered into a construction contract. Later, the Contractor (Respondent) to recover the outstanding payments approached the MSE Facilitation Council, Pathankot under MSMED Act. ย 

The petitioner challenged the arbitration award passed in favor of the Contractor before the Delhi High Court averring that cause of action arose in Delhi.

Whereas the petitioner objected that the Delhi High Court does not have jurisdiction to entertain the set-aside application.

The Court observed the following

  1. Upon a proper interpretation of the contractual terms, the parties did not expressly provide for the seat of the arbitration under the Agreement, and only provided that the venue would be at the discretion of the arbitrator.
  2. The reference to cause of action was for the purposes of determining the court which a party may approach in anticipation of arbitration proceedings, by way of an application under Section 9 of the Arbitration Act.
  3. Objective of Section 18(4) of the MSME Act, which permits a medium or small enterprise to approach a Facilitation council at the place where it is located.ย 

๐‘ฐ๐’ ๐’•๐’‰๐’† ๐’‚๐’ƒ๐’”๐’†๐’๐’„๐’† ๐’๐’‡ ๐’‚๐’ ๐’†๐’™๐’„๐’๐’–๐’”๐’Š๐’—๐’† ๐’‹๐’–๐’“๐’Š๐’”๐’…๐’Š๐’„๐’•๐’Š๐’๐’ ๐’„๐’๐’‚๐’–๐’”๐’†, ๐’ƒ๐’š ๐’˜๐’‰๐’Š๐’„๐’‰ ๐’”๐’–๐’„๐’‰ ๐’‚๐’ ๐’†๐’๐’•๐’†๐’“๐’‘๐’“๐’Š๐’”๐’† ๐’‚๐’ˆ๐’“๐’†๐’†๐’” ๐’•๐’ ๐’„๐’๐’๐’‡๐’†๐’“ ๐’‹๐’–๐’“๐’Š๐’”๐’…๐’Š๐’„๐’•๐’Š๐’๐’ ๐’†๐’๐’”๐’†๐’˜๐’‰๐’†๐’“๐’†, ๐’•๐’‰๐’† ๐’๐’†๐’ˆ๐’Š๐’”๐’๐’‚๐’•๐’Š๐’—๐’† ๐’Š๐’๐’•๐’†๐’๐’• ๐’•๐’‰๐’‚๐’• ๐’•๐’‰๐’† ๐’…๐’Š๐’”๐’‘๐’–๐’•๐’† ๐’˜๐’Š๐’๐’ ๐’ƒ๐’† ๐’“๐’†๐’”๐’๐’๐’—๐’†๐’… ๐’‚๐’• ๐’•๐’‰๐’† ๐’๐’๐’„๐’‚๐’•๐’Š๐’๐’ ๐’๐’‡ ๐’•๐’‰๐’† ๐’”๐’‚๐’Š๐’… ๐’Ž๐’†๐’…๐’Š๐’–๐’Ž ๐’๐’“ ๐’”๐’Ž๐’‚๐’๐’ ๐’†๐’๐’•๐’†๐’“๐’‘๐’“๐’Š๐’”๐’†, ๐’Š๐’” ๐’‡๐’–๐’“๐’•๐’‰๐’†๐’“๐’†๐’… ๐’ƒ๐’š ๐’•๐’‰๐’Š๐’” ๐’Š๐’๐’•๐’†๐’“๐’‘๐’“๐’†๐’•๐’‚๐’•๐’Š๐’๐’.

Accordingly, it was held that courts at Delhi does not have jurisdiction to entertain the set-aside application.ย 

#Delhihighcourt #Delayedpaymentdispute #MSMEDispute #challengepetition

Denounce with righteous indignation and dislike men who are beguiled and demoralized by the charms pleasure moment so blinded desire that they cannot foresee the pain and trouble.

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