Case title: Marine Craft Engineers Private Limited Vs. Garden Reach Shipbuilders and Engineers Limited, DATED 05/04/2023
👉 The petitioner is a registered Micro and Small Scale Enterprise and was the respondent in the arbitration proceedings before the Sole Arbitrator. The petitioner is the “supplier” of services and the respondent is the “buyer” in the dispute before the Arbitrator.
👉 The contract related to repair of a Wet Basin flap gate at Garden Reach Shipyard, Kolkata. 3. The petitioner made a reference on 11.5.2016 under the provisions of The Micro, Small and Medium Enterprises Development Act, 2006 before the West Bengal State Micro Small Enterprises Facilitation Council and the respondent was called upon to appear for conciliation before the Council on 4.7.2016.
👉 During the pendency of the reference before the Facilitation Council, the respondent appointed an Arbitrator on 23.9.2016 on the basis of a clause in the purchase order.
👉 The Arbitrator issued notice to the parties on 4.10.2016 for adjudicating disputes arising out of the purchase order. The petitioner thereafter challenged the jurisdiction of the Arbitrator under section 16 of The Arbitration and Conciliation Act, 1996 which was rejected on 28.2.2017.
Court’s sequitur:
👉 26. ,….. the unilateral act of the respondent in invoking the contractual arbitration clause and appointing the learned Sole Arbitrator on 23.9.2016 after the petitioner made a reference to the Facilitation Council is thus patently contrary to the provisions of the MSMED Act. Moreover, the respondent invoked the arbitration clause and proceeded with the arbitration and made a reference before the Arbitrator appointed by it being fully aware that the reference before the
Facilitation Council under the MSME Act was pending as on the date of the appointment of the Arbitrator.
👉 The impugned Award dated 23.9.2018 by which the claim of the respondent (which was the claimant in the arbitration proceedings) of Rs. 30,24,849/- was allowed in full is hence in the form of a face-off with the provisions of the MSMED Act so to speak.
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