Bombay High Court: In a bunch of applications filed under Section 11 of Arbitration and Conciliation Act, 1996 seeking appointment of arbitrator, Manish Pitale, J. rejected the same on the ground of maintainability since the respondent was a micro, small and medium enterprise (‘MSME’).
It was pointed out that arbitration proceedings were already pending between the same parties before the Facilitation Council under the Micro, Small and Medium Enterprises Development Act, 2006 (‘MSMED Act’). The respondent further submitted that since it was an MSME, the provisions of MSMED Act were applicable, and the applicant may raise its grievance before the Facilitation Council. The said factual submission was not disputed by the applicant.
The Court observed that “Even if the grievance sought to be raised in the present applications pertains to cause of action distinct from the proceedings pending before the Facilitation Council under the MSMED Act, the applicant is not entitled to knock the doors of this Court under the provisions of Arbitration Act for appointment of arbitrator despite arbitration clause contained in the pay orders.”
The Court relied on Gujarat State Civil Supplies Corpn. Ltd. v. Mahakali Foods (P) Ltd., (2023) 6 SCC 401 wherein it was clarified that the Arbitration Act governs the law of Arbitration and Conciliation, while the MSMED Act governs the specific nature of disputes arising between the specific categories of persons, to be resolved by following a specific process through a specific forum.
Therefore, the Court held the instant applications under Section 11 of Arbitration Act as non-maintainable and dismissed the said applications.
[Bajaj Electricals Ltd. v. Alpha Communication Ltd., 2023 SCC OnLine Bom 2205, dated 13-10-2023]
Advocates who appeared in this case :
For Applicant: Advocate Harshavardhan G. Khambete,
For Respondent: Advocate Shashank Garg, Advocate Deepak Lad, Advocate Nistha Jain