{"id":277264,"date":"2022-11-11T15:00:23","date_gmt":"2022-11-11T09:30:23","guid":{"rendered":"https:\/\/www.scconline.com\/blog\/?p=277264"},"modified":"2022-11-11T15:00:23","modified_gmt":"2022-11-11T09:30:23","slug":"supreme-court-msmed-act-2006-has-an-overriding-effect-over-the-provisions-of-the-arbitration-act-1996-legal-research-legal-news-updates","status":"publish","type":"post","link":"https:\/\/www.scconline.com\/blog\/post\/2022\/11\/11\/supreme-court-msmed-act-2006-has-an-overriding-effect-over-the-provisions-of-the-arbitration-act-1996-legal-research-legal-news-updates\/","title":{"rendered":"Supreme Court| Existence of arbitration agreement does not bar reference to Facilitation Council; MSMED Act has an overriding effect over the provisions of the Arbitration Act, 1996"},"content":{"rendered":"
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Supreme Court<\/b>: The division bench of Uday Umesh Lalit, C.J. and Bela M. Trivedi<\/b>*, J. has held that the provisions of Chapter-V of the Micro, Small and Medium Enterprises Development Act, 2006<\/a> (‘ MSMED Act’) have an overriding effect over the provisions of the Arbitration and Conciliation Act, 1996<\/a> [Arbitration Act, 1996] and no party to a dispute covered under Section 17<\/a> of the MSMED Act, 2006<\/a> would be precluded from making a reference to the Facilitation Council under Section 18(1) thereof, merely because there is an arbitration agreement existing between the parties. Further, the Facilitation Council, which initiated the Conciliation proceedings under Section 18(2)<\/a> of the MSMED Act, 2006<\/a> would be entitled to act as an arbitrator despite the bar contained in Section 80 of the Arbitration Act.<\/p>\n

The Court considered the following questions of law:<\/p>\n

1) Whether the provisions of Chapter-V of the MSMED Act would have an effect overriding the provisions of the Arbitration Act, 1996<\/a>?<\/b><\/p>\n

The Court said that the provisions of the special statute would override the provisions of the general statute, and reiterated that, while determining the effect of a statute overriding the other statute, the purpose and policy underlying the two statutes and the clear intendment conveyed by the language of the relevant provisions therein would be the relevant consideration. Further, it referred to the CIT<\/i> v. Shahzada Nand & Sons<\/i>, (1966) 3 SCR 379<\/a>, wherein it was observed that “the meaning and intention of a statute must be collected from the plain and unambiguous expression used therein, rather than from any notions which may be entertained by the court as to what is just and expedient”<\/b><\/p>\n

The Court referred to the Latin maxims “leges posteriores priores contrarias abrogant<\/i>” (the later laws shall abrogate earlier contrary laws) and “generalia specialibus non derogant<\/i>” (General laws do not prevail over Special laws), thus, when there is apparent conflict between two statutes, the provisions of a general statute must yield to those of a special one.<\/p>\n

The Court, after considering the purpose, intention and objects as also the scheme of the MSMED Act, 2006<\/a>, said that:<\/p>\n