Can Arbitration agreement between the parties and the chosen venue be overridden/superseded by the provisions of the MSMED Act, 2006? – Odisha Power Generation Corporation Ltd. Vs. Techniche Consulting Service and Others. – Calcutta High Court
In this important judgment, Hon’ble Calcutta High Court held that:
(i) Rule 9 of the 2016 Rules must be read in the above context and be construed as the venue and not the seat of arbitration. This is also by reason of the fact that the arbitration provided by the Facilitation Council cannot take away the free choice of the parties in the matter of seat and venue and override the same by the situs of the statutory arbitration.
(ii) Section 18(4) does not alter the seat-venue as decided in the arbitration agreement independently executed between the parties.
(iii) The non obstante clauses must therefore be given a limited meaning only in respect of section 18(1) and (4) and not beyond those provisions.
(iv) Section 18 of the MSMED Act including section 18(1) and (4) thereto does not exclude or obliterate the arbitration agreement executed between the parties.
(v) The Facilitation Council as arbitrator makes the deeming fiction of section 18(3) a necessity for that adjudication.
(vi) The office of the MSME Facilitation Council was the venue of the arbitration proceeding. The office of the Facilitation Council was not the seat.