Whether seat of MSMEF Council will be the seat of arbitration in the spirit of Section 18 read with section 24 of the MSMED Act, 2006? | When will the interplay between the MSMED Act, 2006 and the Arbitration Act, 1996 will come to an end? | Can MSMED Act, 2006 be applied to determine the jurisdiction of the Court defined in Section 2(1)(e) of the Arbitration Act 1996? – Uttar Gujarat Vij Company Ltd. Vs. Gupta Power Infrastructure Ltd. – Gujarat High Court
The Division Bench of the Gujarat High Court held that:
(i) The provisions of Section 18(4) of MSMED Act would have an overriding effect only with respect to the jurisdiction of the MSME Felicitation Council in adjudication of the dispute as an Arbitrator and has no application beyond that point.
(ii) Once the challenge is put forth before the Court defined in Section 2(1)(e) of the Arbitration Act, 1996 by making pre-requisite deposit as per Section 19 of the MSMED Act, 2006, the interplay between the MSMED Act, 2006 and the Arbitration Act, 1996 would come to an end.
(iii) The MSMED Act, 2006 cannot be read and applied to determine the jurisdiction of the Court defined in Section 2(1)(e) of the Arbitration Act, 1996 before whom the challenge to an award is laid under Section 34.
(iv) The rejection of the application under Section 34 on the ground of entertainability, i.e. lack of jurisdiction has resulted in denial to set aside an arbitral award would be a ground to entertain the appeal under Section 37, incorporated in sub-section (1)(c) of Section 37.