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TMI Blog2023 (1) TMI 1377X X X X Extracts X X X X X X X X Extracts X X X X ..... ration Ltd. vs. FEPL Engineering (P) Ltd. [ 2019 (9) TMI 1701 - DELHI HIGH COURT ] proceeds on an interpretation of Section 18(4) of the MSMED Act vis-a-vis the contractual provisions contained in the arbitration clause and the jurisdiction clause of the agreement. However, in the present case, the Purchase Order does not contain an arbitration clause at all. In such circumstances, it is, not possible to hold that the parties agreed to a particular seat of the arbitration which would vest jurisdiction in this Court despite the provisions of the MSMED Act. In any event, the judgment of the Supreme Court in Gujarat State Civil Supplies Corporation Ltd. [ 2022 (11) TMI 91 - SUPREME COURT ] makes it clear that the provisions of Chapter V of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to Delhi Jurisdiction. 4. Although the Purchase Order does not contain an arbitration clause, the claims of respondent No. 1 herein were referred for conciliation and arbitration to the Facilitation Council under Section 18 of the Micro, Small and Medium Enterprises Development Act, 2006 [ MSMED Act ]. Section 18(4) of the MSMED Act provides as follows:- 18. Reference to Micro and Small Enterprises Facilitation Council. xxxx xxxx xxxx (4). Notwithstanding anything contained in any other law for the time being in force, the Micro and Small Enterprises Facilitation Council or the centre providing alternate dispute resolution services shall have jurisdiction to act as an Arbitrator or Conciliator under this section in a dispute between the su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he present case, both the VENUE as well as the SEAT (by way of the jurisdiction clause) has been agreed to be at New Delhi. We, therefore, have no hesitation to say that the Courts at Delhi would have the jurisdiction to entertain the petition challenging the award passed by the MSME Council. Since the parties agreed to confer exclusive jurisdiction to Courts at New Delhi, notwithstanding the fact that the purchase order in question dated 10th March 2016, was issued by the Petitioner from its Vadodara Office to the Respondent at Navi Mumbai, and even if no cause of action has arisen in Delhi, the Courts of Delhi would have jurisdiction to entertain the petition under Section 34 of the Arbitration Act. This is pertinently because in Indus Mo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d only determine the 'VENUE', and not the 'SEAT' of arbitration. The 'SEAT' of arbitration would continue to be governed in terms of the arbitration agreement between the parties, which in the present case as per jurisdiction Clause No. 35 is New Delhi. As a result, in terms of the decision of the Supreme Court in Indus Mobile (supra), it would be the Courts at New Delhi that would have exclusive jurisdiction to entertain the petition under Section 34 of the Act. Emphasis Supplied. 8. The aforesaid judgment proceeds on an interpretation of Section 18(4) of the MSMED Act vis-a-vis the contractual provisions contained in the arbitration clause and the jurisdiction clause of the agreement. However, in the present case, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nding anything inconsistent therewith contained in any other law for the time being in force. 10. The question of conflict between the MSMED Act and the Arbitration Act has been addressed in paragraphs 27 and 28 of the judgment as follows:- 27. The submissions made on behalf of the counsel for the Buyers that a conscious omission of the word agreement in sub-section (1) of Section 18, which otherwise finds mention in Section 16 of the MSMED Act, 2006 implies that the arbitration agreement independently entered into between the parties as contemplated under Section 7 of the Arbitration Act, 1996 was not intended to be superseded by the provisions contained under Section 18 of the MSMED Act, 2006 also cannot be accepted. A private agreement b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bstantive law, however, it is equally settled legal position that no agreement entered into between the parties could be given primacy over the statutory provisions. When the Special Act i.e., MSMED Act, 2006 has been created for ensuring timely and smooth payment to the suppliers who are the micro and small enterprises, and to provide a legal framework for resolving the dispute with regard to the recovery of dues between the parties under the Act, also providing an overriding effect to the said law over any other law for the time being in force, any interpretation in derogation thereof would frustrate the very object of the Act. The submission therefore that an independent arbitration agreement entered into between the parties under the Ar ..... X X X X Extracts X X X X X X X X Extracts X X X X
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