Case Note & Summary
The appellant, M/s. Ravindranath GE Medicate Associate Private Limited, issued a work order dated 9th January 2008 to the respondent, M/s. Clean Coats Private Limited, for epoxy flooring and other coatings at its hospital in Chennai, valued at Rs.1,09,55,852/-. Disputes arose, and the respondent filed a reference petition before the Micro and Small Enterprises Facilitation Council, Konkan Region, Thane, under the Micro, Small and Medium Enterprises Development Act, 2006 (MSMED Act), claiming Rs.21,17,361/-. The appellant also filed an application before the council. The council passed an arbitral award dated 17th March 2015. The appellant filed an application under Section 34 of the Arbitration and Conciliation Act, 1996 before the Principal District Judge, Thane, to set aside the award. The respondent raised a preliminary objection that the application was not maintainable because the award was under the MSMED Act and the limitation period under Section 34(3) of the Arbitration Act did not apply. The learned Principal District Judge allowed the respondent's application and rejected the appellant's Section 34 application as not maintainable. Aggrieved, the appellant filed the present appeal under Section 37 of the Arbitration Act. The High Court considered the issue of maintainability and limitation. The court held that an application under Section 34 of the Arbitration Act is maintainable against an arbitral award passed under the MSMED Act, and the period of limitation under Section 34(3) applies. The court set aside the order of the Principal District Judge and remanded the matter for consideration on merits.
Headnote
A) Arbitration Law - Maintainability of Section 34 Application - Micro, Small and Medium Enterprises Development Act, 2006 - Section 34 of Arbitration and Conciliation Act, 1996 - The court considered whether an application under Section 34 of the Arbitration Act is maintainable against an arbitral award passed under the MSMED Act, 2006. Held that such an application is maintainable and the period of limitation under Section 34(3) of the Arbitration Act applies. (Paras 1-10)
B) Limitation - Period for Challenging Arbitral Award - Section 34(3) of Arbitration and Conciliation Act, 1996 - The court examined the limitation period for filing an application to set aside an arbitral award under the MSMED Act. Held that the period of limitation under Section 34(3) of the Arbitration Act applies, and the application must be filed within three months from the date of receipt of the award. (Paras 5-8)
Issue of Consideration
Whether an application under Section 34 of the Arbitration and Conciliation Act, 1996 challenging an arbitral award passed under the Micro, Small and Medium Enterprises Development Act, 2006 is maintainable and whether the period of limitation under Section 34(3) applies.
Final Decision
The High Court allowed the appeal, set aside the order dated 13th June 2016 passed by the learned Principal District Judge, Thane, and remanded the matter back to the learned Principal District Judge for consideration of the appellant's application under Section 34 of the Arbitration Act on merits in accordance with law.
Law Points
- Maintainability of Section 34 application under Arbitration Act
- 1996 for awards under MSMED Act
- 2006
- Limitation period for challenging arbitral award
- Applicability of Section 34(3) of Arbitration Act to MSMED Act awards
Case Details
2016 LawText (BOM) (07) 63
Arbitration Appeal (ST.) No.18470 of 2016 with Civil Application (ST.) No.18471 of 2016
Mr. G.R. Joshi, Senior Advocate a/w Mr. Raj Panchnnatia a/w Mr. Ayush Agarwala a/w Mr. Anindya Basarkod a/w Mr. Nishant Prasad i/by M/s. Khaitan & Co. for the Appellant/Applicant; Mr. Ashwin Ankhad a/w Ms. Nishita Mohanty i/by M/s. Ashwin Ankhad & Associates for the respondent
M/s. Ravindranath GE Medicate Associate Private Limited
M/s. Clean Coats Private Limited
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Nature of Litigation
Appeal under Section 37 of the Arbitration and Conciliation Act, 1996 against order of Principal District Judge rejecting Section 34 application as not maintainable.
Remedy Sought
Appellant sought setting aside of the order dated 13th June 2016 passed by the learned Principal District Judge, Thane, which rejected the appellant's application under Section 34 of the Arbitration Act as not maintainable.
Filing Reason
The appellant challenged the arbitral award dated 17th March 2015 passed by the Micro and Small Enterprises Facilitation Council under the MSMED Act, 2006.
Previous Decisions
The learned Principal District Judge, Thane, by order dated 13th June 2016, allowed the respondent's preliminary objection and held that the appellant's application under Section 34 of the Arbitration Act was not maintainable, thereby rejecting the application.
Issues
Whether an application under Section 34 of the Arbitration and Conciliation Act, 1996 is maintainable against an arbitral award passed under the Micro, Small and Medium Enterprises Development Act, 2006.
Whether the period of limitation under Section 34(3) of the Arbitration Act applies to such an application.
Submissions/Arguments
Appellant argued that the application under Section 34 is maintainable and the limitation period under Section 34(3) applies.
Respondent raised preliminary objection that the application is not maintainable because the award was under the MSMED Act and the limitation period under Section 34(3) does not apply.
Ratio Decidendi
An application under Section 34 of the Arbitration and Conciliation Act, 1996 is maintainable against an arbitral award passed under the Micro, Small and Medium Enterprises Development Act, 2006, and the period of limitation under Section 34(3) of the Arbitration Act applies to such an application.
Judgment Excerpts
By this appeal filed under Section 37 of the Arbitration and Conciliation Act, 1996 (for short “the Arbitration Act”), the appellant has impugned the order dated 13th June 2016 passed by the learned Principal District Judge, Thane allowing the application filed by the respondent herein raising a preliminary objection on the maintainability of the application filed by the appellant herein under Section 34 of the Arbitration Act and holding that the said arbitration application was not maintainable.
Learned Principal District Judge rejected the arbitration application filed by the appellant praying for setting aside the impugned award dated 17th March 2015.
Procedural History
The respondent filed a reference petition before the Micro and Small Enterprises Facilitation Council under the MSMED Act, 2006. The council passed an arbitral award on 17th March 2015. The appellant filed an application under Section 34 of the Arbitration Act before the Principal District Judge, Thane, to set aside the award. The respondent raised a preliminary objection on maintainability. The Principal District Judge allowed the objection and rejected the application on 13th June 2016. The appellant then filed the present appeal under Section 37 of the Arbitration Act before the Bombay High Court.
Acts & Sections
- Arbitration and Conciliation Act, 1996: Section 34, Section 37
- Micro, Small and Medium Enterprises Development Act, 2006:
