Case Note & Summary
The dispute arose between two companies regarding the functioning of a 7.5 MVA Submerged Arc Furnace purchased by the petitioner from the respondent. The petitioner filed an arbitration petition under Section 11 of the Arbitration and Conciliation Act, seeking the appointment of a sole arbitrator, citing an arbitration clause in their purchase agreement dated 27th September 2022. The respondent raised a preliminary objection regarding the maintainability of the petition, stating that they had already approached the Facilitation Council under Section 18 of the Micro and Small Enterprises Act, which had jurisdiction over the matter. The petitioner contended that the existence of an arbitration clause necessitated the appointment of an arbitrator without a detailed inquiry. The court reviewed various judgments, including those from the Supreme Court and High Courts, which addressed the jurisdiction of the Facilitation Council in relation to works contracts. The court noted that the Supreme Court had held that the provisions of the Micro and Small Enterprises Act would override those of the Arbitration and Conciliation Act. Ultimately, the court concluded that it could not determine the true nature of the contract in the arbitration petition and dismissed the petition, allowing the Facilitation Council to adjudicate the matter. The petitioner was permitted to present their case before the Council.
Headnote
A) Arbitration Law - Appointment of Arbitrator - Maintainability of Petition - Arbitration and Conciliation Act, 1996, Section 11 - The court held that the petition for appointment of an arbitrator was not maintainable as the respondent had already availed the statutory remedy under the Micro and Small Enterprises Act before the Facilitation Council, which had jurisdiction over the matter. The court emphasized that the true nature of the contract should be adjudicated by the Facilitation Council. (Paras 12-14).
Issue of Consideration
Whether the petition for appointment of an arbitrator is maintainable given the prior proceedings before the Facilitation Council under the Micro and Small Enterprises Act.
Final Decision
The court dismissed the petition for appointment of an arbitrator, affirming that the Facilitation Council had jurisdiction to adjudicate the dispute regarding the true nature of the contract.
Law Points
- Arbitration
- Conciliation
- Jurisdiction
- Works Contract
- Micro and Small Enterprises Act
