9911796707
TMI Blog2023 (3) TMI 1540X X X X Extracts X X X X X X X X Extracts X X X X ..... that have arisen between the parties in relation to the Purchase Orders that were placed upon the petitioner by the respondent. 3. Admittedly, there is no Arbitration Agreement in writing between the parties contained either in the Purchase Orders or otherwise. 4. The petitioner being aggrieved of the non-payment of its alleged dues by the respondent, invoked the procedure under Section 18(1) of the Micro, Small & Medium Enterprises Development Act, 2006 (hereinafter referred as to the "MSMED Act‟) before the Micro, Small & Medium Enterprises Facilitation Council, District North-West, Delhi (hereinafter referred to as the "Facilitation Council‟). 5. The conciliation proceedings before the Facilitation Council failed on 20.05 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n Act as there is no Arbitration Agreement between the parties as required in Section 7 of the Arbitration Act. He submits that Section 11 of the Arbitration Act can be invoked only where there exists an arbitration agreement between the parties. 8. In rejoinder, the learned counsel for the petitioner submits that in terms of Section 18(3) of the MSMED Act, the provisions of the Arbitration Act are to be applied as if the arbitration was in pursuance of an arbitration agreement referred to in Section 7(1) of the Arbitration Act. He submits that, therefore, Section 11(6)(c) of the Arbitration Act would apply on the failure of the Facilitation Council to act as an arbitrator or to refer the dispute to an institution or centre for arbitration ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on by the Facilitation Council itself or upon such reference to any institution or centre, the provisions of the Arbitration Act shall apply to the dispute as if the arbitration was in pursuance of an arbitration agreement referred to in sub-Section 1 of Section 7 of the Arbitration Act. The use of the word "then" clearly indicates the intent of the legislature that it is only when the arbitration proceedings are initiated in form of the Facilitation Council itself taking it up or referring the dispute to any institution or Centre providing alternate dispute resolution services for such arbitration that the provisions of the Arbitration Act are to apply. The deeming fiction under Section 18(3) of presuming existence of an Arbitration Agreem ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ajan, (2005) 1 SCC 754 a legal fiction presupposes the existence of the State of facts which may not exist and then works out the consequences which flow from that state of facts. Thus, considering the overall purpose, objects and scheme of the MSMED Act, 2006 and the unambiguous expressions used therein, this court has no hesitation in holding that the provisions of Chapter-V of the MSMED Act, 2006 have an effect overriding the provisions of the Arbitration Act, 1996 xxxx 29. The aforesaid legal position also dispels the arguments advanced on behalf of the counsel for the buyers that the Facilitation Council having acted as a Conciliator under Section 18(2) of the MSMED Act, 2006 itself cannot take up the dispute for arbitration and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... "11. Appointment of arbitrators. - xxxx (6) Where, under an appointment procedure agreed upon by the parties,- (a) a party fails to act as required under that procedure; or (b) the parties, or the two appointed arbitrators, fail to reach an agreement expected of them under that procedure; or (c) a person, including an institution, fails to perform any function entrusted to him or it under that procedure,..." (Emphasis supplied) 15. The above provision can be invoked only where inter-alia the institution which has been entrusted to perform any function under the appointment procedure agreed upon by the parties fails to perform such function. The existence of an arbitration agreement as defined in Section 7 of the Arbitrati ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
