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TMI Blog2017 (2) TMI 1557X X X X Extracts X X X X X X X X Extracts X X X X ..... the contract between the first petitioner and the third respondent on the basis of which the third respondent has made its claims, contains an arbitration clause. The first petitioner had appointed an arbitrator in terms of such arbitration clause. In view of the arbitrator being appointed in terms of the arbitration agreement to arbitrate on the disputes between the first petitioner and the third respondent, the West Bengal State Micro Small Enterprises Facilitation Council has no jurisdiction over such disputes. He relies upon All India Reporter 2012 Bombay 178 (M/s. Steel Authority of India Limited & Anr. v. Micro, Small Enterprise Facilitation Council, through Joint Director of Industries, Nagpur Region, Nagpur) and an unreported decision of the Bombay High Court rendered in Arbitration Petition No. 56 of 2013 (M/s. Hindustan Wires Limited v. Mr. R. Suresh & Anr.) and submits that, the Micro, Small and Medium Enterprises Development Act, 2006 does not negate an existing arbitration agreement between the parties. The Council was wrong in issuing the writing dated March 17, 2016 by which the Council had fixed a date for arbitration. Learned Advocate for the petitioners submits th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... third respondent had raised claims other than the refund of the security deposit lying with the first petitioner. This claim letter is annexed by the first petitioner in the writ petition itself. The first petitioner, however, has not averred that it had refunded the security deposit to the third respondent. There is no averment in the writ petition that, the account between the first petitioner and the third respondent stood settled. The petitioners, however, claim that the running account bills of the third respondent have been paid. The petitioners have consciously not stated that, the accounts between the parties stand settled. In view of the fact that, the security deposit made by the third respondent is still lying with the first petitioner, it cannot be said that the claim of the third respondent is barred by the laws of limitation. The petitioners are not claiming forfeiture of the security deposit. In absence of such particulars, it is safe to infer that, the jural relationship between the first petitioner and the third respondent still exists. The final bill has not been settled. The security deposit is yet to be refunded. The first petitioner is, therefore, holding on t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and the provisions of sections 65 to 81 of the Arbitration and Conciliation Act, 1996 (26 of 1996) shall apply to such a dispute as if the conciliation was initiated under Part III of that Act. (3) Where the conciliation initiated under sub-section (2) is not successful and stands terminated without any settlement between the parties, the Council shall either itself take up the dispute for arbitration or refer to it any institution or centre providing alternate dispute resolution services for such arbitration and provisions of the Arbitration and Conciliation Act, 1996 (26 of 1996) shall then apply to the dispute as of the arbitration was in pursuance of an arbitration agreement referred to in subsection (1) of section 7 of that Act. (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 supplier located within its jurisdiction and a buyer located anywhere in India. (5) Every reference made under this section shall be decided ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , the provisions of the first part of the Act of 1996 will apply to a statutory arbitration as if there was an arbitration agreement between the parties. However, the first part of the Act of 1996 will not apply in the event there is a conflict between the provisions of the Act which enforces statutory arbitration and the provisions of the Act of 1996. 14. There are fundamental differences between the settlement of dispute mechanism provided by the Act of 2006 and the Act of 1996. One of such differences is that, the Council has to undertake a mandatory conciliation before an arbitration which is not so under the Act of 1996. The second is that, the Council or the centre or institution identified by it will undertake the arbitration in the event of an unsuccessful conciliation, notwithstanding anything contained otherwise. The Act of 1996 allows resolution of the disputes by the agreed forum. The Act of 2006, therefore, overrides the chosen forum for settlement of the disputes to that extent. The third difference is that, the Act of 2006 mandates that, an application for setting aside of decree or award or order made by the Council or the institution or centre identified by the Co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt is a supplier within the meaning of the Act of 2006. Therefore, in terms of Section 18(4) of the Act of 2006, the first respondent is the authority designated to arbitrate the disputes between the first petitioner and the third respondent. The existence of a live dispute between the first petitioner and the third respondent is established. On the other side of the spectrum is the arbitration agreement between the first petitioner and the third respondent. The arbitration agreement, however, has not been placed on record by the petitioners. Be that as it may, the petitioners have appointed a sole arbitrator in terms of such arbitration agreement by a writing dated November 9, 2015. In such appointment letter the first petitioner claims that, clause 6.00 of the agreement dated November 10, 1998 and the amendment thereto dated Novembers 23, 1999 permits the Chairman and Manufacturing Director of the first petitioner to nominate the arbitrator to arbitrate the disputes between the first petitioner and the third respondent. The arbitrator has claimed to have entered into reference on November 16, 2015. The arbitration agreement contained in the writing dated November 10, 1998 and the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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