It Could Have Been Challenged U/S 34 A&C Act: Orissa HC Upholds Single Judge Order Dismissing Writ Petition Challenging Arbitral Award By MSME Facilitation Council
The Orissa High Court upheld the decision of the Single-Judge Bench in declining to entertain a plea challenging an award passed by the Micro and Small Enterprises Facilitation Council under Article 226 of the Constitution.
The court observed that the same could have been challenged in accordance with the provisions prescribed under Section 34 of the Arbitration and Conciliation Act, 1996.
The Division Bench comprising Chief Justice Chakradhari Sharan Singh & Justice M.S. Raman asserted, “In the facts and circumstances of the present case, learned Single Judge has rightly declined to interfere with the arbitral award which could have been assailed by the appellant under Section 34 of the Arbitration and Conciliation Act.”
Senior Advocate Sudipto Sarkar represented the Appellant while Additional Government Advocate Debakanta Mohanty represented the Respondent.
The High Court was considering an intra-court appeal filed by the appellant challenging the judgment of a Single-Judge Bench rejecting the plea to entertain a challenge to an award passed by the Micro and Small Enterprises Facilitation Council, Cuttack (the Council) under Article 226 of the Constitution of India.
It was primarily the case of the appellant/writ petitioner that the award made by the Council ought to have been interfered with under Article 226/227 of the Constitution as there was no conciliation held in accordance with the procedure prescribed, which is a condition precedent for initiation of an arbitration proceeding under Section 18 (3) of the MSMED Act and, therefore, the arbitral award was a nullity. It was also argued that such clubbing of arbitration and conciliation proceedings was impermissible under the MSMED Act.
On the contrary, the respondent submitted that the Council after undertaking the conciliation proceeding had specifically recorded that the conciliation proceeding failed, whereafter the arbitration proceeding was undertaken as prescribed under Section 18 (3) of the Act.
The Bench noticed that by an order the conciliation process under Section 18 (2) of the MSMED Act was initiated for amicable settlement of the disputes between the parties. By a subsequent order, the Council declared failure of the conciliation process under Section 18 (2). Thereafter, it invoked the arbitration clause under Section 18 (3) of the Act. It was the appellant’s case that there is no semblance of any attempt to conciliate the dispute in accordance with the provisions under the Arbitration and Conciliation Act.
It was noticed by the Bench that the appellant participated in the arbitration proceeding, as was evident from the impugned award made by the Council and it did not appear that the appellant ever raised any issue of non-compliance of the requirement under Section 18 (2) of the MSMED Act read with the provisions under Part-III of the Arbitration and Conciliation Act.
Considering such factual and legal aspects, the High Court observed that the Single Judge had rightly declined to interfere with the arbitral award which could have been assailed by the appellant under Section 34 of the Arbitration and Conciliation Act.
Finding no legal infirmity in the impugned order passed by the Single Judge, the Bench dismissed the appeal.
Cause Title: AES India (Pvt.) Ltd v. State of Odisha & Ors. (Case No.: W.A No.968 of 2024)
Appearance:
Appellant: Senior Advocate Sudipto Sarkar, Advocates S. Satyakam, Adyasha Kar
Respondents: Addl. Government Advocate Debakanta Mohanty, Senior Advocate Manoj Kumar Mishra, Advocate Digambar Mishra