State Trading Corporation of India Ltd. Vs Micro And Small Enterprises Facilitation Council Delhi And Anr. (Delhi High Court)
The Delhi High Court considered a Letters Patent Appeal challenging the order dated 15 January 2024 passed by the learned Single Judge in W.P.(C) 4227/2023. The Single Judge had declined to interfere with an arbitral award dated 1 December 2022 passed by the Delhi Arbitration Centre, holding that where a dispute resolution mechanism is provided under the statute, the Court should not exercise jurisdiction under Articles 226/227 of the Constitution merely because the statutory remedy requires compliance with the condition of pre-deposit.
The arbitral award directed the appellant to pay ₹7,21,10,729/- to Respondent No. 2 along with pendente lite and future interest under the Micro, Small and Medium Enterprises Development Act, 2006 (MSMED Act), as well as litigation costs of ₹50,000/-. The appellant contended that the award was non est in law for lack of inherent jurisdiction. It was submitted that the contract and supplies had been executed in 1991, whereas the MSMED Act was enacted only in 2006, and Respondent No. 2 was not registered under the MSMED Act at the time of execution of the contract or completion of supplies. Therefore, according to the appellant, the provisions of the MSMED Act were not applicable to those transactions.
