Essar Oil And Gas Exploration And Production Limited Vs Gargi Travels Private Limited (Calcutta High Court)
The Calcutta High Court considered whether an application under Section 11 of the Arbitration and Conciliation Act, 1996 could be entertained while a reference under Section 18 of the Micro, Small and Medium Enterprises Development Act, 2006 (MSMED Act) remained pending before the Micro and Small Enterprises Facilitation Council (MSEFC) at the conciliation stage.
The petitioner contended that arbitration under Section 18 of the MSMED Act arises only after conciliation fails. Since the MSEFC proceedings had not crossed the conciliation stage, it was argued that there was no bar against appointing an arbitrator under Section 11 of the 1996 Act. The petitioner also relied on M/s. Ujas Associates Vs. M/s. KJS Cement (India) Ltd. and M/s. Steel Authority of India Ltd. and another Vs. Micro, Small Enterprise Facilitation Council, through Joint Director of Industries, Nagpur Region, Nagpur, reported at AIR 2012 Bom 178.
The respondents relied upon Gujarat State Civil Supplies Corporation Ltd. Vs. Mahakali Foods Pvt. Ltd. (Unit 2) and another, reported at 2022 SCC OnLine SC 1492, National Projects Construction Corporation Limited and another Vs. West Bengal State Micro Small Enterprises Facilitation Council and others, reported at 2017 SCC OnLine Cal 263, and Silpi Industries Etc. Vs. Kerala State Road Transport Corporation and another, reported at 2021 SCC OnLine SC 439. These decisions were relied upon, inter alia, for the overriding effect of the MSMED Act and the statutory dispute-resolution mechanism under Section 18.
