Court empowered to extend Mandates of Arbitral Tribunal even if dispute referred to arbitration under MSME Act: Gujarat High Court
Court empowered to extend Mandates of Arbitral Tribunal even if dispute referred to arbitration under MSME Act: Gujarat High Court.
"This Court is of the considered view that even in respect of the references made by MSME, the provisions of Arbitration and Conciliation Act, 1996 would be applicable and thereby this Court is empowered under Section 29A to extend the mandate where the period prescribed under the Act for concluding the arbitration proceedings has expired"
In its recent judgment, the Gujarat High Court ruled that even in cases where the dispute has been referred to arbitration under the Micro, Small and Medium Enterprises Development Act, 2006 (MSME Act), the Court is empowered to extend the Arbitral Tribunal mandates under Section 29A of the Arbitration and Conciliation Act, 1996 (A&C Act).
In view of Section 18(3) of the MSME Act, the provisions of the A&C Act are applicable once the dispute is referred to arbitration under MSME Act, thus the mandates of the Arbitral Tribunal can be extended by the Court.
The applicant M/s Magirsha Industries made a reference before the Micro, Small, and Medium Enterprise Facilitation Council (MSMEFC) under Section 18(3) of the MSME Act pursuant to which a sole arbitrator was appointed constituting the Arbitral Tribunal. As the time limit of 12 months under Section 29A (1) of the A&C Act for passing an arbitral award had lapsed, the Applicant filed the present application seeking an extension of the mandate of the Arbitral Tribunal.
The issue before the Court was whether it was within the power of the Court to extend the mandate of the Arbitral Tribunal, in cases where reference to arbitration had been made under the MSME Act.
The Court opined that Section 18(3) of the MSME Act provides that once a dispute has been referred to arbitration, the provisions of the A&C Act will apply as if the dispute was in pursuance of an arbitration agreement under Section 7 of the A&C Act.
Therefore, the Court was thereby empowered to extend the mandate of the Arbitral Tribunal under Section 29A of the A&C Act in cases where the period prescribed under the A&C Act for concluding proceedings had expired.
The present application was allowed and the Court passed an order extending the mandate of the Arbitral Tribunal by 12 months.
