Contractually designated seat governs Section 34 challenges to MSEFC awards, not the Council’s venue.

The respondent appointed the petitioner as a Piece Rate Worker for HVAC expansion works at the Taj-Bengaluru Airport Hotel Project under a Work Order dated 9 November 2021, subsequently amended on 25 April 2022.

Disputes arose regarding unpaid bills, following which the respondent terminated the arrangement on 8 December 2022.

The petitioner approached the Micro and Small Enterprises Facilitation Council, Konkan at Thane, under Section 18 of the Micro, Small and Medium Enterprises Development Act, 2006 (“MSME Act”).

The MSEFC passed an award directing the respondent to pay Rs.1,83,24,524/- with statutory interest.

After the respondent failed to satisfy the award, the petitioner initiated execution proceedings before the Commercial Court at Bengaluru.

The respondent filed an application under Section 34 of the Arbitration and Conciliation Act, 1996 (“Arbitration Act”) before the same court to set aside the award.

The petitioner objected that the Section 34 application was not maintainable at Bengaluru because the award had been passed by the MSEFC at Thane.

The Commercial Court rejected the objection, leading to the present writ petition.

Whether an application under Section 34 of the Arbitration Act challenging an award passed under Section 18 of the MSME Act was maintainable before the Commercial Court at Bengaluru, despite the award having been passed by the MSEFC at Thane

Whether the exclusive jurisdiction clause in the Work Order designating the courts at Bengaluru governed the territorial jurisdiction and seat of arbitration for purposes of a Section 34 challenge

Section 18(3) of the MSME Act provides that, when conciliation fails, the Facilitation Council may itself arbitrate or refer the dispute for arbitration, and the Arbitration Act applies as if the arbitration arose from an arbitration agreement under Section 7.

Section 18(4) confers jurisdiction on the MSEFC where the supplier is located, but the Council’s statutory jurisdiction does not necessarily determine the juridical seat for post-award proceedings.

A challenge to an MSEFC award is maintainable under Section 34 of the Arbitration Act, and the competent “Court” under Section 2(1)(e)(i) is ordinarily determined by the seat of arbitration.

The court relied on J&K Economic Reconstruction Agency v. Rash Builders India (P) Ltd., 2026 SCC OnLine SC 596, for the principles that the seat is the legal centre of arbitration, courts at the seat have supervisory jurisdiction, and the venue of hearings or delivery of the award does not by itself determine the seat.

An express exclusive jurisdiction clause, supported by a territorial nexus to the dispute, is binding and may establish the juridical forum for arbitration-related proceedings.

The Court held that the MSEFC’s proceedings at Thane constituted the statutory forum or venue through which the dispute was processed under Section 18 of the MSME Act; they did not, by themselves, displace the parties’ contractual allocation of jurisdiction.

Clause E of the Work Order expressly stipulated that the courts at Bengaluru alone would have exclusive jurisdiction over disputes arising from the contract.

The underlying work, project, and respondent’s location were also connected with Bengaluru.

Since Section 18(3) incorporates the Arbitration Act once the Council proceeds to arbitration, the post-award challenge was governed by Section 34 and the jurisdictional principles applicable to the agreed seat.

Accordingly, Bengaluru was treated as the juridical seat and the Commercial Court at Bengaluru was competent to entertain the respondent’s Section 34 application.

However, the Commercial Court’s observations that the MSEFC at Thane lacked jurisdiction and that the petitioner’s filing of execution proceedings at Bengaluru amounted to an admission of jurisdiction were held to be unwarranted.

The writ petition was therefore allowed in part.

The Court set aside only the observations contained in paragraph 8 of the Commercial Court’s order concerning the alleged lack of jurisdiction of the MSEFC at Thane and the effect of the petitioner’s execution proceedings at Bengaluru; the remainder of the Commercial Court’s order was left undisturbed.