Writ jurisdiction cannot be invoked to challenge arbitral awards when efficacious statutory remedies under Section 34 are available.

The Petitioner, Nitin Seth, filed a writ petition under Article 226 of the Constitution of India seeking to set aside an Arbitral Award dated 30.07.2025 and a reference made by the Facilitation Council on 13.05.2022

The reference was made under Section 18(3) of the Micro, Small and Medium Enterprises Development Act, 2006 ("MSMED Act")

The Petitioner contended that the dispute arose from a "works contract," which falls outside the scope of the MSMED Act, and therefore the Facilitation Council and the resulting Arbitral Award were wholly without jurisdiction

The Petitioner approached the High Court instead of invoking the statutory remedy under Section 34 of the Arbitration and Conciliation Act, 1996 ("A&C Act")

1. Whether a writ petition under Article 226/227 of the Constitution is maintainable to challenge an arbitral award when a statutory remedy exists under Section 34 of the A&C Act

2. Whether a jurisdictional challenge based on the nature of the contract (works contract) constitutes a "rare and exceptional circumstance" warranting interference by the Writ Court

The Court primarily applied Section 18 and Section 19 of the MSMED Act, 2006, alongside Section 34 of the Arbitration and Conciliation Act, 1996

It relied on the precedent in Executive Engineer and Others vs. Bholasingh Jaiprakash Construction Ltd., which holds that Article 226 cannot be invoked by litigants who fail to avail statutory remedies

The Court further cited M/s India Glycols limited v. MSME Facilitation Council, wherein the Supreme Court held that writ petitions should not be entertained to obviate the mandatory pre-deposit requirement under Section 19 of the MSMED Act

Additionally, it applied the principle of "minimal judicial interference" established in Bhaven Construction v. Executive Engineer, characterizing the A&C Act as a self-contained and comprehensive code

The Court reasoned that the Petitioner's jurisdictional objection—that the dispute involved a "works contract"—could have been raised before the Arbitral Tribunal or subsequently as a ground of "patent illegality" under Section 34 of the A&C Act

The Court observed that the Petitioner was essentially attempting to bypass the statutory framework of the MSMED Act and the A&C Act

It emphasized that the MSMED Act's objective would be defeated if parties were permitted to use writ jurisdiction to avoid the Section 19 requirement of a 75% pre-deposit for challenging awards

The Court highlighted that arbitration is a voluntary, private adjudicatory system, and the traditional litigation mechanism should not be reintroduced by casually entertaining writs against arbitral proceedings or awards

The Court concluded that the Petitioner failed to demonstrate "rare and exceptional circumstances," such as manifest bad faith or a complete absence of an efficacious alternative remedy, necessary to justify writ intervention

The Court ruled that the Petitioner must seek recourse through the statutory remedies provided under the A&C Act

However, all rights and contentions, including the issue of jurisdiction, were left open for the Petitioner to agitate at the appropriate legal stage