Writ Jurisdiction Under Article 226 Cannot Interdict Arbitration Following Dismissal of Section 16 Application.

The Petitioner challenged an order dated 27.05.2025 passed by Respondent No. 1 (MSEFC), which referred a dispute to the Delhi International Arbitration Centre (DIAC) under Section 18(3) of the MSMED Act, 2006

The Petitioner alleged that mandatory conciliation proceedings under Sections 18(1) and 18(2) were bypassed without notice

Following the referral, a Sole Arbitrator was appointed.

The Petitioner filed an application under Section 16 of the Arbitration and Conciliation Act, 1996, challenging the tribunal's jurisdiction based on the alleged failure of the conciliation stage; however, the Arbitrator dismissed this application on 13.10.2025

The Petitioner subsequently sought a Writ of Certiorari to quash the referral and initiate fresh conciliation

Whether the High Court should exercise its writ jurisdiction under Article 226 to interdict ongoing arbitration proceedings when a Section 16 application has already been dismissed by the Arbitrator.

Whether the failure to conduct formal conciliation proceedings under the MSMED Act renders the subsequent arbitral reference void.

The Court applied Section 18 of the Micro, Small and Medium Enterprises Development (MSMED) Act, 2006, regarding the procedure for dispute resolution

It relied on Section 16 of the Arbitration and Conciliation Act, 1996, which empowers an Arbitral Tribunal to rule on its own jurisdiction (Competence-Competence principle)

The Court followed the precedent in Corrtech International Pvt. Ltd. v. DIAC, which held that grievances regarding jurisdictional errors must be raised under Section 34 after the final award is passed

Further, it applied the doctrine from Bhaven Construction v. Executive Engineer, Sardar Sarovar Narmada Nigam Ltd., establishing that judicial interference under Article 226/227 in arbitral matters is restricted to "exceptional circumstances" like patent lack of jurisdiction or manifest bad faith

The Court observed that the MSEFC had recorded the Petitioner’s apparent lack of interest in conciliation on 27.05.2025 before making the reference

It noted that the Arbitrator had already adjudicated upon the Petitioner’s jurisdictional objections via a Section 16 application, finding the challenge to the conciliation stage non-maintainable after termination of Section 18(2) proceedings

The Court reasoned that since the Arbitration Act is a complete code, the Petitioner is not "remediless"; any grievance regarding the dismissal of the Section 16 application must await the final award and be challenged under Section 34

The Court found no "exceptional circumstances" or "patent lack of jurisdiction" to justify bypassing the statutory machinery provided in the 1996 Act

It ruled that the Arbitral Tribunal is competent to decide its own jurisdiction and that High Courts must exercise restraint to ensure minimal judicial interference

The Court granted the Petitioner liberty to agitate all jurisdictional issues at the appropriate stage under Section 34 of the Act