Writ petitions challenging MSMED arbitral awards are not maintainable; remedy lies under Section 34.

The petitioner, proprietor of M/s Sahil Book Binder, had allegedly purchased printing raw material from the respondent, a micro enterprise, against invoices. The respondent claimed that ₹16,36,639 remained outstanding in the running account after the petitioner’s last payment on 11 January 2020 and issued a demand notice on 28 August 2021.

The respondent thereafter filed a reference under Section 18 of the Micro, Small and Medium Enterprises Development Act, 2006 (“MSMED Act”) before the Micro and Small Enterprises Facilitation Council, Delhi (“MSMEFC”). Upon the petitioner’s non-appearance, the MSMEFC terminated conciliation and referred the dispute to the Delhi International Arbitration Centre under Section 18(3) of the MSMED Act on 24 November 2022.

The petitioner did not appear before the learned Sole Arbitrator and was proceeded against ex parte. By award dated 12 August 2024, the Arbitrator awarded the respondent ₹16,36,639 with interest under Section 16 of the MSMED Act, along with costs of ₹50,000.

Execution proceedings were subsequently instituted before the Commercial Court at Gautam Buddh Nagar, Uttar Pradesh.

The petitioner approached the High Court under Articles 226/227, contending that the transaction was a work contract rather than a supply-of-goods transaction, that the MSMEFC lacked jurisdiction, and that she had not been duly served during the Council or arbitral proceedings. She claimed to have learned of the award only on 10 June 2026 and filed the writ petition on 4 August 2026.

Whether a writ petition under Articles 226/227 of the Constitution is maintainable to challenge an arbitral award rendered pursuant to a reference under Section 18 of the MSMED Act when the aggrieved party has a statutory remedy under Section 34 of the Arbitration and Conciliation Act, 1996 (“A&C Act”)

Whether objections concerning the MSMEFC’s jurisdiction, the applicability of Sections 15–18 of the MSMED Act, and alleged non-service of arbitral proceedings independently justify exercise of writ jurisdiction

The Court applied the principle that the A&C Act is a complete code governing arbitral proceedings and that an arbitral award must ordinarily be challenged in accordance with Section 34 of that Act.

Under Section 18 of the MSMED Act, disputes referred to the MSMEFC proceed to arbitration if conciliation fails, and the resulting award is subject to the statutory arbitral-remedy framework.

The Court relied on State Trading Corporation of India Ltd. v. Micro and Small Enterprises Facilitation Council, Delhi, LPA 91/2024, which held that writ petitions should not ordinarily be entertained against awards arising under the MSMED Act and cannot be used to avoid the pre-deposit requirement under Section 19 of that Act.

It further relied on M/s India Glycols Ltd. v. Micro and Small Enterprises Facilitation Council, Medchal-Malkajgiri, Civil Appeal No. 7491/2023, and NBCC (India) Ltd. v. Micro and Small Enterprises Facilitation Council, 2024:DHC:4998-DB, holding that jurisdictional objections must be raised within the arbitral framework and may be challenged under Section 34.

The principles in Whirlpool Corporation v. Registrar of Trade Marks, (1998) 8 SCC 1, and Harbanslal Sahnia v. Indian Oil Corporation Ltd., (2003) 2 SCC 107, recognising exceptions to the alternate-remedy rule, were held distinguishable.

The Court held that the petitioner’s challenge was, in substance, directed against an arbitral award arising from a statutory MSMED reference and therefore had to be pursued under Section 34 of the A&C Act.

The objections that the transaction was a work contract, that the MSMEFC had not determined the applicability of the MSMED Act, and that the reference was therefore without jurisdiction did not create an exceptional basis for writ intervention.

Relying on Gujarat State Civil Supplies Corporation Ltd. v. Mahakali Foods (P) Ltd. as referred to in State Trading Corporation, the Court observed that the arbitral tribunal is competent under Section 16 of the A&C Act to rule on its own jurisdiction, with its decision being challengeable under Section 34.

Similarly, the alleged non-service and delayed knowledge of the award were matters that could be urged before the competent Section 34 court and did not confer an independent writ jurisdiction upon the High Court.

Entertaining the writ petition would also risk bypassing the statutory pre-deposit requirement under Section 19 of the MSMED Act.

The petitioner was granted liberty to avail the remedy under Section 34 of the A&C Act, with all objections—including jurisdiction, applicability of the MSMED Act, and alleged non-service—left open for determination by the competent forum.

The writ petition and pending applications were dismissed.