M/S. Porwal Sales Thr. Its ... vs M/S. Flame Control Industries - Synopsis
Team SoOLEGAL 29 Jul 2020

In the case M/s. Porwal Sales v/s M/s. Flame Control IndustriesArbitration Petition No. 77 of 2017, the Bombay High Court noted that sub-section (1) of Section 18 should be read with sub-section (4) of the Micro, Small and Medium Enterprises Development Act2006. It holds that Section 18 is applicable only when a party invokes the Council’s authority for a sum due under Section 17. In addition, the jurisdiction clause pursuant to section 18(4) does not pose a bar on obtaining the appointment of an arbitrator pursuant to section 11 of the Arbitration Act. Although the word "may" has been used under section 18(1), the initiation of proceedings under section 18 is not compulsory for the supplier or buyer. However, the Court also held that, in cases where a reference already has been made to the Council, an application for the appointment of an arbitrator is not admissible. 

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