Court emphasizes statutory remedies under Arbitration Act, declines writ jurisdiction for procedural irregularities.
In a significant judgment dated April 30, 2026, the Allahabad High Court dismissed a writ petition filed by Shri Krishna Nutrition India Pvt Ltd challenging an arbitral award under the Micro, Small and Medium Enterprises Development Act, 2006. The Division Bench, comprising Justices Saral Srivastava and Garima Prashad, ruled that the writ jurisdiction under Article 226 of the Constitution cannot be invoked to challenge arbitral awards when statutory remedies are available under Section 34 of the Arbitration and Conciliation Act, 1996.
The petitioner sought to set aside an award dated July 15, 2021, by the MSME Facilitation Council, Kanpur, which directed payment of Rs. 24,15,835/-. Allegations were made about the award being passed ex parte without proper service, and the claim was argued to be barred by limitation. The petitioner contended that the proceedings violated principles of natural justice and lacked jurisdiction, urging the High Court to exercise its writ powers.
The court, however, held that issues of service and limitation were mixed questions of fact and law requiring examination by the competent statutory forum, not the writ jurisdiction. It reiterated that Section 34 of the Arbitration Act provides an adequate mechanism to challenge such awards, as emphasized by the Supreme Court in similar cases.
The judgment also referenced previous decisions, including India Glycols Ltd. v. Micro and Small Enterprises Facilitation Council, which affirmed that bypassing statutory remedies via writ petitions is impermissible. The court highlighted that adjudicating procedural irregularities requires factual determination and cannot be addressed within the narrow confines of writ jurisdiction.
The petitioner had already approached the Executing Court, and applications concerning the award's execution were pending. The High Court directed these applications to be decided expeditiously, allowing the petitioner to pursue statutory remedies as applicable. The court underscored that accepting the petitioner's approach would undermine the statutory framework of arbitration review under Section 34, a redundancy it deemed legally unacceptable.
Bottom line:-
Writ jurisdiction under Article 226 cannot be invoked to challenge arbitral awards passed under the Micro, Small and Medium Enterprises Development Act, 2006, especially where statutory remedies under Section 34 of the Arbitration and Conciliation Act, 1996 are available.
Statutory provision(s): Article 226 of the Constitution of India, Micro, Small and Medium Enterprises Development Act, 2006 - Section 18, Arbitration and Conciliation Act, 1996 - Sections 34, 43.
