Tag: Construction Contract Dispute

Supreme Court Upholds MSMED Act’s Supremacy, Rejects Bengaluru Arbitration Clause : “MSMED Act Overrides Arbitration Agreements”
19May By The Legal ChamberNo Comments
Supreme Court

Supreme Court Upholds MSMED Act’s Supremacy, Rejects Bengaluru Arbitration Clause : “MSMED Act Overrides Arbitration Agreements”

The Supreme Court ruled that the Micro, Small and Medium Enterprises (MSMED) Act, 2006 overrides arbitration agreements under the Arbitration and Conciliation Act, 1996, affirming its special law status. It held that the supplier’s location determines arbitration jurisdiction, disregarding contractual seat clauses. The judgment reinforces statutory protection for MSMEs, ensuring disputes proceed before designated Facilitation Councils as per Section 18(4). Facts Of The Case: The dispute arose from a construction contract between M/s Harcharan Dass Gupta (Appellant), an MSME-registered supplier, and ISRO (Respondent), following a 2017 tender for staff quarters in Delhi. The agreement included an arbitration clause designating Bengaluru as the seat. When conflicts emerged, the supplier app...
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Supreme Court Clarifies Jurisdiction Over Bank Guarantees in Section 9 Arbitration Petitions
7May By The Legal ChamberNo Comments
Supreme Court

Supreme Court Clarifies Jurisdiction Over Bank Guarantees in Section 9 Arbitration Petitions

The Supreme Court upheld the High Court's interim order restraining encashment of a bank guarantee during pending Section 9 arbitration proceedings under the Arbitration Act. The Court emphasized that judicial interference with bank guarantees is permissible only to prevent irretrievable injustice, while leaving open questions regarding maintainability of Article 227 petitions against interlocutory orders in arbitration matters. The ruling preserves the arbitral process by directing the Commercial Court to decide the Section 9 petition within eight weeks, subject to continued extension of the bank guarantee validity. The judgment balances contractual sanctity of bank guarantees with equitable considerations in ongoing arbitration. Facts Of The Case: Jindal Steel & Power Ltd. awarded ...
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