Authority: Supreme Court of India, Civil Appellate Jurisdiction
Order Date: August 5, 2026
Case Overview
- Parties: Appellant – M/s Patel Infrastructure Limited (registered office at Ahmedabad, Gujarat); Respondent – M/s Aditya Construction (proprietorship, office at Basti, Uttar Pradesh).
- Nature of proceedings: Civil Appeal (Special Leave Petition (C) No. 3250 of 2026) challenging whether a buyer of goods/services from an MSME governed by the Micro, Small and Medium Enterprises Development Act, 2006 can independently invoke the Arbitration and Conciliation Act, 1996 to initiate arbitration against the MSME.
- Counsel: Ms. Tanyiya Bansal appeared for the appellant, relying on Delhi High Court decision in Uniseven Engineering and Infrastructure Pvt. Ltd. vs. Micro and Small Enterprises Facilitation (MSEF) Council, District (South) (W.P. (C) 11233/2021, decided July 5 2023) and Calcutta High Court decision in Essar Oil and Gas Exploration and Production Limited vs. Gargi Travels Private Limited (A.P. No. 73 of 2023, decided April 20 2023).
- Respondent’s position: Senior counsel Mr. Sanjay Bhaseen, on behalf of the MSME, agreed to appoint an arbitrator through the Delhi International Arbitration Centre (DIAC) and suggested New Delhi as the arbitration venue for convenience of both parties.
Final Outcome
- The Court granted leave and disposed of the appeal, directing the Delhi International Arbitration Centre to appoint a suitable arbitrator under the Arbitration and Conciliation Act, 1996.
- Arbitration venue fixed at New Delhi.
- The appellant must approach DIAC within two weeks from receipt of a certified copy of this order.
- The substantive question of law on the applicability of arbitration against MSMEs is left open for consideration in a future appropriate case.
- Parties shall bear their own costs.
- Order signed by Justice Sanjay Kumar and Justice Sanjeev Sachdeva.
Topics: Arbitration, MSME Law