Bombay HC rules that challenges to MSMED awards must follow exclusive jurisdiction clauses.
Jurisdiction Clause Prevails in MSMED Disputes
The Bombay High Court held that challenges to arbitral awards under the MSMED Act must be filed exclusively in the courts specified in the arbitration agreement. The Court dismissed a petition filed in contravention of the jurisdiction clause.
The ruling reinforces Section 2(1)(e) of the Arbitration and Conciliation Act, which upholds party autonomy in determining dispute forums. The Court rejected the argument that statutory status of MSME Councils overrides contractual jurisdiction terms.
This decision promotes consistency with the 'kompetenz-kompetenz' principle and supports the enforceability of forum selection clauses in SME contracts.
