Arbitration –Maintainability of  Section 9 Application against MSME

Arbitration –Maintainability of  Section 9 Application against MSME -and the relationship of Lessor and Lessee between the parties.

By the Master Lease Agreement dated 9.12.2016, the respondent no.1 had leased certain machinery to the appellant no.1 registered as MSME.

However, the appellant no.1 not only failed to pay lease rent but also removed the machinery in breach of lease agreement.

Respondent no.1 had, therefore, filed section 9 application  pursuant to arbitration Clause 30 of the Lease Agreement.

One of the contentions of the appellants was that appellant no.1 is MSME is given blanket protection and therefore, the application under section 9 of AA for interim relief is maintainable.

The learned Single Judge, however, granted interim reliefs under Section 9 of the Arbitration and Conciliation Act, 1996, against the appellants including appellant no.1 registered under MSMED Act.

HELD, while dismissing the appeal, that the respondent no.1 is neither a bank nor creditor of appellant and the relationship is of lessor and lessee.   Therefore, the MSMED Act and also the Notification dated 29.5.2015 are not applicable to the facts of the case.

 Judgment dated 26.9.2023 of the Bombay High Court in Commercial Arbitration Appeal (L) No.25189 of 2023 in Commercial Arbitration (L) NO.20143 of 2023 – Satiate Engineering (India) Pvt Ltd and others Vs. Siemens Financial Services Pvt Ltd and another