Delhi High Court Halts Arbitration for Richa Global Exports
The Delhi High Court has paused arbitration proceedings involving Richa Global Exports, a key player in the garment industry. This decision came after Richa Global filed a writ petition against the Delhi International Arbitration Centre (DIAC) and the Micro & Small Enterprises Facilitation Council (MSEFC). The petition challenged orders from May 30, 2022, and August 9, 2024.
Advocate Sumit Gehlot, representing Richa Global, argued that the MSEFC’s reference under Section 18 of the MSMED Act was made without proper jurisdiction, violating precedents set by the Supreme Court and Delhi High Court. He cited cases like Silpi Industries v. Kerala State Road Transport Corp., which clarified that benefits under the MSMED Act are not retroactive, thus invalidating the appointment of a Sole Arbitrator by DIAC.
Gehlot also pointed out that Concot Yarn’s registration under the MSMED Act happened after the job work was completed, meaning the council had no authority to refer the matter to DIAC. Justice Sanjeev Narula, after reviewing these arguments, found the arbitration proceedings flawed due to jurisdictional issues and decided to stay them.
Richa Global is represented by Fidelegal Advocates & Solicitors, including Sumit Gehlot and TS Thakran. The court also noted that if registration under the Micro Small & Medium Enterprises Development Act 2006 is obtained later, the benefits of the Act would not apply.
Doubts Revealed
Delhi High Court -: The Delhi High Court is a court in India that deals with legal cases in the region of Delhi. It is one of the higher courts in the country.
Arbitration -: Arbitration is a way to solve disputes outside of court, where an independent person or panel makes a decision that is usually binding.
Richa Global Exports -: Richa Global Exports is a company that is involved in international trade, likely exporting goods from India to other countries.
Writ petition -: A writ petition is a formal written request to a court asking for a specific legal action or decision.
Delhi International Arbitration Centre -: The Delhi International Arbitration Centre is an institution that helps resolve disputes through arbitration, especially for international and commercial matters.
Micro & Small Enterprises Facilitation Council -: This council helps small businesses in India resolve disputes and get support, especially under the MSMED Act.
Advocate -: An advocate is a lawyer who represents and advises clients in legal matters.
MSMED Act -: The MSMED Act is a law in India that supports micro, small, and medium enterprises by providing benefits and protections.
Jurisdictionally flawed -: This means there is a problem with the legal authority or power of a body to make a decision or take action.
Supreme Court precedents -: These are past decisions made by the Supreme Court of India that guide how similar cases should be decided in the future.
Justice Sanjeev Narula -: Justice Sanjeev Narula is a judge at the Delhi High Court who made the decision to pause the arbitration proceedings.
Retroactively -: Retroactively means applying to a time before the current situation or decision, like applying a new rule to past actions.