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As per case facts, the petitioner, after delayed supplies by the 2nd respondent, imposed liquidated damages. The 2nd respondent approached the 1st respondent Council, which passed an award against the
...petitioner. The petitioner challenged this award under Section 34 of the Arbitration and Conciliation Act, 1996, in this Court. A preliminary objection was raised regarding territorial jurisdiction, as the award was from a Rajasthan Council, while the contract specified Chennai as the arbitration seat. The question arose whether the court of the agreed contractual 'seat' (Chennai) or the court where the MSME Facilitation Council proceedings took place (Rajasthan) has jurisdiction to entertain a Section 34 petition. Also, if the Council adhered to proper procedure. Finally, the Court held that the MSMED Act overrides only the arbitral procedure and venue, but the contractually agreed 'seat' revives post-award for Section 34 challenges. The Court also found the Council violated the MSMED Act by not conducting conciliation and passing an ex parte award without proper notice.
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