Arbitration Agreements

Arbitration without signatures no bar to refer dispute to arbitration: Supreme Court reinforces enforcement of arbitration agreements through performance

Summary: In the case of Glencore International AG v. Shree Ganesh Metals, the issue before the Supreme Court was whether an unsigned arbitration agreement could bind parties based on their conduct and correspondence. Answering in affirmative, the Court held that such agreements are enforceable if parties are ad idem and have acted upon the contract terms, including arbitration clauses. The ruling affirms India’s pro-arbitration stance, ensuring legal certainty for modern commercial transactions involving conclusion via electronic communication and performance.Continue Reading Arbitration without signatures no bar to refer dispute to arbitration: Supreme Court reinforces enforcement of arbitration agreements through performance

Introduction

The Micro, Small and Medium Enterprises Development Act, 2006 (“MSME Act”), aims to promote,  develop and enhance the competitiveness of MSMEs. To address the issue of delayed payments, several provisions of the MSME Act provide additional safeguards and benefits to MSMEs. One such safeguard is Section 15, which outlines the buyer’s liability to make payments due to MSMEs once the goods or services are accepted/ deemed to be accepted.[1] Similarly, Section 16, read with Section 17, states that delays in payments for goods supplied or services rendered by MSMEs, shall attract a compound interest rate of three times the bank rate notified by the Reserve Bank of India.[2] Further, reference to the Micro and Small Enterprises Facilitation Council (“MSEFC”) for any amount due under Section 17 can be made under Section 18. However, questions on the applicability of this statutory provision are raised, when parties to a dispute do not invoke the MSEFC mechanism and go under the pre-existing arbitration agreements.Continue Reading Arbitration Agreements v. MSME Act: Can interest rates under MSME Act survive outside of Section 18 proceedings?