MSMED reference jurisdiction: tribunal may decide threshold objections, with later challenge available under arbitration law.

Section 18(3) of the MSMED Act operates within its own statutory framework and is not subject to the same pre-referral scrutiny as Section 11(6) of the Arbitration and Conciliation Act, 1996. Once a reference is made, the arbitral tribunal under the MSMED Act may decide its own jurisdiction, including objections based on alleged absence of privity of contract, lack of MSME registration, or the nature of the contract, by applying Section 16 of the Arbitration and Conciliation Act, 1996. Any such jurisdictional determination remains open to challenge under Section 34 of the Arbitration and Conciliation Act, 1996. The jurisdictional objections were therefore not a ground to interfere with the reference.

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Issues: Whether the reference made under Section 18(3) of the MSMED Act could be assailed on the basis that the Facilitation Council lacked jurisdiction because of alleged absence of privity of contract, absence of MSME registration, or the nature of the contract.

Analysis: Section 18 of the MSMED Act operates in its own statutory framework and is not equivalent to the pre-referral scrutiny contemplated under Section 11(6) of the Arbitration and Conciliation Act, 1996. Once the matter is referred, the arbitral tribunal constituted under the MSMED Act can decide questions relating to its own jurisdiction, including objections as to inherent jurisdiction and other threshold objections, by virtue of Section 16 of the Arbitration and Conciliation Act, 1996. Any determination on such issues remains open to challenge under Section 34 of the Arbitration and Conciliation Act, 1996.

Conclusion: The jurisdictional objections were not a ground to interfere with the reference and the appeal failed.

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