Arbitration In IndiaEven if the number of Arbitrators are even, it does not attract any bar in an Arbitration under the MSMED Act

BESCO v. Hindon Chemicals Pvt. Ltd.

Court – Calcutta High Court

Citation – F.M.A.T (Arb. Award) No. 47 of 2023

Date – 08.07.2025

The Hon’ble Calcutta High Court has held that even if the number of Arbitrators are even, it does not attract any bar in an Arbitration under the MSMED Act as it does under the Arbitration & Conciliation Act, 1996 and it will not vitiate the award.

The Court held,

“56. Furthermore, a careful consideration of Section 10(1) of the 1996 Act shows that the fetter as to even numbers applies only when the parties themselves determine the number of arbitrators. As opposed thereto, an arbitration under Section 18(3) of the 2006 Act is a statutory arbitration, emanating from the 2006 Act, and governed by the provisions of the said Act. Hence, the bar restricting the number of arbitrators to even numbers, which is applicable when the parties themselves appoint arbitrators under the 1996 Act, is not attracted to a statutory arbitration under Section 18 (3) of the 2006 Act, where the reference to arbitration is mandated by statute in respect of micro, small scale and medium enterprises and the provisions of the 1996 Act are made applicable merely by legal fiction created under Section 18 (3) of the 2006 Act.

57. As such, even if the number of the Council members who acted as arbitrators in the present case was four (an even number), it per se does not vitiate the award.”

– Team AMLEGALS

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