Case Note & Summary
The High Court dismissed two Commercial Arbitration Petitions challenging arbitral awards passed by an Arbitrator appointed under Section 84 of Multi-State Co-operative Societies Act, 2002 -- The Petitioners had defaulted on loan repayments to Abhyudaya Co-op Bank, leading to arbitration proceedings under MSCS Act and parallel SARFAESI Act proceedings -- The Petitioners challenged the Arbitrator's jurisdiction, arguing that banking debt recovery should be governed by RDB Act and SARFAESI Act as central legislation -- The Court rejected these arguments, holding that MSCS Act provides for statutory arbitration for disputes between members and co-operative societies, and there is no conflict with other banking legislation -- The Court emphasized the limited scope of Section 34 of Arbitration and Conciliation Act, 1996 and upheld the Arbitrator's findings on jurisdiction and maintainability of disputes
Headnote
The High Court of Judicature at Bombay dismissed Commercial Arbitration Petitions filed under Section 34 of Arbitration and Conciliation Act, 1996 challenging arbitral awards passed under Section 84 of Multi-State Co-operative Societies Act, 2002 -- The Court held that the Arbitrator had jurisdiction to decide the disputes as the Petitioners were members of the Respondent Bank -- The Court found no conflict between Multi-State Co-operative Societies Act, 2002 and The Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act) or The Recovery of Debts and Bankruptcy Act, 1993 (RDB Act) -- The Court emphasized the restrictive scope of Section 34 of Arbitration and Conciliation Act, 1996 and declined to interfere with factual findings of the Arbitrator
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Issue of Consideration: The Issue of jurisdiction of Arbitrator under Section 84 of Multi-State Co-operative Societies Act, 2002 in disputes involving recovery of banking debts and whether there is conflict with SARFAESI Act or RDB Act
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Final Decision
The High Court dismissed both Commercial Arbitration Petitions and upheld the arbitral awards -- The Court held that the Arbitrator had jurisdiction under Section 84 of Multi-State Co-operative Societies Act, 2002 as the Petitioners were members of the Respondent Bank -- The Court found no conflict between MSCS Act and SARFAESI Act or RDB Act -- The Court declined to interfere with factual findings of the Arbitrator given the restrictive scope of Section 34 of Arbitration and Conciliation Act, 1996
