The Delhi High Court (‘DHC’) affirmed the order of lower Court which had set aside an arbitral award for not awarding interest in terms of Section 15 and 16, which deal with liability of buyer to make payment and the rate at which the interest is payable respectively, of the Micro, Small and Medium Enterprises Development Act, 2006 (‘MSMED Act’), without giving any reason.
The HC observed that Section 15 and 16 of the MSMED Act are mandatory provisions and held “it was incumbent upon the Arbitral Tribunal to indicate its reasons for denying the benefit under Sections 15 and 16 of the MSMED Act to the respondent.”
