Orissa High Court sets aside massive MSME arbitration award against JSW Steel

The Orissa High Court set aside a financial award amounting to ₹5.03 crore issued against JSW Steel by a micro and small enterprise facilitation council. The court invalidated the decision by highlighting fundamental flaws, including the absence of established supplier eligibility, improper arbitration procedures, and a lack of proper statutory jurisdiction.

This judgment reinforces the principle that statutory facilitation councils must rigorously verify claimant credentials and follow due process before issuing binding monetary awards against corporate buyers. Jurisdictional boundaries and valid supplier registrations are mandatory prerequisites under the relevant enterprise development laws, preventing invalid claims from progressing through expedited arbitration channels.

Litigants and corporate legal advisors must verify vendor registration timelines and jurisdictional prerequisites before initiating or defending recovery proceedings under the enterprise facilitation mechanism. Parties should monitor further legal developments or potential appeals related to vendor eligibility standards.