The Supreme Court on August 5, 2026, disposed of a civil appeal between M/s Patel Infrastructure Limited and M/s Aditya Construction after both sides agreed to resolve their commercial dispute through arbitration before the Delhi International Arbitration Centre (DIAC). While doing so, the Court deliberately left open an important legal question concerning the rights of buyers dealing with Micro, Small and Medium Enterprises (MSMEs).
Background of the Case
The appeal raised a significant legal issue: whether a buyer of goods or services from an MSME can independently initiate arbitration under the Arbitration and Conciliation Act, 1996, instead of following the mechanism under the Micro, Small and Medium Enterprises Development Act, 2006. During the hearing, counsel for the appellant relied on earlier decisions of the Delhi and Calcutta High Courts to support its arguments.
During the proceedings, senior counsel appearing for the respondent informed the Court that the respondent was willing to resolve the dispute through arbitration under the Arbitration and Conciliation Act before the DIAC.
Accepting the proposal, the bench observed that it would be appropriate to bring the litigation to an end without further contest. As recorded in the order, “Accepting the fair offer... the appeal is disposed of” by requesting the DIAC to appoint a suitable arbitrator.
A bench of Justice Sanjay Kumar and Justice Sanjeev Sachdeva directed that the arbitration be conducted under the Arbitration and Conciliation Act, 1996, with New Delhi as the venue. The appellant was directed to approach the DIAC within two weeks of receiving the certified copy of the order.
Importantly, the Court clarified that the broader legal question regarding a buyer's right to independently invoke arbitration against an MSME has been left open for consideration in an appropriate future case.
The appeal was disposed of, with each party directed to bear its own costs.
Case Details
Case Title: M/s. Patel Infrastructure Limited v. M/s. Aditya Construction
Case Number: Civil Appeal No. ........ of 2026 (@ Special Leave Petition (C) No. 3250 of 2026)
Judge: Justice Sanjay Kumar and Justice Sanjeev Sachdeva
Decision Date: August 5, 2026
