Synopsis

The appellant (judgment‑debtor) challenged an order passed by a learned single judge in an application seeking exemption from pre‑deposit under Section 19 of the MSMED Act. The single judge had directed the appellant to deposit 75% of the principal amount awarded (Rs. 30,71,386/-) along with simple interest at 6.5% per annum from a specified date, as a condition for maintaining its challenge to the arbitral award under Section 34 of the Arbitration Act. The appellant contended that the single judge erred by applying simple interest instead of the compound interest stipulated in the award. The division bench dismissed the appeal, holding that the order under challenge was not appealable under Section 13 of the Commercial Courts Act read with Order XLIII CPC, nor under Section 37 of the Arbitration Act. The court also clarified that the single judge had not waived or reduced the mandatory pre‑deposit; the reference to “simple interest” was only because the interest portion of the award was indeterminable.

Court: High Court of Judicature at Madras
Coram: C.V. Karthikeyan & K. Kumaresh Babu, JJ.

Date: April 2, 2026
Citation: 2026:MHC:1329
Core Law: Arbitration and Conciliation Act, 1996 – Section 37; Commercial Courts Act, 2015 – Section 13; Micro, Small and Medium Enterprises Development Act, 2006 – Section 19; Code of Civil Procedure – Order XLIII.

2. Legal Framework

• Micro, Small and Medium Enterprises Development Act, 2006: Section 19 – pre‑deposit of 75% of the awarded amount as a condition for filing an application to set aside an arbitral award under Section 34 of the Arbitration Act.

• Arbitration and Conciliation Act, 1996: Section 34 (setting aside of award); Section 37 (appealable orders).

• Commercial Courts Act, 2015: Section 13 – appeals from decrees and orders of Commercial Courts/Divis

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