Karnataka, April 2 -- The Karnataka High Court has ruled that the Micro and Small Enterprises Facilitation Council (MSEFC) cannot pass an award if conciliation fails without referring the matter to arbitration.

Justice Suraj Govindaraj, while allowing the petition filed by M/s Enmas GB Power Systems Projects Ltd, stated that the Council must first terminate conciliation proceedings and then decide whether to conduct arbitration itself or refer it to an institution.

Justice Govindaraj highlighted that under Section 18(2), the Council could either conduct conciliation itself or refer the matter to an institution.

If conciliation failed, the Council was required to terminate the process before proceeding to arbitration, either on its own ...