Bharat Sanchar Nigam Ltd. v. Microtex Energy Pvt. Ltd., Comm. Arbitration Petition (L.) No. 33928 of 2024 with Interim Application (L.) No. 59 of 2025, decided by the High Court of Judicature at Bombay on 10 March 2026 by Hon’ble Mr. Justice Sandeep V. Marne.The petition arose from a challenge under Section 34 of the Arbitration and Conciliation Act, 1996 to an arbitral award dated 3 May 2024. The arbitral tribunal had directed Bharat Sanchar Nigam Ltd. (BSNL) to pay ?2.76 crore to Microtex Energy Pvt. Ltd., along with interest under the Micro, Small and Medium Enterprises Development Act, 2006 (MSMED Act) and Section 31(7) of the Arbitration Act. BSNL approached the Bombay High Court seeking to set aside the award.

Issue of Law

The Court examined whether the arbitral award suffered from jurisdictional error or patent illegality warranting interference under Section 34 of the Arbitration and Conciliation Act, particularly where the respondent was a registered MSME and the dispute involved payment claims arising from supply contracts.

Facts

BSNL issued an online tender in March 2016 for the supply of VRLA batteries. Microtex Energy Pvt. Ltd., a registered small enterprise, emerged as the successful bidder and received purchase orders for supply of batteries in multiple tranches during 2016. The supplier sought and obtained extensions of the delivery schedule.After supply was completed, BSNL contended that the finalised firm prices were lower than the provisional prices, resulting in an alleged overpayment of ?34.57 lakh. BSNL demanded a refund andlater invoked the performance bank guarantee to recover the amount. Microtex disputed the claim, asserting that substantial payment remained outstanding under the invoices and that the bank guarantee had been wrongly invoked. Following unsuccessful conciliation, arbitration proceedings commenced. The arbitral tribunal eventually awarded Microtex the claimed amounts along with statutory interest.

Judgment

The Bombay High Court dismissed the Section 34 challenge and upheld the arbitral award. The Court reiterated the limited scope of judicial review under Section 34, emphasizing that courts cannot re-appreciate evidence or substitute their own interpretation of contractual terms merely because another view is possible.Justice Marne observed that the arbitral tribunal had carefully examined the contractual documents, correspondence, and evidence led by the parties before concluding that Microtex was entitled to recovery of the outstanding amounts. The tribunal’s findings were based on factual appreciation and did not disclose any patent illegality, perversity, or violation of public policy. The Court also rejected BSNL’s objections relating to jurisdiction and the applicability of the MSMED framework, holding that such objections were either raised belatedly or lacked merit in the factual context of the dispute.

Access the Official Notification here

Subsequent Development

With the dismissal of the petition, the arbitral award in favour of Microtex Energy Pvt. Ltd. remains enforceable, and BSNL remains liable to satisfy the awarded amount along with statutory interest.

Court

In the High Court of Judicature at Bombay (Ordinary Original Civil Jurisdiction).

Case Title

Bharat Sanchar Nigam Ltd. v. Microtex Energy Pvt. Ltd.

Case Number

Comm. Arbitration Petition (L.) No. 33928 of 2024 with Interim Application (L.) No. 59 of 2025.

Bench

Hon’ble Mr. Justice Sandeep V. Marne.

Date of Judgment

10 March 2026.