Jurisdiction Tussle between MSME Act and Arbitration Agreement: Opportunity Lies With the Supreme Court to Clear the Mist

By Khushi Mishra and Rajeev Dadhich, Students at Institute of Law, Nirma University

Since the enactment of the Micro, Small and Medium Enterprise Development Act, 2006 (The “MSME Act”) a major dispute is between the institutional arbitration under Section 18 of the MSME Act and a sole arbitration as per Arbitration agreement (“AA”) constituted between the parties.  As per Section 18 of the MSME Act which is the non- obstante clause, the Micro, Small and Medium Enterprises Facilitation Council shall either itself take up the dispute for arbitration or refer it to any institution to conduct arbitration. However, in the event of AA constituted between the parties, the parties are at the liberty to appoint a sole arbitrator to adjudicate their disputes. Therefore, the debated dispute ongoing is that what will prevail between institutional arbitration under section 18 and sole arbitration as per AA.

Continue reading “Jurisdiction Tussle between MSME Act and Arbitration Agreement: Opportunity Lies With the Supreme Court to Clear the Mist”