Appropriate Forum To Appeal: Interplay Between MSMED Act, 2006, The Arbitration & Conciliation Act, 1996 And Writ Jurisdiction

Introduction 

‘The Arbitration and Conciliation Act, 1996’, (‘the A&C Act’), is the fundamental law for arbitration in India, which remains in conflict with other statutory provisions providing dispute resolution Mechanism. One such intersection is with the ‘Micro, Small and Medium Enterprises Development Act, 2006’ (‘the MSMED Act’), which was enacted for the development and promotion of micro, small and medium enterprises ensuring the recovery of any delayed payments by the buyer1 (also known as non-MSME entities) to supplier (micro or small enterprises).  

Section 15 to 25 of the MSMED Act, 2006 provide protection to the suppliers against any delayed payment by buyers and obliges them to pay three times compound interest of the bank rate as notified by the RBI.2 Any dispute in furtherance of the same is referred to the Micro and Small Enterprises Facilitation Council (‘Facilitation Council’) for resolution.3 Subsequently, the Facilitation Council conduct the conciliation