MSMED Act Will Prevail Over Arbitration Act In Disputes Involving MSMEs: Delhi High Court

Introduction

In a recent ruling, the Delhi High Court, in Idemia Syscom India Private Limited v. M/s Conjoinix Total Solutions Private Limited [2025:DHC:1205], dismissed a petition seeking the appointment of an arbitrator under Section 11 of the Arbitration and Conciliation Act, 1996 ("A&C Act"). The High Court held that since the Respondent had already invoked the dispute resolution mechanism under the Micro, Small and Medium Enterprises Development Act, 2006 ("MSMED Act"), the arbitration agreement between the parties could not override the statutory provisions of the MSMED Act. The decision of the High Court reinforces the supremacy of the MSMED Act in disputes involving registered MSMEs, affirming that its statutory framework takes precedence over private arbitration agreements. In this article, we navigate through the facts of the case and the findings rendered by the High Court.