The interplay between the Micro, Small and Medium
Enterprises Development Act, 2006 ("MSMED
Act") and the Arbitration and Conciliation Act,
1996 ("Arbitration Act") continues
to give rise to legal tension, particularly where statutory
protections under the MSMED Act intersect with the underlying
arbitration agreements.
In Dalmia Cement (Bharat) Ltd. v. M/s Ess Ess Technofabs
Pvt. Ltd,1 the Delhi High Court authoritatively
reaffirmed the trajectory of the Supreme Court's jurisprudence
on this issue. The Court held that upon a valid invocation of
Section 18 of the MSMED Act by a supplier, the statutory dispute
resolution framework prescribed therein assumes primacy and
overrides any pre-existing contractual arbitration clause between
the parties.
