If Conciliation fails, then Section 18(3) of MSMED Act, 2006 is invoked and MSE Facilitation Council shall take up the dispute for arbitration itself or refer to any institution or centre – Bafna Udyog Vs. Micro & Small Enterprises, Facilitation Council and Anr. – Bombay High Court

Hon’ble Bombay High Court held that the bare reading of Section 18 of Micro, Small & Medium Enterprises Development Act, 2006 clearly provides for a specific mechanism being firstly, the counsel shall conduct conciliation in the matter or make a reference to any institution for conducting conciliation. If the conciliation fails, then Section 18(3) is invoked and the council shall take up the dispute for arbitration itself or refer to any institution or centre. It is only then that the provisions of the Act shall apply to the dispute as if the arbitration was in pursuance of Section 7 of the Act. Thus, it is only when the council or its designate enters into reference that the provisions of the Act will apply.

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