Date:April 7, 2023
MSME Facilitation Council Territorial Jurisdiction – Where it lies?
MSME Law Notes by NB Associates
According to Section 18(4) of the Micro, Small and Medium Enterprises Development Act, 2006, the Micro and Small Enterprises Facilitation Council (MSEFC) has the jurisdiction to act as an Arbitrator or Conciliator in a dispute between an MSME supplier and a buyer located anywhere in India, despite any other law in force.
However, the territorial jurisdiction of the MSEFC is limited to the state or union territory where the MSME supplier is located.
For instance, if an MSME supplier in Delhi has a dispute with a buyer in another state regarding delayed payment, the MSME can approach the MSEFC in Delhi for resolution.
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It’s essential to note that the MSEFC is established under the Micro, Small and Medium Enterprises Development (MSMED) Act, 2006, and it can only resolve disputes related to delayed payments to MSMEs. In case of other disputes or claims, MSMEs may have to approach other forums or authorities as per the applicable laws and regulations.
Thus, the MSME supplier can file the dispute claim in the jurisdiction where they are located, and the conciliation or arbitration proceedings will also take place in the same location.
In conclusion, Section 18(4) of the MSMED Act, 2006 provides the MSEFC with the jurisdiction to act as an Arbitrator or Conciliator in disputes between MSMEs and buyers located anywhere in India. However, the territorial jurisdiction of the MSEFC is limited to the state or union territory where the MSME supplier is located.
The MSEFC provides a mechanism for the speedy and cost-effective resolution of disputes related to delayed payments to MSMEs.
The MSEFC’s success in resolving disputes has been a significant boost to the MSME sector, and it has helped in promoting a culture of entrepreneurship and innovation.