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Section 18(3) MSMED Act – Reference can only be made to “Arbitral Institution”

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The respondent no.2 made reference to the HP MS Enterprise Facilitation Council for Rs.2,60,65,515/-.

After failure of conciliation, the Council referred the dispute to arbitration under Sectio 18(3) of the MSMED Act

On 29.6.2022, the Arbitrator issued notice to the petitioner to appear on 25.7.2022.  The request of the petitioner for change of date was denied.  Not only that but the ex parte award was passed on 29.9.2022.

Section 18 falls within the ambit of Chapter V of the Act that contains Sections 15 to 25 and bears the heading “Delayed Payments to Micro and Small Enterprises.” In terms of Section 18(1), which provides for a reference to the Micro and Small Enterprises Facilitation Council, any party to a dispute with regard to any amount due under Section 17 may make a reference to the Micro and Small Enterprises Facilitation Council.

Judgment dated 7.7.2026 of the High Court of Himachal Pradesh in Writ Petition (Civil) No.8278 of 2022 of M/s Tynor Orthotics Pvt Ltd   Vs.  Himachal Pradesh Micro & Small Enterprises Facilitation Council and others with connected matters

HP HC Clarified MSME Facilitation Council’s Powers in Arbitral Disputes

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