“MSME FACILITATION COUNCIL AS A STATUTORY ARBITRATION TRIBUNAL: LEGAL AND PRACTICAL CHALLENGES”

AUTHOR – A. SANTHOSH KUMAR* & C. SOPHIA JEYAKAR**

* STUDENT AT SCHOOL OF LAW, VELS INSTITUTE OF SCIENCE, TECHNOLOGY AND ADVANCED STUDIES (VISTAS)

** ASSISTANT PROFESSOR AT SCHOOL OF LAW, VELS INSTITUTE OF SCIENCE, TECHNOLOGY AND ADVANCED STUDIES (VISTAS)

BEST CITATION – A. SANTHOSH KUMAR & C. SOPHIA JEYAKAR, “MSME FACILITATION COUNCIL AS A STATUTORY ARBITRATION TRIBUNAL: LEGAL AND PRACTICAL CHALLENGES”, INDIAN JOURNAL OF LEGAL REVIEW (IJLR), 6 (6) OF 2026, PG. 758-768, APIS – 3920 – 0001 & ISSN – 2583-2344. DOI – https://doi.org/10.65393/IJLRV6I6479

Abstract

Micro, Small and Medium Enterprises (MSMEs) are among the most vital contributors to India’s economy, yet they have long suffered the crippling effects of delayed payments from buyers. The Micro, Small and Medium Enterprises Development Act, 2006 (MSMED Act) responded to this crisis by establishing the MSME Facilitation Council under Section 18—a statutory body empowered to resolve payment disputes through conciliation and arbitration. While this was a landmark legislative step, the Council’s functioning as a statutory arbitration tribunal has opened up a web of legal and practical difficulties that continue to strain the system. This paper, divided into two chapters, examines the statutory framework governing the Council and the substantive challenges that have emerged in its operation. Drawing on judicial decisions, constitutional principles, and comparative international experience, it argues for meaningful reform to make the Council a truly effective and fair dispute resolution forum.

Keywords: MSME, Facilitation Council, Statutory Arbitration, MSMED Act 2006, Delayed Payments, Dispute Resolution, Section 18, Pre-deposit, Jurisdictional Conflict, Natural Justice.