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CS Executive · Setting Up of Business, Industrial and Labour Laws · Micro, Small and Medium Enterprises

A reference is made to a Facilitation Council under section 18 of the MSMED Act, 2006. What must the Council do first on receiving it?

On receiving a reference, the Council must first either conduct conciliation itself or refer the matter to an alternate dispute resolution institution or centre for conciliation. Arbitration comes only later, if conciliation is unsuccessful and ends without a settlement between the parties.

  1. AImmediately take up the dispute for arbitration
  2. BConduct conciliation itself or refer it to an ADR institution or centre for conciliationCorrect
  3. CTransfer the dispute to the civil court having jurisdiction
  4. DDirect the buyer to deposit the claimed amount and close the matter

Explanation

Section 18(2) requires the Council either to conduct conciliation itself or to seek the help of an institution or centre providing ADR services for conciliation. Arbitration under section 18(3) comes only after conciliation fails and terminates without settlement.

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