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CS Professional · Arbitration, Mediation and Conciliation · Introduction to Conciliation and its Importance for MSMEs

Anand Engineering, a small supplier, makes a reference to the Facilitation Council under section 18 of the MSMED Act, 2006 for an unpaid amount. The Council decides to conduct conciliation itself. Which statement is correct?

Sections 65 to 81 of the Arbitration and Conciliation Act, 1996 apply. Under section 18(2) of the MSMED Act, 2006, the Council may conduct conciliation itself, and those provisions govern it as if it had been initiated under Part III of the 1996 Act.

  1. ASections 65 to 81 of the Arbitration and Conciliation Act, 1996 apply as if the conciliation was initiated under Part III of that ActCorrect
  2. BConciliation cannot be conducted by the Council itself and must be sent to a court
  3. CThe Arbitration and Conciliation Act, 1996 does not apply at all to the conciliation
  4. DOnly section 76 of that Act applies and the remaining conciliation provisions do not

Explanation

Section 18(2) provides that on receiving a reference, the Council either conducts conciliation itself or refers it to an ADR institution or centre, and sections 65 to 81 of the 1996 Act apply as if the conciliation was initiated under Part III. The other options contradict this.

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