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

Conciliation of a dispute before a Facilitation Council has terminated without any settlement. As per the MSMED Act, 2006, what follows?

The Council itself takes up the dispute for arbitration or refers it to an institution or centre providing alternate dispute resolution services for arbitration. The Arbitration and Conciliation Act, 1996 then applies as if an arbitration agreement under its section 7(1) existed.

  1. AThe reference lapses and the supplier must file a fresh suit
  2. BThe Council takes up the dispute for arbitration itself or refers it to an ADR institution or centre for arbitrationCorrect
  3. COnly the Central Government may appoint an arbitrator
  4. DThe dispute goes to the Advisory Committee for a binding decision

Explanation

Under section 18(3), when conciliation is unsuccessful, the Council either itself arbitrates or refers the dispute to an ADR institution or centre for arbitration. The Arbitration and Conciliation Act, 1996 then applies as if there were an arbitration agreement under its section 7(1).

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