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

Conciliation of a reference before the MSE Facilitation Council ends without any settlement between Kiran Textiles (supplier) and Bharat Mills Ltd (buyer). Under Section 18(3), what is the position next?

The Council must itself take up the dispute for arbitration or refer it to an ADR institution or centre for arbitration. The Arbitration and Conciliation Act then applies as if an arbitration agreement under its section 7(1) existed, so no fresh agreement is required.

  1. AThe reference lapses and the supplier must file a civil suit
  2. BThe Council must start conciliation afresh under Part III
  3. CThe Council may itself take up the dispute for arbitration or refer it to an ADR institution or centre for arbitration, and the Arbitration and Conciliation Act applies as if there were an arbitration agreement under its section 7(1)Correct
  4. DThe dispute can go to arbitration only if both parties sign a fresh arbitration agreement

Explanation

Section 18(3) provides that where conciliation fails and terminates without settlement, the Council shall itself take up arbitration or refer it to an ADR institution or centre. The Arbitration and Conciliation Act then applies as if the arbitration were under an agreement referred to in section 7(1). No fresh agreement is needed.

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