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

Sri Ganesh Tools, a micro enterprise supplier in Coimbatore, has not been paid by Aditya Retail Ltd, a buyer located in Kolkata, for goods supplied. Sri Ganesh wants to approach the MSE Facilitation Council in Tamil Nadu. Under Section 18 of the MSMED Act, 2006, can that Council act?

Yes. Under Section 18(4), the Council can act as arbitrator or conciliator where the supplier is located within its jurisdiction, and the buyer may be located anywhere in India. The buyer's location or consent does not limit the Council's jurisdiction.

  1. ANo, because the buyer is located outside the State of the Council
  2. BYes, because the Council has jurisdiction over a supplier located within its jurisdiction and a buyer located anywhere in IndiaCorrect
  3. CYes, but only if the buyer consents in writing to the Council's jurisdiction
  4. DNo, because only a civil court can decide disputes between parties in different States

Explanation

Section 18(4) gives the Council or the ADR centre jurisdiction to act as arbitrator or conciliator in a dispute between a supplier located within its jurisdiction and a buyer located anywhere in India. The supplier is in Coimbatore, so the Tamil Nadu Council can act. The buyer's location in Kolkata and its consent are irrelevant.

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