MA Schedule 7 : Amendment to MSME Development Act, 2006

Explanation using Example

Example 1: Dispute Resolution for Unpaid Invoices

Introduction: ABC Manufacturing, a small enterprise based in Mumbai, supplied goods worth INR 5 lakh to XYZ Retailers, a large retail chain located in Delhi. Despite repeated reminders, XYZ Retailers has not paid the invoice, which is now overdue by 90 days.

Application: Under Section 18(1) of the Mediation Act, 2023, ABC Manufacturing can refer the dispute to the Micro and Small Enterprises Facilitation Council (MSEFC) for mediation regarding the unpaid amount. Upon receiving the reference, as per Section 18(2), the Council may conduct mediation itself or refer the matter to a mediation service provider.

Outcome: If the mediation is successful, both parties will reach a settlement, and XYZ Retailers will pay the due amount. However, if mediation fails, as per Section 18(4), the Council will either arbitrate the dispute itself or refer it to an alternative dispute resolution center for arbitration, applying the Arbitration and Conciliation Act, 1996.

Conclusion: By following this process, ABC Manufacturing can seek a resolution to the payment dispute, ensuring that the legal framework supports small enterprises in recovering dues efficiently.

Example 2: Cross-Jurisdictional Dispute

Introduction: DEF Textiles, a micro-enterprise in Chennai, supplied fabric to GHI Fashion House, a buyer located in Kolkata. GHI Fashion House disputes the quality of the fabric and refuses to pay the remaining INR 2 lakh.

Application: According to Section 18(5) of the Mediation Act, 2023, the MSEFC in Chennai has jurisdiction to mediate or arbitrate the dispute, ...

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