Understanding the conflict between MSME and Arbitration Act

  • Mohit Kukadia
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  • Mohit Kukadia

    LLM Student at Gujarat National Law University, India.

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Since the MSMED Act and the Arbitration and Conciliation Act both talk about arbitration, there was bound to be a dispute between the provisions of the two Acts. The Arbitration Act is the primary statute for arbitration and arbitral proceedings, thus, it is inevitable that the MSMED Act relies on the procedural provisions of the Act. Nonetheless, the later Act also seeks to override the provisions of the Arbitration and Conciliation Act by giving certain special incentives to the MSMEs alone. One of the differences between the Acts is the difference in the mandatory pre-deposit percentage. Under the MSMED Act, when a dispute is filed, the pre-deposit is 75% while under the Arbitration and Conciliation Act; the pre-deposit is 100% of the amount in terms of the decree/order/award for entertaining an application for setting aside the Award. Like this, there are several other differences on the same issue in the two Acts. The major dispute is which of the two Acts prevail when there is the question of Micro, Small, and Medium Enterprises. The general rule is that specific laws prevail over general laws. However, the Arbitration and Conciliation Act, 1996, and the Micro, Small, and Medium Enterprises Development Act are special laws. Different High Courts have given different judgments on the issue. Some conclude that the MSMED Act will prevail over the Arbitration and Conciliation Act and some hold that the Arbitration Act will prevail over the MSMED Act. In the present paper, the author aims to further understand the conflict between the acts in the dissertation with the help of their respective legislation.


Research Paper


International Journal of Law Management and Humanities, Volume 5, Issue 2, Page 1100 - 1108

DOI: https://doij.org/10.10000/IJLMH.112895

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