How Long Does an MSME ODR Case Take in 2026?
An MSME ODR case can settle within 15 days at the voluntary pre-MSEFC stage, extendable to a maximum of 30 days with both parties’ consent. If it proceeds to the formal MSEFC process, the currently operative MSMED Act says the reference should be decided within 90 days—but courts have held that this 90-day period is a target, not an automatic cut-off.
So, in practice:
| Stage | Current 2026 timeline |
| Buyer’s initial reply | 3 days |
| Pre-MSEFC ODR | 15 days |
| Extension by mutual consent | Up to another 15 days |
| Maximum pre-MSEFC stage | 30 days |
| Formal Section 18 reference | Statutory target: 90 days |
| Actual contested case | Can exceed 90 days |
| Court challenge after award | Separate timeline |
There is no reliable official average number of days for a completed MSME ODR case in 2026. The correct distinction is between the portal’s prescribed timelines and the actual duration of a contested case.
How Fast Can an MSME ODR Case Settle?
If the buyer is willing to negotiate, a case can potentially be resolved during the first 15 days.
Under the official MSE-ODR Guidelines, the entire voluntary pre-MSEFC stage is intended to finish within 15 days from filing.
If both parties agree to continue negotiations, it can be extended for a further period not exceeding 15 days.
Therefore:
15 days normally → maximum 30 days with mutual consent.
This stage can include:
- Digital Guided Pathway;
- buyer response;
- document exchange;
- online negotiation; and
- settlement.
If settlement is reached, there may be no need to proceed to formal MSEFC adjudication.
How Quickly Must the Buyer Respond?
At the pre-MSEFC stage, the buyer is given three days from receipt of the automated communication to file a brief reply and supporting documents.
The ODR Portal sends the claim and documents electronically to the buyer. Unless the parties opt out, the portal can then move them through its voluntary dispute-resolution process.
The three-day deadline does not mean the supplier automatically wins if the buyer stays silent.
If the case proceeds further, the MSME still needs to establish its claim.
What Happens After 15 Days?
If no settlement is reached by day 15:
Both parties want to continue negotiating
The pre-MSEFC stage may continue for up to another 15 days.
One party does not want to continue
The voluntary pre-MSEFC stage ends and the matter can proceed into the formal MSEFC process.
The ODR Guidelines therefore prevent informal settlement discussions from continuing indefinitely.
How Long Does the Formal MSEFC Process Take?
Section 18(5) of the currently operative MSMED Act says that every reference should be decided within 90 days from the date the reference is made.
Under the present Section 18 framework:
- the MSEFC first conducts conciliation itself or refers the matter for conciliation;
- if conciliation succeeds, the dispute settles;
- if conciliation fails, the Council either conducts arbitration or refers it to an ADR institution; and
- an arbitral award ultimately decides the dispute.
This creates the commonly quoted:
“90-day MSME recovery timeline.”
But that needs an important qualification.
Is the 90-Day MSEFC Deadline Mandatory?
No. Courts have held that expiry of 90 days does not automatically terminate the MSEFC proceeding.
In MDD Medical Systems (India) Pvt. Ltd. v. Delhi International Arbitration Centre, decided by the Delhi High Court on 25 April 2025, the Court held that Section 18(5)’s 90-day timeline is directory rather than mandatory because the MSMED Act does not say that the proceeding automatically terminates once 90 days expire.
That means:
90 days is the statutory disposal objective, not a guaranteed completion period.
An MSME should therefore not assume:
“My claim must legally finish exactly three months after filing.”
A contested case can take longer.
Why Can an MSME ODR Case Take Longer Than 90 Days?
Typical causes include:
- difficulty serving the buyer;
- jurisdiction objections;
- eligibility disputes;
- disputes about Udyam registration;
- multiple invoices or contracts;
- buyer counterclaims;
- incomplete documents;
- adjournments;
- failed conciliation;
- appointment of an external arbitration institution;
- lengthy pleadings;
- valuation or technical evidence;
- several respondents; and
- challenges concerning limitation.
The supplier can reduce avoidable delay by filing a properly reconciled and documented claim from the beginning.
What Is a Realistic Timeline in 2026?
There is no official published average that allows a reliable statement such as:
“Every MSME ODR case finishes in 60 days.”
A more accurate expectation is:
Straightforward case that settles early
Within 15–30 days may be possible.
Case entering formal MSEFC proceedings
The statutory target is 90 days from the Section 18 reference.
Heavily contested case
It may take longer than 90 days, because courts have held that the statutory 90-day period does not automatically end the Council’s jurisdiction.
Case challenged after an award
Court proceedings can add a separate period after the ODR/MSEFC case itself.
Is the New ODR System Actually Resolving Cases Quickly?
The system is still relatively new.
The Ministry of MSME’s 2025–26 Annual Report stated that the ODR Portal had disposed of 17 cases during its first eight months, of which:
- 15 were resolved at the pre-MSEFC amicable-settlement stage; and
- 2 were resolved at the conciliation stage.
Those cases involved ₹60.60 lakh.
A Parliamentary Committee subsequently highlighted the small number of disposals relative to the scale of MSME delayed-payment disputes.
These figures show that early settlement through the portal is possible, but they do not establish an average per-case completion time.
Does the MSMED Amendment Act, 2026 Change the Timeline?
It will create a more detailed timeline once the relevant amendments commence.
The Micro, Small and Medium Enterprises Development (Amendment) Act, 2026, Act No. 16 of 2026, received Presidential assent on 13 August 2026. The Act itself provides that it will come into force on dates separately notified by the Central Government and allows different provisions to commence on different dates.
The 2026 reforms provide for:
- mediation to finish within 90 days from the date fixed for first appearance;
- arbitration referral within 30 days after failed mediation; and
- the arbitral award within 90 days from completion of pleadings.
However, as of 26 September 2026, I did not identify an Official Gazette commencement notification bringing those new Section 18 timelines into force.
Therefore, the safer current legal position remains the existing Section 18 framework, including the present 90-day statutory target.
Example Timeline
Suppose an MSME files its ODR complaint on 1 October.
Scenario A: Buyer settles quickly
1 October — complaint filed
Within days — buyer responds
By 16 October — settlement reached
Approximate duration: 15 days
Scenario B: Negotiations continue
1 October — complaint filed
15 October — no settlement
Both parties agree to continue
By 30 October — settlement or termination
Maximum contemplated pre-MSEFC period: 30 days
Scenario C: Buyer contests liability
1 October — complaint filed
Pre-MSEFC settlement fails
Matter proceeds under Section 18
Conciliation fails
Arbitration follows
The statute targets disposal of the Section 18 reference within 90 days, but the actual case may extend beyond that period.
How Can an MSME Avoid Delays?
Before filing, prepare:
- purchase orders;
- agreements;
- invoices;
- delivery challans;
- e-way bills;
- GRNs;
- acceptance emails;
- ledger;
- bank statements;
- part-payment details;
- credit notes;
- invoice-wise principal calculation;
- Section 16 interest calculation; and
- correspondence acknowledging the debt.
Also verify:
- correct buyer legal name;
- correct buyer contact information;
- eligibility as a qualifying micro/small supplier;
- limitation;
- all payments already received; and
- whether another proceeding involving the same debt already exists.
A clean claim can prevent weeks or months being spent resolving basic factual discrepancies.
Frequently Asked Questions
Can an MSME ODR complaint finish in 15 days?
Yes, if the parties settle during the voluntary pre-MSEFC stage. The Guidelines aim to complete that stage within 15 days.
Can the 15-day ODR period be extended?
Yes. With both parties’ consent, it may continue for up to another 15 days, making the maximum contemplated pre-MSEFC period 30 days.
How long does the buyer have to reply?
The buyer is given three days at the pre-MSEFC stage to file a brief reply and relevant documents.
Does an MSEFC have to decide the case within 90 days?
Section 18(5) states that a reference should be decided within 90 days. However, courts have held that this period is directory and that proceedings do not automatically terminate after day 90.
What happens if the buyer ignores the ODR case?
The supplier does not automatically win. The matter may proceed through the statutory process, and the supplier must still prove its claim.
Can an MSME case take more than 90 days?
Yes. The Delhi High Court has confirmed that expiry of the 90-day period does not automatically terminate the MSEFC’s mandate.
Is there an official average duration for MSME ODR cases?
No reliable official average per completed case was identified in the current Government materials reviewed. Published Government data reports case disposals but does not provide a representative average completion time.
Has the 2026 MSMED amendment shortened the process?
The amendment introduces more detailed mediation and arbitration timelines, but its relevant provisions require separate commencement notification. Those commencement dates should be checked before applying the new timetable.
