{"id":191,"date":"2026-09-25T10:39:21","date_gmt":"2026-09-25T10:39:21","guid":{"rendered":"https:\/\/praveensiinghhal.com\/blog\/?p=191"},"modified":"2026-09-25T10:39:21","modified_gmt":"2026-09-25T10:39:21","slug":"what-happens-after-filing-an-msme-odr-complaint","status":"publish","type":"post","link":"https:\/\/praveensiinghhal.com\/blog\/what-happens-after-filing-an-msme-odr-complaint\/","title":{"rendered":"What Happens After Filing an MSME ODR Complaint?"},"content":{"rendered":"\n<figure class=\"wp-block-image size-large\"><img fetchpriority=\"high\" decoding=\"async\" width=\"1024\" height=\"768\" src=\"https:\/\/praveensiinghhal.com\/blog\/wp-content\/uploads\/2026\/07\/Praveen-Podcast-1-1024x768.png\" alt=\"\" class=\"wp-image-75\" srcset=\"https:\/\/praveensiinghhal.com\/blog\/wp-content\/uploads\/2026\/07\/Praveen-Podcast-1-1024x768.png 1024w, https:\/\/praveensiinghhal.com\/blog\/wp-content\/uploads\/2026\/07\/Praveen-Podcast-1-300x225.png 300w, https:\/\/praveensiinghhal.com\/blog\/wp-content\/uploads\/2026\/07\/Praveen-Podcast-1-768x576.png 768w, https:\/\/praveensiinghhal.com\/blog\/wp-content\/uploads\/2026\/07\/Praveen-Podcast-1.png 1448w\" sizes=\"(max-width: 1024px) 100vw, 1024px\" \/><\/figure>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>After an MSME files a delayed-payment complaint on the<\/strong> <a href=\"https:\/\/praveensiinghhal.com\/blog\/how-do-i-file-a-complaint-on-the-new-msme-odr-portal\/\"><strong><\/strong><strong>MSME ODR Portal<\/strong><\/a><strong>, the buyer is electronically notified and gets an opportunity to respond. The case can then enter a short voluntary pre-MSEFC settlement process; if no settlement is reached or either party opts out, it moves into the formal<\/strong> <a href=\"https:\/\/praveensiinghhal.com\/blog\/what-is-the-msme-facilitation-council-and-how-can-it-help-me-get-paid\/\"><strong><\/strong><strong>Micro and Small Enterprises Facilitation Council (MSEFC)<\/strong><\/a> <strong>process\u2014conciliation first and arbitration if conciliation fails.<\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Filing the complaint does <strong>not automatically create an order for payment<\/strong>. The supplier should continue monitoring the portal, <a href=\"https:\/\/praveensiinghhal.com\/blog\/what-documents-do-i-need-to-prove-that-a-buyer-delayed-my-payment\/\">preserve evidence<\/a>, respond to buyer objections, reconcile any part-payments and prepare for the formal MSEFC stage if settlement does not occur.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Since <strong>15 October 2025, all new delayed-payment cases are being filed through the MSME ODR Portal<\/strong>, according to the Ministry of MSME&#8217;s 2025\u201326 Annual Report.<\/p>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>MSME ODR Process After Filing: Quick Overview<\/strong><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\"><\/p>\n\n\n\n<figure class=\"wp-block-table\"><table class=\"has-fixed-layout\"><tbody><tr><td><strong>Stage<\/strong><\/td><td><strong>What happens<\/strong><\/td><\/tr><tr><td>1. Complaint filed<\/td><td>Portal creates the delayed-payment case<\/td><\/tr><tr><td>2. Buyer notified<\/td><td>Claim and supporting documents are electronically communicated<\/td><\/tr><tr><td>3. Buyer response<\/td><td>Buyer may file a brief reply and documents<\/td><\/tr><tr><td>4.Digital Guided Pathway<\/td><td>Voluntary system-generated assessment may assist settlement<\/td><\/tr><tr><td>5.Unmanned Negotiation<\/td><td>Buyer and supplier can negotiate directly online<\/td><\/tr><tr><td>6. Settlement<\/td><td>Case closes if agreed terms resolve the dispute<\/td><\/tr><tr><td>7. MSEFC stage<\/td><td>Formal statutory proceedings begin if settlement fails<\/td><\/tr><tr><td>8. Conciliation<\/td><td>Council or ADR institution attempts settlement<\/td><\/tr><tr><td>9. Arbitration<\/td><td>If conciliation fails, a binding adjudication follows<\/td><\/tr><tr><td>10. Award \/ enforcement<\/td><td>Award is issued and can be enforced if unpaid<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<p class=\"wp-block-paragraph\">The <a href=\"https:\/\/odr.msme.gov.in\/\">ODR Portal<\/a> is designed as an <strong>end-to-end digital system<\/strong>, covering filing through final dispute resolution and tracking.<\/p>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>Step 1: What Happens Immediately After You Submit the Complaint?<\/strong><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>The portal sends an automated communication to both the MSE seller and the buyer.<\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Under the <a href=\"https:\/\/ramp.msme.gov.in\/ramp\/sites\/default\/files\/2026-05\/odr-guidelines.pdf\">official ODR Guidelines<\/a>, proceedings at the pre-MSEFC stage begin when an automated communication is sent through:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>SMS\/text message; and<\/li>\n\n\n\n<li>email, where provided.<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\">The buyer is also sent the supplier&#8217;s delayed-payment application and supporting documents.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">This makes the accuracy of the buyer&#8217;s:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>legal name;<\/li>\n\n\n\n<li>email address;<\/li>\n\n\n\n<li>mobile number; and<\/li>\n\n\n\n<li>supporting transaction details<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\">particularly important.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">A wrong buyer email or incorrect legal entity can cause avoidable delay.<\/p>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>Step 2: How Long Does the Buyer Have to Reply?<\/strong><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>The ODR Guidelines give the buyer three days from receipt of the automated communication to file a brief reply and supporting documents at the voluntary pre-MSEFC stage.<\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The buyer can respond to matters such as:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>whether the goods or services were supplied;<\/li>\n\n\n\n<li>whether invoices were accepted;<\/li>\n\n\n\n<li>amounts already paid;<\/li>\n\n\n\n<li>quality disputes;<\/li>\n\n\n\n<li>credit notes;<\/li>\n\n\n\n<li>contractual payment terms; and<\/li>\n\n\n\n<li>the amount allegedly remaining due.<\/li>\n<\/ul>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>Does no reply mean the MSME automatically wins?<\/strong><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">No.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">A failure to respond within this short pre-MSEFC window does not automatically convert the claim into an award.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">If the dispute ultimately reaches arbitration, the supplier still needs to establish its claim through documents and evidence. The ODR Guidelines do, however, permit arbitration to proceed in the buyer&#8217;s absence after the tribunal is satisfied that notice has been effectively served and due process has been followed.<\/p>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>Step 3: What Is the Digital Guided Pathway?<\/strong><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>The Digital Guided Pathway (DGP) is a voluntary pre-MSEFC process intended to help the parties understand the dispute and explore settlement before formal proceedings.<\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Unless the parties opt out within the prescribed three-day period, the ODR Guidelines contemplate an AI-enabled pathway analysing the facts entered by the parties and generating a <strong>probable outcome<\/strong> based on the dispute information and legal precedents.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">This probable outcome is <strong>not an arbitral award<\/strong>.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Its practical purpose is to help both sides assess questions such as:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Is the principal amount really disputed?<\/li>\n\n\n\n<li>Is the buyer merely seeking more time?<\/li>\n\n\n\n<li>Are only some invoices disputed?<\/li>\n\n\n\n<li>Is the <a href=\"https:\/\/praveensiinghhal.com\/blog\/can-a-buyer-legally-delay-paying-an-msme-beyond-45-days\/\">statutory-interest exposure becoming significant?<\/a><\/li>\n\n\n\n<li>Is settlement commercially sensible?<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\">The pre-MSEFC process remains voluntary and confidential.<\/p>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>Step 4: What If the Digital Guided Pathway Does Not Settle the Case?<\/strong><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>The parties may move into Unmanned Negotiation, another voluntary online settlement process.<\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The ODR Portal facilitates direct negotiations between the supplier and buyer without a negotiator or mediator running the discussions.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The parties may exchange:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>documents;<\/li>\n\n\n\n<li>settlement proposals;<\/li>\n\n\n\n<li>payment schedules; and<\/li>\n\n\n\n<li>revised settlement terms.<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\">The proceedings are intended to remain confidential.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>Example<\/strong><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">The MSME claims:<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Principal:<\/strong> \u20b920 lakh<br><strong>Statutory interest:<\/strong> \u20b94 lakh<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The buyer admits the \u20b920 lakh principal but cannot pay immediately.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The parties might settle on:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>\u20b910 lakh immediately;<\/li>\n\n\n\n<li>\u20b95 lakh after 30 days;<\/li>\n\n\n\n<li>\u20b95 lakh after 60 days; and<\/li>\n\n\n\n<li>an agreed treatment of interest.<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\">If agreement is reached, the portal can generate a settlement agreement for execution.<\/p>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>How Long Does the Pre-MSEFC Stage Last?<\/strong><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>The normal pre-MSEFC stage is designed to finish within 15 days from filing.<\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">If it has not concluded by the 15th day, it terminates unless <strong>both parties consent to continue<\/strong>.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">With mutual consent, it may continue for up to another 15 days.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Therefore, the maximum contemplated pre-MSEFC period is:<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>15 days + maximum 15-day extension = 30 days.<\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">This short timetable is intended to prevent informal negotiations from delaying formal recovery indefinitely.<\/p>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>What Happens If the Parties Reach a Settlement?<\/strong><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>If a settlement is executed, the delayed-payment application can be closed to the extent of the parties covered by the settlement.<\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The ODR Guidelines provide for the settlement record to be maintained on the Portal.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Where payment is to be made over time, the system can send compliance reminders.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">For settlements reached during Unmanned Negotiation, if the agreed terms are not complied with, the Guidelines contemplate the case record being forwarded to the concerned MSEFC for formal dispute-resolution proceedings.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>Practical advice<\/strong><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">Do not withdraw simply because the buyer says:<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">\u201cWe will pay next month.\u201d<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Record the settlement properly.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">A payment plan should identify:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>admitted principal;<\/li>\n\n\n\n<li>interest treatment;<\/li>\n\n\n\n<li>payment dates;<\/li>\n\n\n\n<li>instalment amounts;<\/li>\n\n\n\n<li>bank details;<\/li>\n\n\n\n<li>consequences of default; and<\/li>\n\n\n\n<li>whether the claim closes only after full payment.<\/li>\n<\/ul>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>Step 5: What Happens If Settlement Fails?<\/strong><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>The complaint moves into the formal MSEFC stage if the parties fail to settle or opt out of the pre-MSEFC process.<\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The <a href=\"https:\/\/ramp.msme.gov.in\/ramp\/sites\/default\/files\/2026-05\/odr-guidelines.pdf\">official Guidelines<\/a> expressly state that failure or opt-out leads to the <strong>formal statutory dispute-resolution process<\/strong>.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">At this stage, the parties may also have to disclose whether another court or tribunal proceeding involving the same subject matter is:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>pending;<\/li>\n\n\n\n<li>already decided; or<\/li>\n\n\n\n<li>previously initiated.<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\">That is why the MSME should disclose related:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>arbitration;<\/li>\n\n\n\n<li>civil recovery proceedings;<\/li>\n\n\n\n<li>insolvency proceedings; or<\/li>\n\n\n\n<li>other litigation<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\">rather than assuming the ODR case exists in isolation.<\/p>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>Step 6: What Does the MSEFC Do First?<\/strong><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Under the currently operative Section 18 of the MSMED Act, the MSEFC first conducts conciliation itself or refers the matter to an ADR institution for conciliation.<\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">If conciliation succeeds, the dispute ends in settlement.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">If conciliation fails, the Council:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>takes up the dispute for arbitration itself; or<\/li>\n\n\n\n<li>refers it to an institution or centre providing ADR services.<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\">Section 18 specifically applies the Arbitration and Conciliation Act, 1996 to these stages.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>Why do some ODR materials say \u201cconciliation\/mediation\u201d?<\/strong><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">The ODR Guidelines use both terms.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">However, the <a href=\"https:\/\/www.indiacode.nic.in\/indiacode\/handle\/123456789\/19637?col=123456789%2F1362&amp;view_type=search\"><strong>Mediation Act, 2023<\/strong><\/a> <strong>was only partly brought into force<\/strong>. The <a href=\"https:\/\/egazette.gov.in\/WriteReadData\/2023\/249277.pdf\">9 October 2023 notification<\/a> brought specified sections into force but did not activate Section 62 and the Seventh Schedule that would substitute the MSMED Act&#8217;s Section 18 conciliation framework.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Accordingly, for the current operative statutory framework checked for this article, <strong>conciliation under the Arbitration and Conciliation Act remains the safer legal description<\/strong>.<\/p>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>What Happens If Conciliation Succeeds?<\/strong><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">A properly executed conciliation settlement is powerful.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Sections 73 and 74 of the Arbitration and Conciliation Act provide that a signed conciliation settlement is:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>final and binding on the parties; and<\/li>\n\n\n\n<li>given the same status and effect as an arbitral award on agreed terms.<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\">For the MSME, this means the objective should not simply be obtaining a verbal promise.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The settlement should clearly record what must actually be paid.<\/p>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>Step 7: What Happens If Conciliation Fails?<\/strong><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>The dispute proceeds to statutory arbitration.<\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">At the first arbitration stage, the supplier may be permitted to:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>adopt the claim\/application already filed; or<\/li>\n\n\n\n<li>file a fresh formal claim with supporting documents.<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\">The buyer is also given an opportunity to present its defence.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The dispute then typically moves through:<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>claim \u2192 defence \u2192 evidence \u2192 hearings \u2192 final submissions \u2192 award.<\/strong><\/p>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>What Documents Become Important During Arbitration?<\/strong><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">By this stage, the MSME should have a <a href=\"https:\/\/praveensiinghhal.com\/blog\/what-documents-do-i-need-before-filing-an-msme-payment-complaint-online\/\">clean evidence bundle<\/a> containing:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Udyam registration;<\/li>\n\n\n\n<li>agreement\/purchase order;<\/li>\n\n\n\n<li>invoices;<\/li>\n\n\n\n<li>delivery challans;<\/li>\n\n\n\n<li>GRNs;<\/li>\n\n\n\n<li>e-way bills;<\/li>\n\n\n\n<li>service completion records;<\/li>\n\n\n\n<li>acceptance emails;<\/li>\n\n\n\n<li>ledger;<\/li>\n\n\n\n<li>bank statement;<\/li>\n\n\n\n<li>part-payment details;<\/li>\n\n\n\n<li>credit notes;<\/li>\n\n\n\n<li>payment reminders;<\/li>\n\n\n\n<li>balance confirmations;<\/li>\n\n\n\n<li>email acknowledgments;<\/li>\n\n\n\n<li>interest calculation; and<\/li>\n\n\n\n<li>relevant correspondence.<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\">Do not assume that merely uploading an invoice at the initial ODR stage proves every element of the claim.<\/p>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>Can the Buyer Ignore the Arbitration?<\/strong><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Ignoring notices does not necessarily stop the proceedings.<\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The ODR Guidelines provide that if the buyer fails to appear, the arbitral tribunal may proceed in the buyer&#8217;s absence after satisfying itself that the online notice\/summons was effectively served and applicable due process was followed.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The supplier must still prove:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>the transaction;<\/li>\n\n\n\n<li>supply\/performance;<\/li>\n\n\n\n<li>liability;<\/li>\n\n\n\n<li>outstanding principal; and<\/li>\n\n\n\n<li>interest claimed.<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\">Non-participation is not a substitute for evidence.<\/p>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>Step 8: What Happens When the Arbitration Ends?<\/strong><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>The tribunal may issue a reasoned arbitral award.<\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The ODR Guidelines contemplate:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>online final arguments\/submissions;<\/li>\n\n\n\n<li>a reasoned award;<\/li>\n\n\n\n<li>electronic signing\/stamping as permissible;<\/li>\n\n\n\n<li>communication of the award to the parties; and<\/li>\n\n\n\n<li>portal tracking of compliance.<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\">Parties may also settle during arbitration itself. In that event, the tribunal may pass a consent award based on the settlement.<\/p>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>How Long Should the MSEFC Process Take?<\/strong><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">Section 18(5) of the presently operative MSMED Act says:<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>every reference should be decided within 90 days from the date of making the reference.<\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">However, courts have held that expiry of the 90-day period does <strong>not automatically terminate the MSEFC&#8217;s jurisdiction<\/strong>. The Delhi High Court has treated this timeline as directory rather than a rule that automatically kills the proceedings after day 90.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">So do not assume:<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">\u201cIf 90 days pass, my case automatically ends.\u201d<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">It does not.<\/p>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>What Happens If the Buyer Challenges the Award?<\/strong><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>A buyer seeking to set aside an MSMED award faces the special Section 19 pre-deposit requirement.<\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Under the currently operative <a href=\"https:\/\/www.indiacode.nic.in\/indiacode\/handle\/123456789\/18632?view_type=browse\">Section 19<\/a>, a court cannot entertain the buyer&#8217;s challenge unless the buyer deposits <strong>75% of the amount awarded<\/strong>, subject to the statutory framework.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The Supreme Court in <a href=\"https:\/\/api.sci.gov.in\/supremecourt\/2019\/37891\/37891_2019_43_39_30702_Judgement_08-Oct-2021.pdf\"><strong>Gujarat State Disaster Management Authority v. Aska Equipments Ltd.<\/strong><\/a>, decided 8 October 2021, held that this <a href=\"https:\/\/praveensiinghhal.com\/blog\/can-a-buyer-appeal-an-msme-facilitation-council-order-and-delay-payment-further\/\"><strong>75% pre-deposit requirement<\/strong><\/a> <strong>is mandatory<\/strong>, although the court can in appropriate circumstances permit the amount to be deposited in instalments.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">This is one of the strongest procedural protections available to a successful MSE supplier.<\/p>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>What If the Buyer Simply Does Not Pay the Award?<\/strong><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">An arbitral award can be enforced under the <strong>Arbitration and Conciliation Act, 1996<\/strong> in the same manner as a court decree once the applicable enforcement conditions are met.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Importantly, merely filing a Section 34 challenge does not by itself make an arbitral award unenforceable; a separate stay order is required under Section 36.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The supplier should therefore distinguish between:<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><a href=\"https:\/\/praveensiinghhal.com\/blog\/can-a-buyer-appeal-an-msme-facilitation-council-order-and-delay-payment-further\/\"><strong>winning the award<\/strong><\/a> and <strong>actually recovering the money<\/strong>.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">If voluntary payment does not follow, enforcement may become necessary.<\/p>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>Has the MSMED Amendment Act, 2026 Changed This Process?<\/strong><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>A major amendment has been enacted, but its commencement must be checked before treating its new procedure as operative.<\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The <a href=\"https:\/\/egazette.gov.in\/WriteReadData\/2026\/275448.pdf\"><strong>Micro, Small and Medium Enterprises Development (Amendment) Act, 2026<\/strong><\/a>, Act No. 16 of 2026, received Presidential assent on <strong>13 August 2026<\/strong>.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">It proposes significant changes including:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>specific mediation timelines;<\/li>\n\n\n\n<li>a 30-day transition after failed mediation;<\/li>\n\n\n\n<li>a 90-day period for making an award after pleadings;<\/li>\n\n\n\n<li>online dispute-resolution provisions;<\/li>\n\n\n\n<li>stronger recovery mechanisms; and<\/li>\n\n\n\n<li>revised Section 19 protections.<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\">However, Section 1(2) expressly states that the Amendment Act comes into force only on a date or dates separately notified by the Central Government.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>As of 25 September 2026, I did not identify an official commencement notification bringing those amended Sections 18\u201319 into force in the Gazette materials reviewed for this article.<\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Accordingly, the process described above uses the <strong>currently operative Section 18 and Section 19 framework<\/strong>, while flagging the 2026 amendments as forthcoming law requiring a fresh commencement check.<\/p>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>What Should an MSME Do Immediately After Filing?<\/strong><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">Use this checklist:<\/p>\n\n\n\n<ol class=\"wp-block-list\">\n<li>Save the ODR case\/reference number.<\/li>\n\n\n\n<li>Monitor the registered email and mobile number.<\/li>\n\n\n\n<li>Confirm that the buyer details are correct.<\/li>\n\n\n\n<li>Preserve the exact claim and attachments filed.<\/li>\n\n\n\n<li>Prepare an invoice-wise outstanding schedule.<\/li>\n\n\n\n<li>Update the claim if part-payment is received.<\/li>\n\n\n\n<li>Review any buyer reply immediately.<\/li>\n\n\n\n<li>Decide your minimum acceptable settlement terms.<\/li>\n\n\n\n<li>Keep original delivery and acceptance evidence ready.<\/li>\n\n\n\n<li>Track limitation independently.<\/li>\n\n\n\n<li>Disclose related legal proceedings when required.<\/li>\n\n\n\n<li>Do not treat a promise to pay as completed recovery.<\/li>\n<\/ol>\n\n\n\n<p class=\"wp-block-paragraph\">The supplier should keep one working file showing:<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Principal claimed + payments received + current principal + interest + next procedural date.<\/strong><\/p>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<h1 class=\"wp-block-heading\"><strong>Frequently Asked Questions<\/strong><\/h1>\n\n\n\n<p class=\"wp-block-paragraph\"><\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>How soon is the buyer notified after an MSME ODR complaint is filed?<\/strong><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">The Guidelines provide for automated electronic communication to the seller and buyer after filing, together with the application and supporting documents.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>How long does the buyer have to reply?<\/strong><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">At the pre-MSEFC stage, the Guidelines give the buyer <strong>three days from receipt of the automated communication<\/strong> to file a brief reply and supporting documents.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>Is pre-MSEFC ODR compulsory?<\/strong><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">No. The Digital Guided Pathway and Unmanned Negotiation processes are voluntary. Either party can opt out and proceed to the formal MSEFC stage.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>How long does pre-MSEFC settlement take?<\/strong><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">The normal period is 15 days from filing. With the consent of both parties, it may continue for up to another 15 days, making the maximum contemplated period 30 days.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>What if the buyer does not respond?<\/strong><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">The case does not automatically result in payment. If formal arbitration is reached and effective service has been established, the tribunal may proceed in the buyer&#8217;s absence after following due process.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>What happens if negotiation fails?<\/strong><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">The matter enters the formal MSEFC stage, which under the presently operative Section 18 involves conciliation followed by arbitration if conciliation fails.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>Does an MSEFC case have to finish within 90 days?<\/strong><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">Section 18(5) states that every reference should be decided within 90 days, but courts have held that missing this period does not automatically terminate the proceeding.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>What if the buyer challenges an MSEFC award?<\/strong><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">Under the current Section 19 framework, a buyer challenging the award must make the statutory <strong>75% pre-deposit<\/strong> before its setting-aside application can be entertained. The Supreme Court has held this requirement mandatory.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>After an MSME files a delayed-payment complaint on the MSME ODR Portal, the buyer is electronically notified and gets an opportunity to respond. The case can then enter a short voluntary pre-MSEFC settlement process; if no settlement is reached or either party opts out, it moves into the formal Micro and Small Enterprises Facilitation Council [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"class_list":["post-191","post","type-post","status-publish","format-standard","hentry","category-blog"],"_links":{"self":[{"href":"https:\/\/praveensiinghhal.com\/blog\/wp-json\/wp\/v2\/posts\/191","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/praveensiinghhal.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/praveensiinghhal.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/praveensiinghhal.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/praveensiinghhal.com\/blog\/wp-json\/wp\/v2\/comments?post=191"}],"version-history":[{"count":2,"href":"https:\/\/praveensiinghhal.com\/blog\/wp-json\/wp\/v2\/posts\/191\/revisions"}],"predecessor-version":[{"id":193,"href":"https:\/\/praveensiinghhal.com\/blog\/wp-json\/wp\/v2\/posts\/191\/revisions\/193"}],"wp:attachment":[{"href":"https:\/\/praveensiinghhal.com\/blog\/wp-json\/wp\/v2\/media?parent=191"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/praveensiinghhal.com\/blog\/wp-json\/wp\/v2\/categories?post=191"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/praveensiinghhal.com\/blog\/wp-json\/wp\/v2\/tags?post=191"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}