Time Barred Conciliation versus Arbitration Under MSMED Act: Supreme Court Clarifies

Time Barred Conciliation versus Arbitration Under MSMED Act Supreme Court Clarifies

Time Barred Conciliation versus Arbitration Under MSMED Act: Supreme Court Clarifies

In a significant ruling in the case of M/s Sonali Power Equipements Pvt. Ltd. v. Chairman, Maharashtra State Electricity Board, Mumbai & Ors., Civil Appeal Numbers 9524-9532 of 2025 decided on 17.07.2025, interpreting the interplay between the Micro, Small and Medium Enterprises Development Act, 2006 (MSMED Act), the Arbitration and Conciliation Act, 1996 (A&C Act), and the Limitation Act, 1963, the Supreme Court has clarified that the Limitation Act does not apply to conciliation proceedings initiated under Section 18(2) of the MSMED Act. However, once the dispute progresses to arbitration under Section 18(3), the provisions of the Limitation Act do apply.

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