Chhattisgarh High Court: MSME Council Award Void Without Termination of Conciliation and Proper Arbitral Procedure
Stories are grouped across languages, rewritten into a fixed editorial format, and linked to original sources.
TL;DR
- Chhattisgarh High Court ruled an MSME Council award a nullity for failing to terminate conciliation.
- Court specified the Council must follow arbitral procedures under the Arbitration and Conciliation Act, 1996.
- An award issued without these steps can be challenged even at the execution stage.
Overview
On June 29, 2026, the Chhattisgarh High Court ruled that an order by a Micro and Small Enterprises Facilitation Council (MSEFC) is void if it is passed without formally ending conciliation proceedings and without adhering to the arbitral procedures set by the Arbitration and Conciliation Act, 1996.
What Happened
A party challenged an award issued by a Micro and Small Enterprises Facilitation Council in Chhattisgarh.
The High Court observed that the Council had issued its order without officially terminating the conciliation phase.
The Court further noted that arbitral procedures as outlined in the Arbitration and Conciliation Act, 1996, had not been followed.
Justice Ravindra Kumar Agrawal held that such an award is a nullity in law and can be contested even during execution proceedings.
Context
The Micro, Small and Medium Enterprises Development Act, 2006, provides for mandatory conciliation before arbitration through MSEFCs in India.
Usually, if conciliation fails, the Council must then shift to arbitration procedures under the Arbitration and Conciliation Act, 1996.
The High Court's decision clarifies procedural requirements for Council-issued awards under Indian law.
Why It Matters
- This ruling reinforces the procedural safeguards required when issuing arbitral awards under Indian law.
- It highlights that bypassing termination of conciliation and formal arbitral procedures could render Council awards unenforceable.