The MSME Act has substantial and significant provisions but the MSME Facilitation Councils (MSEFC) are not being well versed with the MSME Act due to which mediation has not been effectively utilized, said J P Sengh, Senior Advocate. He suggested that members of the MSME Facilitation Council need to be made aware about the MSME Act and Mediation.

Sharing his insights during a panel discussion ‘Reducing Cost of Litigation for MSMEs' organized by FISME recently in New Delhi, he firstly discussed the history of arbitration, mediation and conciliation. He pointed out that people are not aware about the concept of arbitration and mediation.

"Mediation took off at Delhi Apex Centre. Mediation offers an amicable means of resolving the matters. Mediation has worked and even the MSME Act entails the concept of mediation. But the question is whether they are ready to execute the mediation as a mechanism. The other concern is honour and execution of the award", he added.

The Senior Advocate said that despite MSME Act has substantial and significant provisions the Facilitation Councils are not well versed with the concept of mediation. MSME Act amended conciliation and brought mediation as a preliminary step before arbitration can be pursued before the MSME Facilitation Councils. Additionally, there is a need for a pool of trained mediators.

Accordingly, he suggested that we can change the perspective of MSME Facilitation Council by spreading awareness in the society, sensitization of the matter and settlement is time bound and it gets implemented.