Supreme Court rules MSME Council lacks jurisdiction over suppliers registered after contract execution

For CAs

• Review pending arbitration proceedings before MSME Councils to filter out claims affected by delayed vendor registrations. Advise clients that statutory dispute resolution frameworks grant special recovery remedies exclusively to entities registered as micro or small enterprises at the time of entering into commercial agreements. Verify that vendor registrations are active prior to signing commercial contracts to ensure access to statutory forums.
• Businesses must ensure that valid statutory registration predates the contract as it is a mandatory prerequisite for invoking MSME Council jurisdiction.

For businesses

• Verify that vendor registrations are active prior to signing commercial contracts to ensure access to statutory forums. Note that retroactive registration does not confer jurisdiction for statutory arbitration under the act since the MSME Council lacks legal jurisdiction to adjudicate disputes when the supplier completed its official registration subsequent to the execution of the underlying contract. Ensure valid statutory registration predating the contract is in place to invoke MSME Council jurisdiction.
• Note that retroactive registration does not confer jurisdiction for statutory arbitration under the act since the MSME Council lacks legal jurisdiction to adjudicate disputes when the supplier completed its official registration subsequent to the execution of halal underlying contracts.