Section 11(6) is not maintainable absent a written agreement while MSMED statutory conciliation remains pending.

The petitioner, a registered small enterprise under the MSMED Act, supplied conveyor structures to the respondent

Alleging non-payment of dues amounting to Rs. 77,04,901, the petitioner approached the Micro and Small Enterprise Facilitation Council (MSEF Council) under Section 18(1) of the MSMED Act

On April 22, 2025, the Council recorded that the respondent sought time to reply and ordered that if the respondent failed to file submissions, the case would be forwarded for arbitration

However, the Council did not formally terminate conciliation or appoint an arbitrator

The petitioner then filed the present petition under Section 11(6)(c) of the Arbitration and Conciliation Act, 1996, seeking the appointment of a sole arbitrator, despite the absence of an independent written arbitration agreement between the parties

The court primarily applied Section 18 of the MSMED Act, which provides a three-tier statutory mechanism: reference, conciliation, and arbitration

Under Section 18(3), the provisions of the Arbitration Act apply only "then"—specifically after conciliation fails and stands terminated, and the Council either takes up the dispute or refers it to an institution

The court relied on Gujarat State Civil Supplies Corporation Ltd. v. Mahakali Foods Pvt. Ltd., which established that the MSMED Act, being a special statute, overrides the Arbitration Act once its mechanism is triggered

It further cited Jagdish Chander v. Ramesh Chander, holding that the existence of a written arbitration agreement under Section 7 of the Arbitration Act is a sine qua non for exercising jurisdiction under Section 11

Shobhana Gupta v. Atlas Cycles Haryana Ltd., which clarified that the deeming fiction of an arbitration agreement under MSMED Section 18(3) does not arise until the arbitration stage is formally reached

The Court observed that the petitioner voluntarily invoked the statutory jurisdiction of the MSEF Council under Section 18

Under the scheme of Section 18(3), the Arbitration Act is only applicable at the post-referral stage, marked by the formal termination of conciliation

In this case, the MSEF Council was still seized of the matter as a conciliator, and no order of termination or referral had been passed; the Council's observation regarding "forwarding for arbitration" was merely conditional

Consequently, the "statutory arbitration agreement" contemplated by the MSMED Act had not yet come into existence

Furthermore, because there was no independent written arbitration agreement between the parties as required by Section 7 of the Arbitration Act, the court held that the prerequisite for invoking Section 11(6) was absent

The Court distinguished previous precedents by noting that in those cases, either a separate arbitration agreement existed or the Council had failed to initiate the statutory process entirely

The petition was dismissed; however, the Court directed the MSEF Council to finalize the pending conciliation proceedings and take further recourse within two months