The Supreme Court has upheld that MSME Act is a special law and the Arbitration and Conciliation Act, 1996(“ACA”) is a general law[1]. On those basis, in case of a conflict between provisions of the two Act, clauses of MSME Act will prevail. 

This judgement comes as a relief as to ealier unclarity created in circumstances of disputes and misunderstandings with MSMEs. This judgement makes provisions clearer for MSMEs and organisations and businesses transacting with them.

Before Sonali Power[2], other cases provided precedence to the issue, namely Shilpi Industries[3] which provided registration of the entity as an MSME Act at the time of supply of goods and services to invoke the provisions of MSME Act.

Also in the case of Gujarat State Civil Supplies Corp.[4], two judge bench of Supreme Court also held that Chapter V of MSME Act holds powers over the provisions and terms of ACA. Court held that reference to Micro and Small Enterprises Facilitation Council(“MSEFC”) for dispute resolution section 17, MSME Act is even though parties entered into an arbitration agreement that envisages that things proceed differently. In this judgement, the court held that arbitration cannot be pursued by the MSEFC, but if it did, they would have competence to rule on its own jurisdiction under kompetanz-kompetanz doctrine. The court held that a agreement cannot go against the statutory provisions of section 18(1) and 18(4) of the MSME Act. Section 17 provides parties right to approach for a dispute resolution even if there is an arbitration agreement. MSMED Act can prevail against the provisions of Arbitration Act which provides that a conciliator cannot act as an arbitrator.

In the recent case of Harcharan Dass Gupta[5], the Supreme Court held that ‘seat of arbitration’ should be proceeded with the view pronounced in Mahakali, and as per section 18(4), where supplier is located. Supreme court held that arbitrator could have assumed jurisdiction on terms other than the arbitration agreement. This decision can impact duties, liabilities, responsibilities and obligations as assumed from the decision on the lines of Indian Oil Corporation[6] that provide that arbitrator would not be competent to pass award.

Important Takeaways: (1) MSME Arbitration would be subject to limitation and would have to check their compliances with the same. (2) MSME Conciliation can be proceeded outside its limitation period without any hurdle. (3) MSME Act provisions will prevail over the terms of ACA and arbitration agreement. (4) Even if arbitration is proceeded outside limitation, the tribunal can rule on its jurisdiction.

• PMKSY has sanctioned 6520 Crores for 2021-26 period under the 15^th Finance Commission with an aim to modernize food processing and boost farmers’ income. Under PMKSY, 1,601 projects have been approved; 1,133 are already operational.
• PMKSY supports agro-marine processing, cold chains and agro-processing units by supporting infrastructure and supply chains from farm to consumer. The scheme aims to reduce waste, and increase agricultural and marine output, increase exports and create rural employment opportunities. It envisages to build Food Parks, Integrated Cold Chains and Value Addition Infrastructure and Agro Processing and preservation Clusters for newer and existing food processing and preservation units.
• Under the Mega Food Parks Scheme(“MFPS”), 50% of eligible project cost for general areas and 75% for North East, Hill and difficult areas are granted a maximum of 50 crores if such project is implemented through a special purpose vehicle with a combined net worth of promoters and shareholders should not be less than Rs 50 Crore, along with net worth of each promoter or shareholder not being less than 1.5 times of his or her proposed equity contribution. SPV will have to provide 20% of the project cost as equity in general areas and 10% in hill and difficult areas. Minimum land required for such a scheme is 50 Acres for at least 75 years and presence of a  Rs 10 Crore anchor investor is required to set up a food processing unit with an investment of at least Rs 10 Crore. When 25-30 food processing units are set up, the SPC can avail grant under this Unit Scheme. Certain limitation are provided for this scheme that are cost of land, pre-operatives, margin money for working capital to be excluded, and that only one mega food park project will be sanctioned in a district. Second proposal from the same promoter will not be accepted before two years of completion.
• Under the Cold Chain Scheme(“CCS”), with respect to storage infrastructure, 35% of the project cost is granted in general areas and 50% in North East, Hill and Difficult areas. With Respect to Food Processing Infrastructure, CCs provides 50% of the project cost in general areas and 75%in North East, Hill and difficult areas. Organisations eligible for CCS would be Central and State PSUs, Joint Ventures, FPOs, NGOs, Cooperatives, SHGs, Corporate entities, Proprietorship firms with a combined net worth of promoters, proposed shareholder not being less than 1.5 times of the grant sought. Term loan over such organisations should be at least 20% of the total project cost. Date of Commercial operation should not be prior to the date of such application. Similar to MFPS, cost of land, pre-operatives, margin money for working capital are to be excluded for all purposes. Minimal Processing Centre or Farm Level Infrastructure is mandatory, however, firms are empowered to choose whether to go ahead with either or both from Distribution Hub and Reefer Transport.
• Under the scheme for creation and expansion of Food Processing and Preservation Capacities(Unit Scheme) 35% of the eligible project cost for General Area & 50% for North East, Hill & Difficult areas subject to maximum of 5.00 Crore is granted. Eligible Organizations are Central & state PSUs, Joint Ventures, FPOs, NGOs, Cooperative, SHG’s, Corporate entity, and, Proprietorship firms. Promoter’s equity should not be less than 20 % of Project Cost in General Areas and 10% in NER & Difficult Areas (not applicable for Govt. proposals). Minimum eligible project cost should be more than (i) 3 Cr. (for general area) & (ii) 1 Cr. (for North East states). Date of commercial production should not be prior to the date of submission of application. The term loan should be at least 20% of the total project cost. Sanction of term loan should not be prior to date of advertisement of EoI. Preference to the proposals should be as follow, firstly,  Mega Food Parks, secondly, Agro Clusters & thirdly, Designated Food Parks. Unit Scheme can be availed by the following sectors: (1) Fruit & vegetables Processing, (2) Milk Processing, (3) Meat/poultry/Fish Processing, (4) Ready to Eat/Ready to Cook Food Products/Breakfast cereals /Snacks/other food products, (5) Flour /Pulse /Oilseeds milling, (6) Rice Milling- preference to Eastern & North Eastern State, (7) Other agri-horti sectors including spices, coconut , mushrooms, Soybean, Honey, (8) Fruit / Honey based Wines, (9) Natural Food Flavors / extracts, Food additives & Colours, oleoresins (not artificial), (10) Animal Feed -to plants to be set up in Mega Food Parks
• Under the Agro Processing Clusters Scheme, 35% of the eligible project cost for General Area & 50% for North East, Hill & Difficult areas subject to maximum of `10.00 Crore will be granted. Eligible Organisations that can avail the scheme are Central & state PSUs, Joint Ventures, FPOs, FPCs, NGOs, Cooperatives, SHG’s, Corporate entity, Partnership firms and Proprietorship firms etc. Limitations to the scheme are that no Agro Processing Cluster would be developed in the same District where CPC of Mega Food Park is located, and only one agro processing cluster will be sanctioned in a district. Conditions for availing such scheme are that Combined Net Worth of promoters/ proposed shareholders should not be less than 1.5 times of the grant sought and that Promoter’s equity or contribution should not be less than 20 % of Project Cost in General Areas and 10% in Hill & Difficult and Island areas. Term loan should be at least 20% of the total project cost and Minimum Land Area- 10 Acres. Minimum no. of Food Processing Units to be set up are 5 [can avail grant under Unit Scheme]. Minimum Investment has to be Rs. 25 Crore and there would be State wise allocation of clusters. Exceptions to the scheme are that Cost of Land, Pre-operatives, Margin Money for Working Capital to be excluded, Promoters of Mega Food Parks are not eligible and that Cluster should not be in the district of Mega Food Parks.
• Under the Backward and Forward Linkage Scheme, 35% of the eligible project cost for General Area & 50% for North East, Hill & Difficult areas subject to maximum of 5.00 Crore would be granted. Organisations that eligible for this scheme are Central and State PSUs, Joint Ventures, Farmer Producers Organization (FPOs), NGOs, Cooperatives, SHGs, Public &Private Companies, Limited Liability Partnerships, Corporate Entity, Proprietorship Firms, Partnership Firms etc. This scheme can be applied by: (1) Promoters of existing food processing units (except those who have availed MoFPI grant earlier), (2) Groups of producers such as Co-operatives, Farmer Producer Organizations (FPOs), Farmer Producer Companies (FPCs), Self Help Groups (SHGs) etc. linked to food processing units, (3) Retailers of processed food having linkage at Farm Level or with food processors, and, (4) Entrepreneurs desirous of entering into food processing/food retail value chain( An entrepreneur can set up any one or more of the above mentioned facilities under the scheme. Standalone activities like Reefer transport or cold storage not permitted).
• Eligible Components of the Scheme are as follows-
• For Backward Linkage: (1) Integrated Pack-house(s) (with mechanized sorting & grading line/ packing line/ waxing line/ staging cold rooms/ cold storage, etc.), (2) Milk Chilling Centers/ Bulk Milk Coolers, (3) Pre Cooling Unit(s)/ Chillers, (4) Mobile pre-cooling Vans, (5) Reefer boats, and, (6) Machinery & Equipment for packing/packaging.
• For Forward Linkage: (1) Ripening Chamber(s), Cold Room/Cold Storage, (2) Retail chain of outlets for perishables including Meat Shops with facilities such as frozen storage/deep freezers/Refrigerated display cabinets/cold room/ Chillers/ Packaging etc., (3) Retail refrigerated carts, temperature controlled solar powered retail carts.
• For Transport: Refrigerated/ Insulated transport / Reefer Vans- as per requirement of backward and/or forward linkage components.
• Under the Food Testing and Laboratory Scheme, 50% of the cost of laboratory equipment for General Area & 70% for North East, Hill & Difficult areas, and 100% for Govt. / Public Sector entities would be granted. Along with that 25% of the cost of technical civil works for General Area & 33% for North East, Hill & Difficult areas would be granted. Eligible Organisation would be Central/State Government and its organizations, universities, deemed universities, and, private sector organizations.
• Under the Scheme related to HACCP/ ISO Standards/Food Safety/ Quality Management Systems, Re-imbursement of expenditure @50% in general area and @ 75% in NE Region and difficult areas of eligible project cost subject to maximum of ` 17 lakh and ` 22 lakh respectively would be granted. Eligible organisations would be Central and State Government Organization, IITs, Universities and private sector in the field of food processing sector.
• 
  With respect to Human Resources and Institutions, Government organizations, universities, and, institutions would be granted Grant-in-aid @100% of cost of equipment, consumables and expenditure related to salaries for project staff specific to the project for maximum period of three years. Whereas, Private organizations, universities, and, institutions would be granted Grant-in-aid is given @50% of equipment cost only in general areas and 70% in North East States and difficult areas. Organisations eligible for this benefit are All Universities, IITs, Central and State Government Institutions, Government funded Organizations, R&D laboratories and CSIR recognized R&D units in private sector.
• 
  
• Under the Skill Development Scheme, Grant @50% of the cost of plant & machinery for approved training module  would be provided with the condition that maximum grant 15 lakh per training module & two training module per training center for eligible institutions. Organisations eligible for such benefit would be Food technology institutions under the UGC approved universities and State universities and also NSDC recognized State owned skill training centers, NIFTEM, and, IIFPT.
• 
  

Prepared by – Axiom Forte, Adv.(Dr.) Saugath Roy, Mayank Kulshrestha

Sources: Baker Mckenzie, Global Disputes Forecast 2025, https://www.bakermckenzie.com/-/media/files/insight/publications/2025/01/global-disputes-forecast-2025.pdf , All trademarks and publications remain the property of their respective owners. References are used for informational and comparative discussion only, without affiliation or endorsement.

Baker Mckenzie Disputes Forecasts 2025(“BMDF”) is an important study and report as it assesses various sectors and is curated through the inputs of various legal practitioners. The study’s analytics and results can be imperative for any organisation in streamlining their overlooked actions and retrace the path to growth and success.

BMDF provides that the for the Technology sector, disputes that present the greatest risk to your organisation, in the descending manner(from highest to lowest) are Cybersecurity/Data Privacy, Artificial Intelligence, IP/Brand/Patent, Employment and Labour, Commercial/Contract, Tax, Consumer/Product Quality, Trade, Restructuring & Insolvency, Environmental, Social & Governance, Antitrust, Corporate/Securities/Post-M&A, and, Public Law.

BMDF provides that for the Industrial Manufacturing and Transportation sector, the disputes that present greatest risk to your organisation in the descending manner(from highest to lowest) are Cybersecurity/Data Privacy, Trade, Artificial Intelligence, Tax, Environmental, Social & Governance, Employment and Labour, Commercial/Contract, Restructuring & Insolvency, Consumer/Product Quality, Antitrust, Public Law, IP/Brand/Patent, and, Corporate/Securities/Post-M&A.

For the sector of Healthcare and Life Sciences the disputes that present the greatest risk to your organisation in the descending manner(from highest to lowest) are Cybersecurity/Data Privacy, Artificial Intelligence, Employment and Labour, Commercial/Contract, IP/Brand/Patent, Tax, Consumer/Product Quality, Trade, Environmental, Social & Governance, Corporate/Securities/Post-M&A, Antitrust, Restructuring & Insolvency, and, Public Law.

In the sector related to Financial Institutions, the disputes that present the greatest risk to your organisation in the descending manner(from highest to lowest) are Cybersecurity/Data Privacy, Artificial Intelligence, Employment and Labour, Commercial/Contract, IP/Brand/Patent, Tax, Environmental, Social & Governance, Consumer/Product Quality, Trade, Antitrust, Restructuring & Insolvency, Corporate/Securities/Post-M&A, and, Public Law.

For the Energy and Infrastructure sector, , the disputes that present the greatest risk to your organisation in the descending manner(from highest to lowest) are Environmental, Social & Governance, Employment and Labour, Artificial Intelligence, Cybersecurity/Data Privacy, Restructuring & Insolvency, Commercial/Contract, Tax, Trade, IP/Brand/Patent, Public Law, Corporate/Securities/Post-M&A, Consumer/Product Quality, and, Antitrust.

For the Consumer Goods and Retail sector, the disputes that present the greatest risk to your organisation in the descending manner(from highest to lowest) are Artificial Intelligence, IP/Brand/Patent, Consumer/Product Quality, Tax, Cybersecurity/Data Privacy, Employment and Labour, Trade, Commercial/Contract, Corporate/Securities/Post-M&A, Environmental, Social & Governance, Antitrust, Public Law, and Restructuring & Insolvency.

Employment and Labour disputes that can present greatest risk to your organisation form highest to lowest(in the descending order) are Competition scrutiny/restrictive covenants/non-competes, Equal pay/pay transparency/other pay disputes, Discrimination or harassment (sex, race, disability, belief, etc.), Use of AI/automated decision-making, Restructuring and reorganisation, Industrial action/union/labour relations, Investigations/whistleblowing in relation to misconduct, and, Misclassification of workers/gig economy.

Tax disputes that can present greatest risk to your organisation form highest to lowest(in the descending order) are Tax disputes related to the global mobility of employees, Indirect tax disputes, including industry specific taxes, Transfer pricing disputes, including global value chain issues, Disputes related to double taxation/arising from tax policy developments, Other international tax disputes related to group structure (permanent establishment, tax residency, beneficial ownership, General Anti-Abuse Rule), and, Tax disputes related to business restructurings including M&A.

Environmental and ESG disputes that can present greatest risk to your organisation form highest to lowest(in the descending order) are Waste management, Water stress, Regulation of emissions, Energy transition, Supply chain issues, Liability for misstatements e.g. greenwashing, Governance structures, Employment practices/discrimination, Carbon tax, and, Anti-ESG legislation. Steps that should be undertaken to prepare for ESG disputes are Increasing the size of our legal team and/or allocating additional funding, Making changes to our business model, Changing the locations in which we operate, Retaining external counsel, Preparing for or considering de-listing, Putting in place insurance, and, Changing the sectors in which we operate.

In a post-M&A disputes can present greatest risk to your organisation form highest to lowest(in the descending order) are Tax indemnities or other tax-related topics, General contract claims, Purchase price or other valuation questions, Breach of pre-contractual disclosure obligations or fraudulent misrepresentation, Representations and warranties, and, Disputes about a Material Adverse Change. Consideration of legal claims against other party in M&A should be reassessed due to Assertion of claims by third parties, Earnings problems and/or operative liquidity problems in the acquired company, Identification of problems in connection with the preparation and audit of the annual financial statements, Ad hoc review before the end of the warranty periods under the purchase agreement, and, Financing problems.

BMDF provides that barriers to find the right litigation or arbitration support are external teams lack understanding of my organisation, of my sector, lack of budget within my organisation, lack of buy-in within my organisation, and unsure which organisation to approach for support.

Barriers faced by organisation for litigation preparedness are inability to keep pace with regulatory development, difficulty finding the right external advisor, and, funding and resourcing challenges.

Investigations that present a risk to your organisation are Cybersecurity and data privacy, Sanctions, export controls, customs, Employment and Labour, Environmental, social and governance, Anti bribery and corruption, Tax, Antitrust/competition, Financial accounting and reporting, Fraud, embezzlement, insider trading, Product regulation and liability/Consumer, and Anti money laundering.

Baker Mckenzie Disputes Forecasts 2025 has developed a very insightful study and report which can be very useful for any organisation looking to expand their footprint and resources. The scope of disputes enumerated against highest to lowest possibility can be used to reassess liability(and scope of losses) against existing transactions, relationships and patterns.

Sources : Baker Mckenzie, Global Disputes Forecast 2025 https://www.bakermckenzie.com/-/media/files/insight/publications/2025/01/global-disputes-forecast-2025.pdf 

Axiom Forte acknowledges the research of leading global law firms as part of its academic and policy analysis. All trademarks and publications remain the property of their respective owners. References are used for informational and comparative discussion only, without affiliation or endorsement.

A contract or agreement is entered into by parties to get things on paper, and prevent any disputes in the later stages of a professional relationship or engagement. A well rounded contract and agreement can help parties in managing risk, ensuring clarity, explicitly mentioning rights and obligations and making sure that misunderstandings or difference in opinions do not become disputes.

Some Important Clauses to Include in a Contract Are -

• Definitions: Under the section of definitions, a term or clause can be provided a certain meaning that can flow and have the same weightage throughout the contract
• Scope and Obligations: This section can encompass and enumerate what rights and obligations of each parties will be.
• Payments, Considerations and Invoices: This section can encompass the types of payments required to paid, from which party to which party, type of payments required whether, one time, regular or custom on raising on invoices.
• Representation and Warranties: This section can ensure what is the other party promising to do. This can help in managing risks and obligations.
• Indemnity, Guarantee and Limitation of Liability: This section can help in providing risks associated to non-fulfilment of obligations of one party to another party who agrees to the same.
• Termination and Force Majeure: This section deals with when and how should a contract terminate and what impossibility can delay or even nullify the contract.
• Dispute Resolution and Governing Law: This section can help in allocating dispute to the courts of your selected jurisdictions or the choice of your dispute resolution.

Other important terms include severability, assignment, conditions precedent and subsequent, waiver and relationship created by the contract or agreement.

Prepared by – Axiom Forte, Adv.(Dr.) Saugath Roy, Mayank Kulshrestha

Intellectual Property(“IP”) cannot be used without the consent and licencing from its owner and its creator. India, upholds various intellectual property standards by being member of World Intellectual Property Organisation[1](“WIPO”) and a signatory to Paris[2] and Berne Conventions[3], TRIPS Agreement[4], Madrid Protocol[5] and Patent Cooperation Treaty[6].

Copyrights do not need to be registered and are protected from the time of creation and publication. Copyrights are protected by Berne Convention through automatic protection in member states without registration. Further, WIPO Copyrights Treaty[7] covers digital works and online transmissions. In addition to that, TRIPS agreement protects copyrights while providing for trade laws.

Trademarks are also properties of its owners. Prior use and market presence is analysed to determine ownership but registration can help in preventing disputes and wastage of time and resources. Madrid Protocol[8] provides for international registration through a single application, while Paris Convention provides for national treatment and prior usage rights. TRIPS agreement[9] protects and regulates enforcement of such rights.

Patents are not protected without registration. However, with registration, a patent holder is entitled to adequate compensation even through compulsory licensing. Under the scope of voluntary licensing, patent holder can charge any amount of compensation. TRIPS Agreement sets global standards for patents. Further, Patent cooperation treaty[10] can help in holders getting protection in multiple jurisdictions. World Trade Organisation related protections, terms and policies can also include the scope of patents, and related adequate compensation.

Trade secrets are also known as business secrets, which are protected through a certain amount of investment being made to keep certain information from being made public. It can include investment through security keeping like vaults, covering working mechanisms of custom machines, and, binding employees knowing information with a non-disclosure or confidentiality clause. TRIPS agreement provides its member states to protect undisclosed information under Article 39[11].

Industrial Designs are protected through registration, which protects designs from being used in an unconsented manner. Hague Agreement[12] regulates registration of international designs along with TRIPS, which mandates its protection.

Plant varieties that are artificially created through a non-natural process can be protected for a certain amount of time after registration. TRIPS agreement[13] provides for protections of plant varieties by patents or other modified systems.

Layout Designs of Integrated Circuits are protected for a limited period of ten years from registration. Washington Treaty on Intellectual Property[14] in Respect of Integrated Circuits protects circuit designs and obligates its member states to protect the same and ensure efficient mechanism for the same.

.

Introduction

Consent and autonomy are a fundamental pillars on which foundations of Arbitration are built and become the backbone of the whole process. The Latin maxim consensus ad aidem(meeting of minds) has been the foundational principle of contracts and arbitration, and provides that parties are bound by what they agreed upon. Similar principle can be found under the provisions of Indian Arbitration and Conciliation Act, 1996 (“Arbitration Act” or “Act”), which complies with the provisions of New York Convention[1] and other UNCITRAL Conventions.

We will analyse the scope of inclusion of non-signatories, third parties, or non-parties and the scope of continuation without such parties. We analyse whether and how the recent judgement of Kamal Gupta v. LR Builders[2] provides clarity, certainty and predictability of parties, if any.