Statutory MSME arbitration prevails over a contractual clause when the special dispute-resolution scheme is invoked.

Section 18 of the Micro, Small and Medium Enterprises Development Act, 2006 creates a special statutory mechanism for conciliation and, if that fails, arbitration, and its non obstante clause gives that procedure priority over a contrary contractual arbitration clause. A contract clause providing another mode of appointing an arbitrator does not displace the statutory route or invalidate a reference made by the Facilitation Council. Where no prejudice is shown, the reference remains valid, and any complaint about the arbitrator may be pursued under the Arbitration and Conciliation Act, 1996 rather than by writ challenge.

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Issues: Whether a reference made by the Micro and Small Enterprises Facilitation Council to arbitration under Section 18 of the Micro, Small and Medium Enterprises Development Act, 2006 was invalid because the contract contained an independent arbitration clause.

Analysis: Section 18 of the Micro, Small and Medium Enterprises Development Act, 2006 contains a non obstante clause and creates a special statutory mechanism for conciliation and, on its failure, arbitration. The contractual arbitration clause could operate only as an additional mode of appointment and could not exclude the statutory procedure. No prejudice was shown from the Council's reference to an arbitrator, and any grievance regarding the arbitrator could be pursued under the Arbitration and Conciliation Act, 1996. The availability of a contractual mechanism did not curtail the statutory remedy or the Council's authority under the special enactment.

Conclusion: The reference to arbitration under the statutory scheme was valid notwithstanding the contractual arbitration clause, and the writ challenge was not sustainable.

Final Conclusion: The statutory dispute-resolution framework under the special enactment prevailed over the contractual appointment clause, leaving no basis for interference under writ jurisdiction.

Ratio Decidendi: A special statute with a non obstante clause governing conciliation and arbitration overrides a contrary contractual arbitration clause, and the statutory reference cannot be invalidated merely because the contract provides another method of appointing an arbitrator.

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