MSME Ministry to Launch ODR Platform for Payment Disputes

MSMEs to Get Online Relief for Payment Delays

By Pratishtha Sehgal --
Friday, 25 Apr, 2025

The Ministry of MSME is in the process of introducing an Online Dispute Resolution (ODR) platform aimed at addressing the issue of delayed payments faced by MSMEs. This digital mechanism is being developed to offer an alternative to the existing Micro and Small Enterprises Facilitation Councils (MSEFCs), which are currently responsible for resolving such disputes under the provisions of the MSMED Act, 2006.

The proposed ODR platform is expected to provide a virtual environment for MSMEs to file payment-related complaints, upload relevant documents, and participate in remote hearings. The system is intended to facilitate resolution through digital arbitration, mediation, or conciliation, without requiring physical presence.

As of March 2025, more than 233,000 applications regarding delayed payments had been filed by MSMEs through the Samadhan portal, which is linked to the MSEFC mechanism. Only 27% of these cases have been resolved to date, with approximately 25% rejected and the remaining pending. The backlog and limited disposal rate have led to increasing pressure on the current dispute resolution infrastructure.

The ODR initiative is expected to address some of these limitations by enabling a faster, paperless process for dispute resolution. It aims to complement the existing system rather than replace it, and seeks to reduce the time and procedural costs involved in resolving payment-related cases. Details regarding the implementation timeline, technical specifications, and the operational framework of the ODR platform are yet to be officially released. However, the platform is being positioned as part of a broader effort to enhance digital support systems for MSMEs and improve mechanisms for contractual enforcement. Currently, in addition to MSEFCs, many MSMEs are approaching civil courts for relief. This has contributed to a growing number of delayed payment cases in the judicial system, which already has over 50 million pending cases across various categories.

The ODR platform, once operational, will be part of the government’s digital infrastructure supporting MSMEs, aiming to provide an accessible channel for resolving commercial disputes efficiently.

MSMEs to Get Online Relief for Payment Delays. The Ministry of MSME is in the process of introducing an Online Dispute Resolution (ODR) platform aimed at addressing the issue of delayed payments faced by MSMEs. This digital mechanism is being developed to offer an alternative to the existing Micro and Small Enterprises Facilitation Councils (MSEFCs), which are currently responsible for resolving such disputes under the provisions of the MSMED Act, 2006.

The proposed ODR platform is expected to provide a virtual environment for MSMEs to file payment-related complaints, upload relevant documents, and participate in remote hearings. The system is intended to facilitate resolution through digital arbitration, mediation, or conciliation, without requiring physical presence.

As of March 2025, more than 233,000 applications regarding delayed payments had been filed by MSMEs through the Samadhan portal, which is linked to the MSEFC mechanism. Only 27% of these cases have been resolved to date, with approximately 25% rejected and the remaining pending. The backlog and limited disposal rate have led to increasing pressure on the current dispute resolution infrastructure.

The ODR initiative is expected to address some of these limitations by enabling a faster, paperless process for dispute resolution. It aims to complement the existing system rather than replace it, and seeks to reduce the time and procedural costs involved in resolving payment-related cases. Details regarding the implementation timeline, technical specifications, and the operational framework of the ODR platform are yet to be officially released. However, the platform is being positioned as part of a broader effort to enhance digital support systems for MSMEs and improve mechanisms for contractual enforcement. Currently, in addition to MSEFCs, many MSMEs are approaching civil courts for relief. This has contributed to a growing number of delayed payment cases in the judicial system, which already has over 50 million pending cases across various categories.

The ODR platform, once operational, will be part of the government’s digital infrastructure supporting MSMEs, aiming to provide an accessible channel for resolving commercial disputes efficiently.