The Ministry of MSME launched a fully digital Online Dispute Resolution (ODR) portal on 27 June 2025 — International MSME Day, inaugurated by the President of India — and since 15 October 2025, every new delayed-payment case must start here rather than on the older Samadhaan portal.
1. Why this exists — the problem it's solving
India has only around 1,161 Micro and Small Enterprises Facilitation Councils (MSEFCs) nationwide, and most states have just one — a supplier in a large state often had to travel a long distance for a hearing, only to find the opposite party absent or the hearing cancelled. The ODR portal moves every stage — complaint filing, summons, pleadings, evidence, hearings, arguments, orders, final disposal, settlement tracking, and award enforcement — online, so none of that travel is necessary.
2. Who can file, and what happens the moment you do
Only a Micro or Small Enterprise with an active Udyam registration can file — Medium enterprises don't qualify under this route, and (as covered in our Udyam registration guide) the registration must have existed at the time of the disputed supply. The moment a complaint is filed with supporting documents, both the supplier and the buyer are notified by SMS and email, and the buyer is given 3 days to log in, choose whether to engage with the voluntary pre-MSEFC stage, and submit their own response and documents.
3. The pre-MSEFC stage — voluntary, and only if both sides agree
Before the matter ever reaches a facilitation council, the portal offers an optional out-of-court settlement stage, available only if both the supplier and the buyer opt in. It runs through one or both of two mechanisms, in sequence if both are used:
Digital Guided Pathway: the portal's AI analyses the facts and documents both sides have filed, along with relevant case law, and proposes a probable settlement outcome. If both parties accept it, a settlement agreement is signed digitally on the spot and the dispute closes there.
Unmanned Negotiation: a confidential digital space where the supplier and buyer — optionally with an advocate or authorised representative each — negotiate directly. Reaching agreement here also produces a digitally signed settlement record.
If either party opts out at any point, the pre-MSEFC stage doesn't happen at all, and the case proceeds straight to the formal MSEFC stage.
Timelines are strict
- Buyer must respond and opt in/out within 3 days of being notified.
- The pre-MSEFC stage must conclude within 15 days of the case being filed.
- Both parties can jointly request one 15-day extension — beyond that, pre-MSEFC automatically terminates.
- If it terminates without resolution, the case moves straight to MSEFC — no separate application needed.
4. What happens if pre-MSEFC settlement isn't honoured
A signed pre-MSEFC settlement isn't the end of the road if the buyer doesn't actually pay per its terms — the case automatically moves to the MSEFC stage from there, which functions as it always has: conciliation first, and arbitration under the Arbitration and Conciliation Act, 1996 if that fails, with the resulting award enforceable as a civil court decree.
5. The ₹4,000 financial assistance — real, but not universal
The scheme genuinely offers financial assistance of up to ₹4,000 per MSE, intended to help cover documentation and facilitation-council costs, funded from a ₹189 crore, three-year outlay under the RAMP scheme. But three conditions matter before assuming it applies to you:
- It's available only to Micro and Small enterprises with valid Udyam registration — Medium enterprises are excluded entirely.
- It's "up to" ₹4,000, not a guaranteed flat payment — the actual amount depends on costs genuinely incurred.
- It draws from a capped, time-bound budget, not an open-ended entitlement — treat it as a helpful offset, not a fee waiver you can bank on for every filing.
6. What this doesn't change
ODR is a new procedural channel, not a new legal right. Section 15's 45-day payment limit and Section 16's statutory compound interest at roughly 3× the RBI bank rate are exactly as they were — and the Udyam registration timing rule still applies: registration has to have existed at the time of the supply in dispute for that supply to be protected, ODR filing convenience doesn't change that requirement.