For a young entrepreneur, few things are more discouraging than doing the work, delivering on promises, and then being left waiting endlessly for payments. For many MSMEs and startups, delayed payments from bigger clients or disputes with partners can threaten survival itself. Traditionally, the only path forward was litigation—expensive, time-consuming, and draining for small businesses trying to establish themselves.

But in recent years, there has been a quiet shift. Laws such as the MSME Development Act, 2006 and provisions within the Companies Act, 2013 have started encouraging conciliation and mediation before matters move into long courtroom battles. Under the MSME law, for example, claims for delayed payments are often first referred to the MSME Facilitation Council, which attempts a form of mediation. Likewise, before the National Company Law Tribunal (NCLT), parties can be guided to a Mediation and Conciliation Panel, providing them a chance to settle quickly and privately.

The difference this makes for small businesses and startups is enormous. Instead of years of uncertainty, a founder can hope to recover dues or resolve shareholder disputes in a matter of weeks. Instead of exhausting scarce funds on prolonged litigation, resources can be channeled back into growth. Just as importantly, relationships—with vendors, partners, or investors—are often preserved.

Mediation does not promise that every dispute will end in agreement. Some conflicts do need formal adjudication. Yet, for many MSMEs, it offers something litigation rarely does: a process that is confidential, less adversarial, and designed to find middle ground. In a world where startups depend not just on money but on trust, this can mean the difference between collapse and continuity.

For India’s growing community of entrepreneurs, mediation is becoming more than a legal provision—it is a support system. It gives smaller players a level playing field, ensuring that they are not crushed by bigger corporations with deeper pockets. In this sense, mediation is not just about resolving disputes. It is about giving startups the confidence that the system has space for them to grow, to be heard, and to evolve.