The 10th Schedule of the Constitution of India, also known as the Anti-Defection Law, was added by the 52nd Amendment in 1985. It deals with the disqualification of members of Parliament and State Legislatures on the grounds of defection. Let us analyze each of the given options to determine which statement is NOT true:

1. The schedule lays down that elected members may be disqualified on the grounds of defection: This statement is true. The primary purpose of the 10th Schedule is to curb political defections and ensure stability by setting provisions for disqualification of members based on defection.
2. Disqualification on the ground of defection does not apply in cases of merger with another political party: This is the correct answer. According to the 10th Schedule, if a member's original party merges with another, members are exempt from disqualification if two-thirds of the members have agreed to the merger. This statement is a reflection of the provision in the law.
3. Cases of dispute are decided by the speaker or Chairman of the House concerned: This statement is true. The Speaker of the Lok Sabha or the Chairman of the Rajya Sabha has the authority to decide disqualification disputes under the Anti-Defection Law.
4. The Supreme Court of India is the final arbiter in cases which remain unresolved: This statement is NOT true. The decision of the Speaker or Chairman regarding disqualification is subject to judicial review, but the Supreme Court does not automatically become the final arbiter without prior judicial process. The courts can review these decisions, but not as an initial or automatic step.

Hence, the statement "Disqualification on the ground of defection does not apply in cases of merger with another political party" is the exception, as it correctly states a provision in the law that does apply in the context of the 10th Schedule.