New Delhi:
The Supreme Court has reiterated that arbitral proceedings commence from the date on which a notice invoking arbitration is received by the respondent, and not from the date of filing a petition before the court for appointment of an arbitrator.
The Court clarified that Section 21 of the Arbitration and Conciliation Act, 1996 explicitly states that arbitration begins when a request to refer disputes to arbitration is received by the opposite party. Filing an application under Section 11 is only a procedural step undertaken when parties fail to mutually appoint an arbitrator.
The ruling was delivered while setting aside a judgment of the Karnataka High Court, which had vacated interim relief granted under Section 9 of the Act on the ground that arbitral proceedings were not initiated within the prescribed time period.
The Supreme Court observed that treating the filing of a Section 11 petition as the commencement of arbitration would be contrary to the statutory framework of the Act. It further noted that once a valid arbitration notice has been issued, parties should not suffer adverse consequences due to delays in judicial proceedings.
The judgment reinforces the principle that issuance and receipt of an arbitration notice is the decisive factor for determining the commencement of arbitral proceedings, particularly in matters concerning interim relief and statutory timelines.
Key Takeaways
- Arbitral proceedings commence upon receipt of notice invoking arbitration under Section 21
- Filing of a Section 11 petition does not mark the start of arbitration
- Delay in court appointment of arbitrator cannot be a ground to vacate Section 9 interim relief
- Parties cannot be penalized for procedural delays once arbitration has been validly invoked
- The ruling strengthens certainty and fairness under arbitration law