Arbitration Commences with Issuance of Notice, Not with Court Proceedings

One of the most persistent misconceptions in Indian arbitration practice is the belief that arbitral proceedings begin only when a court steps in, either through a petition under Section 11 of the Arbitration and Conciliation Act, 1996 (“the Act”) for appointment of an arbitrator, or through judicial proceedings connected with arbitration. This misunderstanding has repeatedly led to adverse consequences for litigants, particularly in matters involving interim relief under Section 9 of the Act.

In a landmark judgment delivered in January 2026, the Supreme Court decisively clarified this position in Regenta Hotels Private Limited v. M/s Hotel Grand Centre Point & Ors. (2025), holding that arbitration commences with the issuance and receipt of a notice invoking arbitration under Section 21 of the Act, and not with the filing of court proceedings. The judgment restores doctrinal clarity, aligns Indian arbitration law with the UNCITRAL framework, and reinforces party autonomy as the cornerstone of arbitration.

Statutory Framework: Understanding Sections 9, 21, and 43

Section 9(2): Interim Relief Before Arbitration

Section 9 permits courts to grant interim measures before, during, or after arbitration (but before enforcement of the award). However, Section 9(2) introduces a discipline:

Where interim relief is granted before commencement, arbitral proceedings must commence within ninety days (or such extended time as the court may allow).

The purpose is to prevent abuse of interim relief without a genuine intent to arbitrate.

Section 21: The Statutory Trigger for Arbitration

Section 21 of the Act provides:

“Unless otherwise agreed by the parties, the arbitral proceedings in respect of a particular dispute commence on the date on which a request for that dispute to be referred to arbitration is received by the respondent.”

This provision is categorical. It identifies receipt of a request or notice invoking arbitration as the moment when arbitral proceedings commence. The statute deliberately decouples commencement from any judicial act.

Section 43(2): Commencement for Limitation Purposes

Section 43(2) reinforces this position by stating that, for the purposes of the Limitation Act, arbitration is deemed to have commenced on the date referred to in Section 21. This shows legislative intent to treat Section 21 as the universal point of commencement unless the parties agree otherwise.

Issue

• Does arbitration “commence” for the purposes of Section 9(2) when a court petition (such as under Section 11) is filed, or when a notice invoking arbitration under Section 21 is received by the respondent?

Facts in Regenta Hotels Case

In Regenta Hotels Private Limited v. M/s Hotel Grand Centre Point & Ors., the appellant had obtained ad-interim protection under Section 9. Subsequently, it issued a notice invoking arbitration under Section 21 within the prescribed ninety-day period. However, the Section 11 petition for the appointment of an arbitrator was filed later.

The High Court held that arbitral proceedings had not commenced within ninety days because the Section 11 petition was delayed, and therefore vacated the interim relief. This interpretation was challenged before the Supreme Court.

Supreme Court’s Ruling: Clear and Unequivocal

The Supreme Court categorically rejected the High Court’s approach and held:

• Arbitral proceedings commence only in terms of Section 21.
• Court proceedings under Sections 9 or 11 do not constitute commencement.
• Filing a Section 11 petition is a remedial step, not a triggering event.
• Once the respondent receives a valid notice invoking arbitration, commencement is complete.

The Court emphasised that treating Section 11 petitions as the starting point would distort the statutory framework and undermine party autonomy.

This holding is firmly rooted in precedent and statutory interpretation.

Consistency with Prior Supreme Court Jurisprudence

The judgment does not mark a departure but rather a reaffirmation of settled law.

Sundaram Finance Ltd. v. NEPC India Ltd. (1999)

The Court recognised that arbitration commences when notice invoking arbitration is served, even if court proceedings follow later.

Milkfood Ltd. v. GMC Ice Cream (P) Ltd. (2004)

A three-judge Bench clarified that Section 21 must be given full effect beyond limitation issues, and that service of notice determines commencement for all purposes.

Geo Miller & Co. v. Rajasthan Vidyut Utpadan Nigam Ltd. (2020)

The Court reiterated that the manner in which the process proceeds thereafter, whether by mutual consent or through a petition under Section 11, has no bearing on the date of commencement.

Arif Azim Co. Ltd. v. Aptech Ltd. (2024)

The Supreme Court consolidated earlier jurisprudence, holding that once a notice articulating the dispute is received, arbitral proceedings stand validly commenced.

The Regenta Hotels judgment harmonises seamlessly with this line of authority.

Interpretation of “Initiation” v. “Commencement”

An important aspect addressed by the Court was the language used in procedural rules framed by High Courts, particularly where the term “initiation” is employed instead of “commencement”.

The Court held that:

• Linguistically, initiation may precede commencement.
• Statutorily, however, for Section 9(2), “initiation” must be read in harmony with Section 21.
• Any other interpretation would render Section 21 nugatory and allow circumvention of the Act.

Thus, initiation cannot mean something less than commencement as defined by Section 21.

Why Court Proceedings Cannot Define Commencement

1. Party Autonomy

Arbitration is fundamentally a consensual and private mechanism for resolving disputes. Making commencement dependent on court action would erode party autonomy and judicialise arbitration unnecessarily.

2. UNCITRAL Model Law Alignment

Section 21 is modelled on Article 21 of the UNCITRAL Model Law. Internationally, arbitration begins with notice, not judicial intervention.

3. Practical Absurdities

If commencement depended on Section 11:

• Parties would be forced to rush to court even when appointment procedures are working.
• Cooperative respondents would be penalised.
• Interim relief under Section 9 would become unstable and unpredictable.

The Supreme Court rightly observed that such an interpretation would be antithetical to the flexibility intended by the Act.

Implications for Section 9 Interim Relief

The ruling has major practical consequences:

• Issuing a Section 21 notice within ninety days is sufficient to protect interim relief under Section 9.
• Parties are not required to file Section 11 petitions merely to preserve interim orders.
• Courts must examine whether a valid notice invoking arbitration was received, not whether an arbitrator was appointed.

This restores balance between judicial oversight and arbitral autonomy.

Conclusion

The Supreme Court’s ruling in Regenta Hotels Private Limited v. M/s Hotel Grand Centre Point & Ors. conclusively settles the legal position that arbitral proceedings commence upon the receipt of a notice invoking arbitration under Section 21 of the Arbitration and Conciliation Act, 1996. By rejecting the notion that arbitration begins with judicial intervention, the Court has reaffirmed the statutory scheme and preserved the autonomy of the arbitral process.

This clarification carries significant practical importance. It prevents unnecessary recourse to courts, ensures stability of interim relief granted under Section 9, and discourages dilatory tactics that undermine the efficiency of arbitration.

More importantly, the decision reinforces India’s commitment to an arbitration framework that is predictable, party-driven, and consistent with international best practices. In doing so, the Supreme Court has strengthened the foundational principles of arbitration and provided much-needed clarity for practitioners and litigants alike.

Important Link

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