Arbitration Act | Commencement of Proceedings Triggered by Notice Receipt, Not Section 11 Filing: Supreme Court

“The objective of this statutory scheme would be defeated if a court is permitted to substitute the date of commencement under Section 21 with the date of filing a Section 11 petition.”— In a seminal ruling the Supreme Court of India, comprising Justice Dipankar Datta and Justice Augustine George Masih, set aside a judgment of the Karnataka High Court, firmly establishing that arbitral proceedings are deemed to commence on the date the respondent receives the notice invoking arbitration under Section 21, and not on the date a petition for the appointment of an arbitrator is filed under Section 11.

The Controversy: Section 9 Interim Relief vs. Statutory Timelines

The dispute arose from a Franchise Agreement between Regenta Hotels Private Limited (Appellant) and M/s Hotel Grand Centre Point (Respondent). Following alleged interference in hotel operations by the Respondent, the Appellant secured an ad-interim injunction under Section 9 of the Arbitration and Conciliation Act, 1996 ("the Act") on 17.02.2024. Under Section 9(2) of the Act, arbitral proceedings must commence within 90 days of such an interim order to prevent the order from being vacated.

The Appellant issued a notice invoking arbitration under Section 21 on 11.04.2024—well within the 90-day window. However, due to the Respondent's refusal to concur on an arbitrator, the Appellant filed a petition under Section 11 of the Act on 28.06.2024. The Karnataka High Court held that the proceedings only "commenced" upon the filing of the Section 11 petition. Since this filing occurred after the 90-day period expired, the High Court ruled that the interim injunction stood automatically vacated under Rule 9(4) of the High Court of Karnataka Arbitration (Proceedings Before the Courts) Rules, 2001.

“The statutory consequences tied to commencement, including the mandate under Section 9(2) of the Act, must be assessed solely with reference to the date of receipt of request invoking arbitration under Section 21 of the Act.”

The Legal Matrix: Decoupling Judicial Intervention from Commencement

The Supreme Court dismantled the High Court’s reasoning, clarifying that the legislature consciously delinked the commencement of arbitral proceedings from judicial proceedings. The Bench observed that Section 21 is a deeming provision where the receipt of notice by the respondent sets the arbitral process in motion. The Court held that conflating the "trigger" for arbitration (the notice) with the "remedial mechanism" (Section 11 petition) would rewrite the statute sub silentio.

The Court further analyzed the linguistic distinction between "initiation" used in the Karnataka Rules and "commencement" used in the Act. While "initiation" might linguistically precede commencement, in the statutory context, they must be read harmoniously. The Court ruled that for the purpose of saving an interim order under Section 9(2), the "initiation" requirement is satisfied the moment the Section 21 notice is received.

“If the commencement is to be construed from the date of filing of the petition under Section 11 of the Act, the statutory scheme insisting on expedition in commencing arbitration after the grant of interim protection under Section 9 would be rendered incoherent.”

Precedential Consistency and the 'Arif Azim' Doctrine

Drawing upon a consistent line of precedents including Sundaram Finance Ltd., Milkfood Ltd., and the recent three-judge bench decision in Arif Azim Company Limited v. Aptech Limited, the Court reiterated that the date of receipt of notice is definitive for all legal purposes, including limitation and the maintainability of Section 11 petitions.

The Bench noted that requiring a party to file a Section 11 petition merely to "save" an interim order—even when a respondent might be cooperating or when the contractual appointment process is underway—would be antithetical to the flexibility and autonomy provided by the Act.

The Supreme Court allowed the appeal, setting aside the High Court’s judgment and restoring the Trial Court’s order dated 17.02.2024 which granted the ad-interim injunction. The Court held that since the Appellant served the arbitration notice on 11.04.2024, the proceedings commenced well within the statutory 90-day period ending on 17.05.2024. The High Court was requested to expeditiously decide the pending Section 11 petition on its own merits.

Date of Decision: January 07, 2026