Summary
| Category | Data |
|---|---|
| Court | Supreme Court of India |
| Case Number | C.A. No.-000090-000090 – 2026 |
| Diary Number | 57801/2024 |
| Judge Name | HON’BLE MR. JUSTICE AUGUSTINE GEORGE MASIH |
| Bench | HON’BLE MR. JUSTICE AUGUSTINE GEORGE MASIH; HON’BLE MR. JUSTICE VIPUL M. PANCHOLI |
| Concurring or Dissenting Judges | None |
| Precedent Value | Binding |
| Overrules / Affirms |
|
| Type of Law | Arbitration procedure |
| Questions of Law | Whether “arbitral proceedings” for Section 9(2)/Rule 9(4) are deemed commenced on receipt of notice under Section 21, not on Section 11 petition filing |
| Ratio Decidendi |
The Court held that Section 21(“commencement”) applies to all Act provisions, including the 90-day mandate in Section 9(2). Rule 9(4)’s “initiated” must align with Section 21. An award of interim relief under Section 9 automatically requires arbitration to commence by notice receipt, and failure to do so within 90 days vacates the interim order. The High Court’s reliance on Section 11 filing date was contrary to statute and precedent. |
| Judgments Relied Upon |
|
| Logic / Jurisprudence / Authorities Relied Upon by the Court | Adoption of UNCITRAL Model Law wording in Section 21; consistent line of authority defining “commencement” as notice receipt; purposive reading of Section 9(2) and Rule 9(4). |
| Facts as Summarised by the Court | Appellant obtained ad-interim injunction (17 Feb 2024) under Section 9. Arbitration notice served (11 Apr 2024) and replied to (23 Apr 2024). High Court treated Section 11 petition date (28 Jun 2024) as commencement and vacated injunction. |
Practical Impact
| Category | Impact |
|---|---|
| Binding On | All courts and tribunals |
| Overrules | High Court of Karnataka’s judgment dated 14.11.2024 |
| Follows |
|
What’s New / What Lawyers Should Note
- Confirms that “commencement of arbitral proceedings” under Section 9(2) and Rule 9(4) is fixed by receipt of notice under Section 21, not by filing Section 11 petition.
- Rule 9(4)’s use of “initiated” must be read as aligned with Section 21’s “commencement.”
- Interim measures under Section 9 automatically require arbitration to begin by notice receipt within 90 days or the interim order lapses.
- High Court orders vacating injunctions on Section 11 petition delays can be challenged.
- Lawyers can rely on this ruling to defend interim reliefs pending arbitral reference once notice is served.
Summary of Legal Reasoning
- Statutory Text: Section 21 defines commencement as date respondent receives request to arbitrate; Section 9(2) mandates commencement within 90 days of interim order; Rule 9(4) vacates interim relief if proceedings not “initiated” in 3 months.
- Precedents: Sundaram Finance, Milkfood, Geo Miller, Arif Azim uniformly hold notice date under Section 21 triggers commencement for all Act purposes.
- Harmonious Construction: “Initiated” in Rule 9(4) must align with “commenced” in Section 21 to prevent circumvention of Section 9(2).
- High Court Error: Treated Section 11 petition date as commencement, contrary to statutory scheme and binding precedents.
- Application to Facts: Notice served on 11.04.2024 (reply 23.04.2024) is within 90 days from interim order (17.02.2024); arbitration duly commenced, injunction stands.
Arguments by the Parties
Petitioner
- Arbitration commences on respondent’s receipt of Section 21 notice.
- Notice served within 90-day window; no need to await Section 11 petition.
- High Court’s timeline based on Section 11 petition date is legally unsound.
Respondent No. 2
- Section 21 commencement applies only for limitation under Section 43(2).
- Section 9(2) timeline should run from constitution/filing under Section 11.
Factual Background
Regenta Hotels (Appellant) and M/s Hotel Grand Centre Point (Respondent No. 1) entered a franchise agreement in March 2019. After internal disputes, Appellant obtained an ad-interim injunction (17 Feb 2024) under Section 9 against Respondent No. 2. Appellant served arbitration notice on 11 Apr 2024; Respondent replied on 23 Apr 2024. The High Court vacated the injunction holding arbitration “commenced” only on Section 11 petition date (28 Jun 2024).
Statutory Analysis
- Section 9(2): Interim measures before arbitration must be followed by commencement within 90 days.
- Section 21: “Arbitral proceedings … commence on the date on which a request … is received by the respondent.”
- Section 43(2): Arbitration deemed commenced on Section 21 date for limitation.
- Rule 9(4) (2001 Rules): Interim orders vacate if arbitration not “initiated” within 3 months of Section 9 application—“initiated” read as “commenced.”
Alert Indicators
- ✔ Precedent Followed – Upholds Supreme Court line on “commencement”
- ⚖️ Split Verdict – No
- 📅 Time-Sensitive – No
- 🔄 Conflicting Decisions – High Court overruled