Regenta Hotels Private Limited vs M/s Hotel Grand Centre Point and Others

Held: No – Arbitral proceedings, as commenced by the Appellant, are well within the statutory time frame provided u/s.9(2) and the rigor of r.9(4), 2001 Rules is not applicable to the Appellant – The date on which the respondent receives a notice or request invoking arbitration is the moment at which the arbitral proceedings commence u/s.21 – A valid invocation requires the notice to articulate the dispute sought to be referred but once such notice is received, commencement is complete and effective for all legal purposes including limitation, maintainability of the s.11 Petition and the legal efficacy of any pre-arbitral measures – Trial Court passed the Order dtd.17.02.2024 granting ad-interim injunction to the Appellant – Period of ninety days as provided u/s.9(2) would end on 17.05.2024 – Appellant served a notice invoking arbitration on 11.04.2024 – Reply of Respondent No.2 dtd.23.04.2024 refusing to join in the appointment of an arbitrator entails that notice had indeed been received and understood as an invocation of the arbitral process by the Respondent No.2 – Even if 23.04.2024, the date on which the reply sent by the Respondent No.2, is taken to calculate the period of ninety days, as stipulated u/s.9(2) and the consequences thereof provided u/r.9(4), 2001 Rules, the arbitral proceedings have commenced well within the time and way before expiry of such periods – High Court treated the date of filing of the s.11 petition i.e. 28.06.2024 as the date of commencement of the arbitral proceedings resulting into the finding that ad-interim stay stood vacated and proceedings commenced after the expiry of ninety days period provided u/s.9(2) – This finding is not sustainable as it is contrary to the objective and purpose of the Act – Impugned Judgment of the High Court unsustainable, set aside – Order of the Trial Court dtd.01.10.2024 vacating the ad-interim injunction also set aside, restoring the earlier Order dtd.17.02.2024 [Paras 22, 28, 31 ]

Arbitration and Conciliation Act, 1996 – s.21: Held: The commencement of arbitral proceedings is a statutory event defined exclusively u/s.21, wherein the respondent’s receipt of a request to refer the dispute to arbitration sets the arbitral proceedings in motion and no judicial application i.e. whether u/s.9 or s.11 petition, constitutes commencement – Therefore, the statutory consequences tied to commencement, including the mandate u/s.9(2), must be assessed solely with reference to the date of receipt of request invoking arbitration u/s.21. [Para 23] Arbitration and Conciliation Act, 1996 – s.21 – Purpose of, explained. [Para 29]

Arbitration and Conciliation Act, 1996 – s.21 – Conscious delinking of the commencement of arbitral proceedings from any judicial proceedings based on the UNCITRAL framework: Held: The very frame of s.21 provides that the Legislature has consciously delinked the commencement of arbitral proceedings from any judicial proceedings – This is a deliberate legislative choice modelled on the UNCITRAL framework, meant to ensure that the commencement of arbitral proceedings is clear and independent of procedural contingencies – The objective of this statutory scheme would be defeated if a court is permitted to substitute the date of commencement u/s.21 with the date of filing a s.11 petition – Resort to the proceedings u/s.11 would be necessitated only in case there is refusal or no response to the notice u/s.21 – High Court proceeded on the premise that since the petition u/s.11 was filed on 28.06.2024, beyond three months from the date of ad-interim Order dtd.17.02.2024, the arbitral proceedings had not commenced within time – This view rests on a misconception regarding the statutory scheme – Article 21 of the Model Law of UNCITRAL. [Para 28] Arbitration and Conciliation Act, 1996 – ss.9(2), 21 – Rationale underlying s.9(2), discussed – If the commencement is to be construed from the date of filing of the petition u/s.11, the statutory scheme insisting on expedition in commencing arbitration after the grant of interim protection u/s.9 would be rendered incoherent – The applicant could serve notice u/s.21 but still be held non-compliant until a s.11 petition is filed, an interpretation which would be directly in contrast with the object and purpose of the Act – Permitting such an interpretation would mean that the parties would paradoxically be required to file the s.11 petition to prevent the lapse of interim measures granted u/s.9 even when the respondent is cooperating, the contractual appointment procedure is underway, or even when the s.21 notice has only recently been served – This is antithetical to the flexibility and autonomy provided in the Act. [Para 30]

Arbitration and Conciliation Act, 1996 – ss.21, 9(2) – In absence of any other provision providing for the date of commencement of the arbitral proceedings, s.21 is to apply to all the provisions of the Act unless specifically provided otherwise – Plea of the Respondent No.2 that the commencement u/s.21 is only for the purpose of calculating limitation u/s.43(2): Held: Not accepted – s.21 explicitly provides that arbitral proceedings commence on the date on which a request for dispute to be referred to arbitration is received by the respondent – In absence of any other provision providing for the date of commencement of the arbitral proceedings, s.21 is to be construed to apply to all the provisions of the Act unless specifically provided as not applicable – The only exception that is carved out in s.21 pertains to the arbitral agreement itself, providing that unless otherwise agreed by the parties, the date of commencement of arbitral proceedings must be from the date when notice or request invoking arbitration is received by the respondent – Therefore, as per the mandate of s.9(2), the arbitration proceedings shall commence within a period of ninety days from the date of such interim order or within such further time as the court may determine, and such commencement will be the date on which notice invoking arbitration is received by the respondent in consonance of s.21. [Para 23]