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Section 21: Commencement of arbitral proceedings

Arbitration and Conciliation Act, 1996 • Official Statutory Text & Practice Guide

Statutory Regulation
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Competent Court / Tribunal
Act 1996
Section 20 All 87 Sections Schedules (4th, 5th, 7th) Section 22

Legal Commentary & Landmark Judgments: Section 21

Section 21 of the Arbitration and Conciliation Act, 1996 defines the precise moment of commencement of arbitral proceedings, providing that proceedings commence on the date on which a request for the dispute to be referred to arbitration is received by the respondent.

  • Statutory Commencement Trigger: 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.
  • Mandatory Pre-condition for Section 11: Issuance and receipt of a Section 21 notice is a mandatory statutory prerequisite before a Section 11 petition can be entertained by the High Court.
  • Stopping Limitation Clock: Receipt of the Section 21 notice stops the limitation period under Section 43 of the Act and Article 137 of the Limitation Act.
  • Demarcation of Referred Disputes: The scope of claims referred to arbitration is demarcated by the disputes set out in the Section 21 notice.
Key Landmark Precedents:
  • State of Goa v. Praveen Enterprises, (2012) 12 SCC 581: The Supreme Court held that Section 21 determines the date on which arbitration commences for limitation purposes; however, a respondent can file a counterclaim before the arbitrator even if not mentioned in the Section 21 notice, limitation for which stops on filing before the tribunal.
  • Alupro Building Systems (P) Ltd. v. Ozone Overseas (P) Ltd., 2017 SCC OnLine Del 7228: The Delhi High Court authoritatively held that the issuance of a Section 21 notice is mandatory; an ex-parte arbitration commenced without service of a Section 21 notice is void ab initio.
Courtroom Practice & Strategic Litigation Guidance:

Always issue a formal, detailed Section 21 Notice of Invocation clearly articulating: (1) existence of arbitration clause; (2) nature of disputes and quantified claims; and (3) proposed arbitrator names; verify proof of delivery before filing under Section 11.

Section 20 All 87 Sections Schedules (4th, 5th, 7th) Section 22