Commencement of Arbitration: Section 21
1 Cause of action for commencement of Arbitration proceedings and Cause of action for Appointment of Arbitrator u/s 11(6) are two different things.
2 Unless otherwise agreed, Arbitration proceeding commences on the date on which the Recipient of the Notice, receives from the claimant, a request for referring the dispute to arbitration.
3 A Notice u/s 21, invoking Arb., do not require elaborate particulars of nature of dispute that have arisen between parties. A Notice seeking reference to Arb. for Resolution of dispute, is sufficient.
4 Mere reference to a wrong provision or terms of the Agreement cannot invalidate the Notice u/s 21.
5 Notice merely saying that it has right to initiate Arbitration, does not constitute a Notice u/s 21 of the Act.
6 Importance of giving Notice u/s 21 of the Act.
7 Arbitration invoked u/s 21 and Statement of Claim filed without passing Board Resolution in that behalf, is a defect which cannot be cured by passing Resolution post initiation of proceedings.
8 Aspect of giving Notice u/s 21 goes to very root of the matter the absence of which hits at very jurisdiction of High Court to entertain application for appointment of Arbitrator u/s 11(6) of the Act.
9 A Notice invoking Arbitration must clearly spells out the intention, invoking Arbitration, and referring the subject dispute to Arbitration / Arbitrator / Arbitral Institution.
10 It is sufficient compliance of S.21 if it is mentioned that “to refer the matter to the Arbitration and there is no requirement that Arbitrator should be named in the Notice.
11 The mere fact that the parties have named the Arbitrator in the Arb. Ag. would not imply that the parties have agreed to waive the requirement of Notice contemplated under Section 21 of the Act.
12 Notice u/s 21 of the Act have to be given before filing Application u/s 11 of the Act for Appointment of Arbitrator.