WHEN A NOTICE SPEAKS LOUDER THAN A PETITION: RE-ANCHORING THE COMMENCEMENT OF ARBITRATION

INTRODUCTION
The Supreme Court of India, in Regenta Hotels Private Limited v. M/s Hotel Grand Centre Point & Ors., 2026 INSC 32, Civil Appeal arising out of SLP (C) No. 30212 of 2024, delivered a significant ruling on 7 January 2026, clarifying the true meaning of “commencement of arbitral proceedings” under the Arbitration and Conciliation Act, 1996.
The Judgment was rendered by a Division Bench comprising Justice Dipankar Datta and Justice Augustine George Masih, with Justice Masih authoring the opinion. The Court decisively held that receipt of a notice invoking arbitration under Section 21 of the Act constitutes commencement of arbitral proceedings and not the filing of a petition under Section 11 for appointment of an arbitrator.

BRIEF FACTS
The Appellant, Regenta Hotels Private Limited, entered into a Franchise Agreement dated 23 March 2019 with Respondent No.1, a partnership firm owning a hotel in Srinagar. Under the Agreement, the Appellant was to provide brand value, operational expertise and management support for running the Hotel.
Subsequently, disputes arose among the partners of the Respondent Firm. One of the partners (Respondent No.2) allegedly interfered with the functioning of the hotel, threatened staff and disrupted operations. Faced with such interference, the Appellant approached the Bengaluru City Civil Court under Section 9 of the Arbitration and Conciliation Act, 1996, seeking interim protection. An ad-interim injunction was granted on 17 February 2024.
Within this period, the Appellant issued a notice invoking arbitration on 11 April 2024. However, since a petition under Section 11 for appointment of an arbitrator was filed only on 28 June 2024, the Trial Court and subsequently the Karnataka High Court held that arbitral proceedings had not commenced within 90 days as required under Section 9(2) of the Act, resulting in vacation of the interim protection.
Aggrieved, the Appellant approached the Supreme Court.

ISSUES OF LAW
The central legal issue before the Supreme Court was:
Whether arbitral proceedings can be said to have “commenced” for the purpose of Section 9(2) of the Arbitration and Conciliation Act, 1996, only upon filing of a Section 11 petition or whether issuance and receipt of a notice invoking arbitration under Section 21 is sufficient?

ANALYSIS OF THE JUDGMENT
The Supreme Court undertook a detailed examination of Sections 9, 21 and 43 of the Arbitration and Conciliation Act, 1996, along with Rule 9 of the Arbitration (Proceedings Before the Courts) Rules, 2001.
The Court reaffirmed the settled jurisprudence that Section 21 statutorily defines the commencement of arbitral proceedings. Once a request for referring disputes to arbitration is received by the respondent, arbitral proceedings are deemed to have commenced, unless the parties agree otherwise. This interpretation, the Court noted, has remained consistent from Sundaram Finance Ltd. v. NEPC India Ltd. to the recent Three-Judge Bench decision in Arif Azim Co. Ltd. v. Aptech Ltd.
Rejecting the High Court’s reasoning, the Supreme Court held that judicial proceedings such as filing a Section 11 petition are remedial in nature and cannot redefine the statutory trigger for commencement of arbitration. The Act deliberately delinks commencement of arbitration from court intervention in order to preserve party autonomy and procedural flexibility.
On the interpretation of Rule 9(4) of the 2001 Rules, which uses the term “initiated,” the Court harmonised it with Section 21, holding that “initiation” cannot be read as a concept distinct from or narrower than “commencement.” Any contrary reading would defeat the object of Section 9(2) and permit circumvention of the statutory framework.
Applying these principles to the facts, the Court found that the notice invoking arbitration issued on 11 April 2024—and acknowledged by the respondent in its reply dated 23 April 2024—fell well within the 90-day period prescribed under Section 9(2). Consequently, the interim protection granted earlier could not have lapsed.
The Supreme Court therefore set aside the Judgment of the Karnataka High Court and restored the interim injunction, while also directing expeditious disposal of the pending Section 11 petition.

CONCLUSION
This Judgment is a crucial reaffirmation of foundational arbitration principles under Indian law. By clearly holding that commencement of arbitral proceedings hinges on receipt of a Section 21 notice and not on court-driven mechanisms, the Supreme Court has prevented procedural rigidity from undermining substantive rights.
The ruling strengthens the efficacy of interim measures under Section 9, ensures consistency with international arbitration norms and curbs judicial overreach into clearly demarcated statutory domains. For practitioners and commercial entities alike, the decision provides welcome clarity and reinforces confidence in India’s arbitration regime as one grounded in certainty, autonomy, and legislative intent.

SUSHILA RAM VARMA
Advocate & Chief Consultant
The Indian Lawyer & Allied Service

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