2026 INSC 32 C. A. No. ….. of 2026 @ SLP (C) No.30212/2024 Page 1 of 31

REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO. OF 2026

[ ARISING OUT OF SLP (CIVIL) NO. 30212 OF 2024 ]

WITH

CONTEMPT PETITION (CIVIL) NO.189 OF 2025

REGENTA HOTELS PRIVATE

LIMITED

… APPELLANT(S)

VERSUS

M/S HOTEL GRAND CENTRE POINT

AND OTHERS

… RESPONDENT(S)

J U D G M E N T

AUGUSTINE GEORGE MASIH, J.

Leave granted.

2. The instant Civil Appeal assails the Judgment

dated 14.11.2024 (“Impugned Judgment”)

passed by the High Court of Karnataka at

Bengaluru (“High Court”), whereby it dismissed

the Miscellaneous First Appeal No. 7168 of 2024

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(AA) filed by the Appellant herein against the

Order dated 01.10.2024 of the IX

th Additional

City Civil and Sessions Judge, Bengaluru (“Trial

Court”) in I.A. Nos. 5 to 7 in AA No. 4 of 2024

which has been filed under Order XXXIX Rules

1 and 2 read with Section 151 of the Code of

Civil Procedure, 1908 (“CPC 1908”) and Section

9 of the Arbitration and Conciliation Act, 1996

(“Act”) read with Rule 9 of the Arbitration

(Proceedings Before the Courts) Rules, 2001

(“2001 Rules”). The Trial Court vide Order dated

01.10.2024 dismissed the application seeking

temporary injunction restraining Respondent

No.2.

3. The Appellant herein is Regenta Hotels Private

Limited, a company registered under the

Companies Act, 1956, engaged in carrying

business, inter alia, of operating hotels and

providing hospitality services in India and

abroad. The Respondent No. 1 is M/s Hotel

Grand Centre Point, a partnership firm

registered under the Partnership Act, 1932.

Respondents No.2 to 5 are brothers and

partners of Respondent No.1 vide partnership

agreement entered on 01.04.2012, with each

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brother having 25% share in the partnership.

Respondent No.1 is owner of a hotel premises

located near Hatrick Restaurant, Raj Bagh,

Srinagar, Jammu and Kashmir (“Hotel”).

4. The abovementioned parties i.e., the Appellant

and Respondent No.1 entered into a Franchise

Agreement dated 23.03.2019. The terms of the

agreement were such that the Appellant would

aid and facilitate the business of Respondent

No.1 by contributing through its brand

reputation, technical know-how, training and

expertise in running premium quality hotel

businesses. In furtherance thereto, the

management and operations of Respondent

No.1 were being carried out as per the said

agreement.

5. Interregnum, the Respondents No. 2 to 5 were

involved in a family dispute over rights on

properties resulting into a settlement deed

dated 20.04.2022 providing that Respondent

No. 5 will be responsible for operations of the

Hotel for a period of two years and after the

expiry of said period, the Hotel operation shall

be conducted by such party who shall be

nominated by the parties by voting. Profits of

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the Hotel were decided to be share d by

Respondent No. 2 in the ratio of 25% and

Respondent No. 5 in the ratio of 33.50% as also

to include every month consideration for his

responsibility to operate the Hotel. The

remaining share was to be divided among

Respondent No. 3 and 4 in the ratio of 21.50%

and 20% respectively.

6. As transpires from the material on record, it is

alleged that Respondent No.2 started to

interfere in the functioning of the Hotel by

shouting at staff and threatening to cancel

bookings and taking away the records if not paid

exorbitant sums separately over and above the

agreed amount under the Franchise Agreement

dated 23.03.2019. As a consequence to the

alleged conduct of Respondent No. 2 , the

Appellant on 16.02.2024 approached the Trial

Court by way of an application under Section 9

of the Act being AA No.4 of 2024 seeking various

injunctive reliefs to restrain the Respondent

No.2 from interfering with the smooth

functioning of the Hotel claiming that Clause

5.1 of the Franchise Agreement stipulates that

Respondent No.1 will maintain a high moral and

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ethical standard and atmosphere at the Hotel

premises. The Appellant also filed thre e

applications being IA No.5 to 7 seeking interim

reliefs to restrain Respondent No.2 from

obstructing or impeding in smooth functioning,

operations and management of the Hotel

pending disposal of AA No.4 of 2024.

7. The Trial Court vide Order dated 17.02.2024

granted ad-interim injunction against the

Respondent No.2 as prayed for in IA No.5 to 7

till next date of the hearing and issued notice to

the Respondents.

8. Thereafter, the Appellant on 11.04.2024 issued

an Arbitration notice to the Respondents

invoking arbitration in terms of Clause 19.1 of

the Franchise Agreement for the adjudication of

the disputes that have arisen between the

parties. The Respondent No. 2, in response to

the said notice dated 11.04.2024, sent a reply

on 23.04.2024 refusing to concur with the

nomination of the Arbitrator claiming that he

has not signed any Franchise Agreement with

the Appellant. The Appellant, on 28.06.2024

filed CMP No.314 of 2024 under Section 11(6) of

Act before the High Court seeking appointment

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of sole Arbitrator and for referring the parties to

arbitration under the Franchise Agreement

dated 23.03.2019.

9. The Respondent No.2 has filed written

statement before Trial Court in AA No. 4 of 2024

denying allegations and contended that the suit

itself is not maintainable claiming that

Respondent No.2 is not a signatory to the

Franchise Agreement. He contested that

Respondent No.5 is not allowing Respondent

No.2 to inspect the books of accounts, ledgers

or bills etc.

10. The Trial Court vide Order dated 01.10.2024

dismissed IA Nos.5 to 7 filed by the Appellant

with the observation that the Appellant failed to

produce any document demonstrating that

Respondent No.2 granted consent for the

contested Franchise Agreement, thereby failing

to establish a prima facie case or the balance of

convenience in its favour. It was further stated

that AA No.4 of 2024 was filed on 16.02.2024,

and more than six and a half months had

elapsed without the Appellant producing any

document except for the notice and reply for

initiation of arbitral proceedings as mandated

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after filing an application under Section 9 of the

Act nor was any substantive material produced

to satisfy the requirements under Section 21 of

the said Act, as Respondent No.2 had not agreed

to refer the dispute to arbitration. The Trial

Court also observed that all partners held equal

rights under the partnership deed and must

obtain mutual written consent for any

substantive decision or agreement.

11. This Order dated 01.10.2024 was challenged by

the Appellant in Miscellaneous First Appeal No.

7168 of 2024 (AA) before the High Court. The

High Court vide Impugned Judgment dismissed

the appeal holding that Section 9(2) of the Act

read with Rule 9(4) of the 2001 Rules mandate

that arbitral proceedings must commence

within 90 days or three months from the date of

an interim order or presentation of the Section

9 application, failing which any interim relief

granted stands vacated automatically. The High

Court reiterated that arbitral proceedings

commence only when a request for reference to

arbitration is received by the respondent, and

mere issuance of notice does not constitute

such commencement. The petition under

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Section 11 of Act was filed on 28.06.2024 which

was beyond the permissible period, as arbitral

proceedings ought to have been initiated by

17.05.2024. The High Court, however, rejected

the contention of the Respondent No. 2 that he

is not a signatory to Franchise Agreement and

noted that the Trial Court erred in relying upon

clauses of the partnership deed to conclude

absence of a prima facie case or existence of

Franchise Agreement dated 23.03.2019 as the

same evidenced consent among partners and

was acted upon as the Hotel kept running as per

agreement and the partners kept quiet from

2019 to 2023. The High Court nevertheless

upheld the dismissal of the Appellant’s

application, holding that failure to initiate

arbitration within 90 days rendered the interim

order unsustainable, and issuance of notice

alone could not be construed as commencement

of arbitration.

12. It would not be out of way to mention here that

the above finding of High Court with respect to

the existence of the Franchise Agreement dated

23.03.2019 has not been challenged by the

Respondent No.2. It is only the Appellant being

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aggrieved by the dismissal of the Appeal by the

High Court on the ground of arbitration

proceedings having not commenced within 90

days from the date of ad-interim injunction, is

before this Court.

13. This Court, on 17.12.2024, while issuing notice

to the Respondents ha d granted interim

injunction in terms of Order dated 17.02.2024

of the Trial Court and continued it till the

disposal of the Appeal.

14. The learned counsel for the Appellant submits

that the arbitration proceedings commence on

the date of receipt of notice given under Section

21 of the Act unless parties agree otherwise. The

phrase commencement is defined under Section

21 of the Act, and it is also used in Section 9,

43(2) and 85(2) of the Act. In all these contexts,

this Court has held that it is the date of receipt

of notice under Section 21 that is determinative

of the commencement of arbitration

proceedings. Reliance is placed on Sundaram

Finance Ltd. v. NEPC India Ltd.

1, Arif Azim

Company Limited v. Aptech L imited

2,

1

(1999) 2 SCC 479

2

(2024) 5 SCC 313

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Milkfood Ltd. v. GMC Ice Cream (P) Ltd.

3, Geo

Miller and Company Private Limited v.

Chairman, Rajasthan Vidyut Utpadan

Nigam Limited

4. He submits that the dispute

between the brothers, who are partners of the

Respondent No.1, have no bearing on the

Franchise Agreement and in any case, it has

been decided in favour of the Appellant by the

High Court by the Impugned Judgment which

has not been challenged by the Respondents

either by filing an appeal or by cross-objections.

The learned counsel further submits that the

Respondent No.2 and other partners

suppressed an agreement dated 09.10.2025

entered into between them by which they have

decided to close the hotel in violation of this

Court’s interim order dated 17.12.2024.

15. The learned counsel for the Respondent No.2

submits that the Appellant’s right in the

management of the Hotel is limited to getting

royalty payment of 5% each month along with

taxes, while the Respondent No.1 retains and

exercises direct management and control over

the day-to-day operations of the Hotel, which

3

(2004) 7 SCC 288

4

(2020) 14 SCC 643

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was the duty Respondent No.5 has undertaken

and despite completion of two years has not

stepped down. The Respondent No.5 has not

taken written consent of all the partners while

signing the Franchise Agreement on behalf of

the Respondent No.1. He submits that Section

21 of the Act is a deeming provision whereby the

date of commencement of arbitral proceedings

relates back to the date on which the notice

invoking arbitration was received. Section 43(2)

of the Act provides that an arbitration is deemed

to have commenced from the date referred in

Section 21 of the Act. Reliance is placed on

State of Goa v. Praveen Enterprises

5,

contending that the primary object of Section 21

of the Act is to determine the date of

commencement of the arbitral proceedings to

decide if claims were ex-facie time barred. The

learned counsel further submits that

“commencement” in Section 21 is not for the

purpose of Section 9(2) of the Act but for Section

43, which explicitly mentions Section 21.

16. Having heard the learned counsels for the

parties and upon perusal of material on record,

5

(2012) 12 SCC 581

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it emerges that the finding as returned by the

High Court with regard to the existence of

Franchise Agreement dated 23.03.2019 is not

challenged by the Respondent No.2 by way of

cross-objection in this appeal nor is there any

material on record to show that any other

petition is filed in this regard. The said finding

has thus attained finality to the effect that the

consent of Respondent No.2 was there to the

Franchise Agreement.

16(A). The only issue which concerns the present

Appeal is whether the High Court was correct in

holding that the Appellant has initiated arbitral

proceedings after the expiry of 90 days period as

prescribed under Section 9(2) of the Act, thereby

resulting in automatic vacation of ad-interim

injunction in terms of Rule 9(4) of the 2001

Rules.

17. Before delving into the jurisprudential

foundation governing the commencement of the

arbitral proceedings under the Act, let us

reproduce the relevant provisions of the Act for

convenience.

18. Sections 9, 21 and 43(2) of Act read as follows:

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“9. Interim measures, etc., by Court.––(1) A

party may, before or during arbitral

proceedings or at any time after the making of

the arbitral award but before it is enforced in

accordance with section 36, apply to a court—

(i) for the appointment of a guardian for

a minor or a person of unsound mind

for the purposes of arbitral

proceedings; or

(ii) for an interim measure of protection in

respect of any of the following

matters, namely:—

(a) the preservation, interim

custody or sale of any goods

which are the subject-matter of

the arbitration agreement;

(b) securing the amount in dispute

in the arbitration;

(c) the detention, preservation or

inspection of any property or

thing which is the subject-

matter of the dispute in

arbitration, or as to which any

question may arise therein and

authorising for any of the

aforesaid purposes any person

to enter upon any land or

building in the possession of

any party, or authorising any

samples to be taken or any

observation to be made, or

experiment to be tried, which

may be necessary or expedient

for the purpose of obtaining full

information or evidence;

(d) interim injunction or the

appointment of a receiver;

(e) such other interim measure of

protection as may appear to the

Court to be just and convenient,

and the Court shall have the same power for

making orders as it has for the purpose of,

and in relation to, any proceedings before it.

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(2) Where, before the commencement of the

arbitral proceedings, a Court passes an order

for any interim measure of protection under

sub-section (1), the arbitral proceedings shall

be commenced within a period of ninety days

from the date of such order or within such

further time as the Court may determine.

(3) Once the arbitral tribunal has been

constituted, the Court shall not entertain an

application under sub-section (1), unless the

Court finds that circumstances exist which

may not render the remedy provided under

section 17 efficacious.

21. Commencement of arbitral

proceedings.––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.

43. Limitations.––(1) . . .

(2) For the purposes of this section and the

Limitation Act, 1963 (36 of 1963), an

arbitration shall be deemed to have

commenced on the date referred in section 21.”

19. The jurisprudential foundation governing the

commencement of arbitral proceedings under

the Act stands on a principled and consistent

line of authority emanating from this Court. In

Sundaram Finance Ltd. (supra) , this Court,

while dealing with the issue as to whether a

court has jurisdiction to pass interim orders

under Section 9 of the Act even before the

arbitral proceedings commence, has observed

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that reading of Section 21 of the Act clearly

shows that the arbitral proceedings commence

on the date on which a request for a dispute to

be referred to arbitration is received by the

respondent.

20. The contours of this principle were later given

sharper precision in Milkfood Ltd. (supra),

wherein a three-Judge Bench of this Court held

that the Legislature has deliberately adopted the

UNCITRAL Model Law’s formulation , whereby

the arbitral proceedings commence upon

respondent’s receipt of a request or notice that

the dispute be referred to arbitration. The

provisions under Section 21 of the Act are

consistent with Article 21 of the Model Law of

UNCITRAL. The Court further observed that the

issuance of notice under Section 21 is required

to be interpreted broadly and not for the

purpose of limitation only but for other

purposes also.

21. In Geo Miller (supra), this Court reaffirmed the

principles of Milkfood Ltd. (supra), holding

that for the purpose of determining which law

applies or for computing limitation, the date of

commencement is invariably the date on which

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the notice invoking arbitration is received by the

respondent. The Court clarified that the

procedural route adopted thereafter i.e. ,

whether the parties agree on an arbitrator or

whether a Section 11 petition becomes

necessary, is irrelevant to the date of

commencement, which remains tethered

exclusively to Section 21 of the Act.

22. In Arif Azim (supra), a three-Judge Bench of

this Court has consolidated and restated what

is being held in Milkfood Ltd. (supra) and Geo

Miller (supra). The Court re-emphasized that

the date on which the respondent receives a

notice or request invoking arbitration is the

moment at which the arbitral proceedings

commence under Section 21 of the Act. It

further clarified that 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 Section 11 Petition and

the legal efficacy of any pre-arbitral measures.

The relevant portion in paras 88 to 91, are

reproduced herein:

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“88. Section 21 of the 1996 Act provides that

the arbitral proceedings in relation to a dispute

commence when a notice invoking arbitration

is sent by the claimant to the other party:

‘21. Commencement of arbitral

proceedings.—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.’

89. In Milkfood Ltd. v. GMC Ice Cream (P)

Ltd. [(2004) 7 SCC 288] , it was observed thus

: (SCC pp. 301-302 & 307, paras 26-27, 29 &

49)

‘26. The commencement of an

arbitration proceeding for the purpose

of applicability of the provisions of the

Indian Limitation Act is of great

significance. Even Section 43(1) of the

1996 Act provides that the Limitation

Act, 1963 shall apply to the arbitration

as it applies to proceedings in court.

Sub-section (2) thereof provides that for

the purpose of the said section and the

Limitation Act, 1963, an arbitration

shall be deemed to have commenced on

the date referred to in Section 21.

27. Article 21 of the Model Law which

was modelled on Article 3 of

the Uncitral Arbitration Rules had been

adopted for the purpose of drafting

Section 21 of the 1996 Act. Section 3 of

the 1996 Act provides for as to when a

request can be said to have been

received by the respondent. Thus,

whether for the purpose of applying the

provisions of Chapter II of the 1940 Act

or for the purpose of Section 21 of the

1996 Act, what is necessary is to

issue/serve a request/notice to the

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respondent indicating that the claimant

seeks arbitration of the dispute.

***

29. For the purpose of the Limitation

Act an arbitration is deemed to have

commenced when one party to the

arbitration agreement serves on the

other a notice requiring the

appointment of an arbitrator. This

indeed is relatable to the other

purposes also, as, for example, see

Section 29(2) of the (English)

Arbitration Act, 1950.

***

49. Section 21 of the 1996 Act, as

noticed hereinbefore, provides as to

when the arbitral proceedings would

be deemed to have commenced. Section

21 although may be construed to be

laying down a provision for the purpose

of the said Act but the same must be

given its full effect having regard to the

fact that the repeal and saving clause

is also contained therein. Section 21 of

the Act must, therefore, be construed

having regard to Section 85(2)(a) of the

1996 Act. Once it is so construed,

indisputably the service of notice

and/or issuance of request for

appointment of an arbitrator in terms of

the arbitration agreement must be held

to be determinative of the

commencement of the arbitral

proceeding.’

90. Similarly, in BSNL v. Nortel Networks

(India) (P) Ltd. [(2021) 5 SCC 738], it was held

by this Court thus: (SCC p. 766, para 51)

‘51. The period of limitation for issuing

notice of arbitration would not get

extended by mere exchange of letters,

[S.S. Rathore v. State of M.P., (1989) 4

SCC 582 : 1990 SCC (L&S) 50; Union of

India v. Har Dayal, (2010) 1 SCC

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394; CLP (India) (P) Ltd. v. Gujarat Urja

Vikas Nigam Ltd., (2020) 5 SCC 185] or

mere settlement discussions, where a

final bill is rejected by making

deductions or otherwise. Sections 5 to

20 of the Limitation Act do not exclude

the time taken on account of settlement

discussions. Section 9 of the Limitation

Act makes it clear that: ‘where once the

time has begun to run, no subsequent

disability or inability to institute a suit

or make an application stops it’. There

must be a clear notice invoking

arbitration setting out the “particular

dispute” [ Section 21 of the Arbitration

and Conciliation Act, 1996.] (including

claims/amounts) which must be

received by the other party within a

period of 3 years from the rejection of a

final bill, failing which, the time bar

would prevail.’

91. In the present case, the notice invoking

arbitration was received by the respondent on

29-11-2022, which is within the three-year

period from the date on which the cause of

action for the claim had arisen. Thus, it cannot

be said that the claims sought to be raised by

the petitioner are ex facie time-barred or dead

claims on the date of the commencement of

arbitration.”

23. Upon perusal of the binding decisions of this

Court and provisions of the Act, there is no

doubt left with regard to the correct

conceptualization of “commencement of arbitral

proceedings” under the Act. The settled position

as emerged is that the commencement of

arbitral proceedings is a statutory event defined

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exclusively under Section 21 of the Act, 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 under Section 9 or

Section 11 petition, constitutes commencement.

Therefore, the statutory consequences tied to

commencement, including the mandate under

Section 9(2) of the Act, must be assessed solely

with reference to the date of receipt of request

invoking arbitration under Section 21 of the Act.

24. The contention of the Respondent No.2 that the

commencement under Section 21 of the Act is

only for the purpose of calculating limitation

under Section 43(2) of the Act does not find force

with us. Section 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, Section 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 Section 21

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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

Section 9(2) of the Act, 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

Section 21 of the Act.

25. At this stage, it requires to be mentioned that

the consequences flowing from the non -

compliance of mandate under Section 9(2) of the

Act are not provided for in the said Act. To fill in

this gap reference is required to be made at this

juncture to Rule 9 of 2001 Rules framed by the

High Court as per the powers conferred on it

under Section 82 of the Act, which reads as

follows:

“Rule 9. Application for interim measure,

etc.––(1) When an application is made for an

interim measure, under Section 9 of the Act, the

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Court shall in all cases, except where it

appears that the object of granting the interim

measure would be defeated by the delay,

before passing the interim order, direct notice

of the application to be given to the opposite

party:

Provided that, where it is proposed to make an

order by way of interim measure without giving

notice of the application to the opposite party,

the Court shall record the reasons for its

opinion that the object of granting the interim

measure would be defeated by delay, and

require applicant.––

(a) to deliver to the opposite party, or to sent

to him by registered post, immediately

after the order granting the interim

measure has been made, a copy of the

Application for interim order together

with:

(ii) a copy of affidavit filed in support of

the application;

(iii) copies of documents on which the

applicant relies;

(b) to file, on the day on which such interim

order is granted or on the day

immediately following that day, an

affidavit stating that the copies aforesaid

have been so delivered or sent.

(2) Where an interim order has been granted

without giving notice to the opposite party, the

Court shall make endeavours to finally

dispose of the Application within thirty days

from the date on which the interim order was

granted and where it is unable so to do, it

shall record its reasons for such inability.

(3) In an application for interim measure filed

under Section 9, before the commencement of

the arbitral proceedings, the applicant shall

specifically refer to the steps, if any, already

taken to seek arbitration and that he is willing

and prepared to take necessary steps with

utmost expedition to seek reference to

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arbitration in terms of the Arbitration

Agreement/Clause.

(4) In the case of an application for interim

measure made before initiating arbitral

proceedings, if the arbitral proceedings are

not initiated within three months from the

date of the presentation of the Application

under Section 9, any interim order granted

shall stand vacated without any specific order

being passed by the Court to that effect.”

26. Upon the reading of Section 9 of the Act, it is

evident that the said section does not provide for

the consequences of non-compliance with its

mandate of commencing arbitral proceedings

within ninety days, however, the said vacuum

stands statutorily filled through Rule 9(4) of the

2001 Rules. According to this Rule where an

interim order has been granted on an

application made under Section 9 of the Act but

no arbitral proceedings are initiated within

three months from the date of presentation of

the application, the interim order shall stand

vacated automatically.

27. It requires to be noted and mentioned here that

Rule 9(4) employs the expression “initiated”

whereas Section 9(2) uses the expression

“commenced” in the context of arbitral

proceedings. As per Concise Oxford English

Dictionary (Eleventh Edition, Revised), the term

“initiation” connotes the act of causing

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something to begin or taking the first step

towards beginning a process, whereas

“commencement” denotes the actual beginning

of the process itself, which is a step further than

mere initiation. Thus, linguistically, initiation

precedes commencement and as per Rule 9(4)

the initiation shall be within three months from

the date of presentation of such application,

which would be before the commencement as

per Section 21 of Act and would ideally be the

date on which the notice invoking arbitration is

sent by a party. However, the expression

“initiated” occurring in Rule 9(4) cannot be

interpreted in isolation or in a manner divorced

from the statutory context in which it appears.

Rule 9 has been framed in aid of, and to give

procedural effect to, Section 9 of the Act, and

therefore the terminology employed therein

must be construed harmoniously with the

parent provision. If “initiation” in Rule 9(4) were

to be understood as something short of

“commencement” as contemplated under

Section 21 of the Act, the mandate under

Section 9(2) prescribing a strict timeline for

commencement of arbitral proceedings would

be rendered otiose and susceptible to

C. A. No. ….. of 2026 @ SLP (C) No.30212/2024 Page 25 of 31

circumvention. Consequently, for the purposes

of Rule 9(4), the expression “initiated” has

necessarily to be read as “commenced” within

the meaning of Section 21 of the Act. It follows

that upon failure to commence arbitral

proceedings within three months, the period

stipulated under Rule 9(4) of 2001 Rules

attracts the consequence as provided therein,

namely, the interim order shall stand vacated

automatically.

28. In the case at hand, the High Court proceeded

on the premise that since the petition under

Section 11 was filed on 28.06.2024, beyond

three months from the date of ad-interim Order

dated 17.02.2024, the arbitral proceedings had

not commenced within time. This view of the

High Court rests on a misconception regarding

the statutory scheme. The very frame of Section

21 provides that the Legislature has consciously

delinked the commencement of arbitral

proceedings from any judicial proceedings. This

Court, in Milkfood Ltd. (supra) described this

as a deliberate legislative choice modelled on the

UNCITRAL framework, meant to ensure that the

commencement of arbitral proceedings is clear

C. A. No. ….. of 2026 @ SLP (C) No.30212/2024 Page 26 of 31

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 under Section 21 with

the date of filing a Section 11 petition. Resort to

the proceedings under Section 11 would be

necessitated only in case there is refusal or no

response to the notice under Section 21 of the

Act.

29. The High Court in the Impugned Judgment

conflates the trigger for arbitral proceedings

with remedial mechanism made available when

the respondent obstructs or declines to

participate. The purpose of Section 21 is to

specify the date of commencement of arbitral

proceedings in order to determine whether a

claim is barred by limitation and whether a

party has complied with the requisite statutory

or contractual time limit for initiation of

arbitration. If the date of filing of the Section 11

petition is to be treated as the date of

commencement of arbitral proceedings, as has

been observed by the High Court in the

Impugned Judgment, that would result into the

displacement of commencement of arbitral

C. A. No. ….. of 2026 @ SLP (C) No.30212/2024 Page 27 of 31

proceedings as provided under Section 21 and

would be contrary to the text and purpose of the

Act. Such a position is impermissible as has

been consistently held in the dicta of this Court

from the decision in Sundaram Finance Ltd.

(supra) to that in Arif Azim (supra).

30. The rationale underlying Section 9(2) of the Act

is that the arbitral proceedings shall be

commenced within ninety days from the grant

of interim protection. This prevents a party from

abusing Section 9 to obtain interim protection

without submitting to the arbitral forum and it

also ensures that interim measures remain tied

to the arbitration they are meant to support. If

this safeguard is interpreted in a manner that

contradicts the statutory definition of the

commencement, to do so would allow courts to

rewrite Section 21 sub silentio. If the

commencement is to be construed from the date

of filing of the petition under Section 11 of the

Act, the statutory scheme insisting on

expedition in commencing arbitration after the

grant of interim protection under Section 9

would be rendered incoherent. The applicant

could serve notice under Section 21 but still be

C. A. No. ….. of 2026 @ SLP (C) No.30212/2024 Page 28 of 31

held non-compliant until a Section 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 Section 11

petition to prevent the lapse of interim measures

granted under Section 9 of the Act even when

the respondent is cooperating, the contractual

appointment procedure is underway, or even

when the Section 21 notice has only recently

been served. This is antithetical to the flexibility

and autonomy provided in the Act.

31. The legal position as settled when applied to the

present factual matrix yields a clear conclusion.

The Trial Court passed the Order dated

17.02.2024 granting ad-interim injunction to

the Appellant. The period of ninety days as

provided under Section 9(2) of the Act would end

on 17.05.2024. The Appellant served a notice

invoking arbitration on 11.04.2024. The reply of

Respondent No. 2 dated 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

C. A. No. ….. of 2026 @ SLP (C) No.30212/2024 Page 29 of 31

process by the Respondent No.2. Under Section

21 of the Act, the date of receipt of the notice is

the date of commencement of arbitral

proceedings. 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 under Section 9(2) of the Act and the

consequences thereof provided under Rule 9(4)

of the 2001 Rules, the arbitral proceedings have

commenced well within the time and way before

expiry of such periods. The High Court,

however, in the Impugned Judgment treated the

date of filing of the Section 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 under Section 9(2)

of the Act. This finding of the High Court cannot

sustain as it is contrary to the objective and

purpose of the Act. The arbitral proceedings, as

commenced by the Appellant, is well within the

statutory time frame provided under Section

9(2) of the Act and the rigor of Rule 9(4) of the

2001 Rules cannot be attracted to the

Appellant.

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32. Therefore, in the light of the above discussion

and perusal of material on record, the Impugned

Judgment of the High Court is set aside for

being unsustainable in law. As a consequence

thereof, the Order dated 01.10.2024 of the Trial

Court vacating the ad-interim injunction also

stands set aside, restoring the earlier Order

dated 17.02.2024.

33. Before parting, it is essential that we request the

High Court to expeditiously decide the Section

11 petition filed by the Appellant for

appointment of the arbitrator on its own merits

and in accordance with law, if already not

decided. Nothing stated in this judgment will

influence or prejudice the arbitral process in

any manner.

34. The appeal is allowed in the above terms.

35. As the appeal stands allowed, we would not like

to proceed as of now with the Contempt Petition

(C) No.189 of 2025 as filed by the appellant and

the same is disposed of at this stage.

36. There shall be no order as to costs.

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37. Pending application(s), if any, stand disposed of.

.……..………..……………………..J.

[ DIPANKAR DATTA ]

.……..………..……………………..J.

[ AUGUSTINE GEORGE MASIH ]

NEW DELHI;

JANUARY 07, 2026.