Delhi High Court: In a petition under Section 11(6) of the Arbitration and Conciliation Act, 1996 (‘Arbitration Act’) for appointment of an arbitrator, Dinesh Kumar Sharma, J., dismissed the petition while holding that the mere issuance of notice under Section 21 of the Arbitration Act does not constitute service of the notice and observed that receipt of the notice by the respondent is mandatory to commence arbitration proceedings.
Background
An agreement was entered into between the petitioner and respondent, after which a purchase order was issued. Thereafter, disputes arose between the parties and an arbitration notice was issued by the petitioner to the respondent, by virtue of the arbitration clause contained in the agreement.
The respondent asserted that the purported arbitration notice under Section 21 of the Arbitration Act was never served upon the respondent and that the notice was addressed to “T-5, Mangol Puri Industrial Area, Phase I, New Delhi” whereas the complete address of the respondent was “T-5/237, Mangol Puri, Industrial Area, Phase-I, New Delhi-110083”, as reflected in the agreement between the parties. Respondent further contended that in absence of notice under Section 21 of the Arbitration Act the petition for appointment of arbitrator was not maintainable.
Decision and Analysis
The Court, referring to Section 21 of the Arbitration Act, said it was settled law that service of notice is a prerequisite for the commencement of arbitration proceedings.
The Court further cited Alupro Building Systems Pvt. Ltd. v. Ozone Overseas Pvt. Ltd., 2017 SCC OnLine Del 7228, wherein it was held that simply issuing a notice under Section 21 of the Arbitration Act was not sufficient and receipt of the notice by the addressee was mandatory for the commencement of the arbitration proceedings.
The Court noted that there was no reason for it to dissent from the already laid down position of law and held that given the facts of the present case, the notice had not been sent to the complete address of the respondent thereby resulting in the incomplete service of the notice under Section 21 of the Arbitration Act.
The Court, therefore, dismissed the petition.
[Indian Spinal Injuris Centre v. Galaxy India, 2024 SCC OnLine Del 4385, Order dated 08-05-2024]
Advocates who appeared in this case :
Advocate for the Petitioner: Sandeep Kapoor, Advocate
Advocates for the Respondent: Anshul Goel, Sanjeev Kumar, Ashok Goel, Advocates
Buy Arbitration and Conciliation Act, 1996 HERE
