Bombay High Court: No Need For New Section 21 Notice For Re-Commencing Arbitration After Award Is Set Aside

Bombay High Court: No Need For New Section 21 Notice For Re-Commencing Arbitration After Award Is Set Aside

The Bombay High Court has ruled that there is no need for a Section 21 notice to re-commence arbitration following the setting aside of the initial award under Section 34 of the Arbitration and Conciliation Act (A&C Act).

Justice Bharati Dangre determined that in such circumstances, a fresh invocation notice would not be necessary as the opposing party would already be cognizant of the dispute's existence.

Kirloskar Pneumatic Company entered into a dealership agreement with Kataria Sales Corporation. Subsequently, Kataria Sales placed a purchase order with Kirloskar Pneumatic Company. A dispute arose between the parties regarding the payment due for the orders placed.

Subsequently, the petitioner invoked the arbitration clause and unilaterally appointed the arbitrator. However, the award passed by the arbitrator was set aside on grounds of unilateral appointment. Consequently, the petitioner filed a petition before the High Court under Section 11(6) of the A&C Act, seeking the appointment of a sole arbitrator.

The respondent raised objections regarding the maintainability of the petition. Firstly, he argued that the petition was premature because the notice under Section 21 had not been given. Secondly, he contended that the jurisdiction of the Court under Section 11(6) could only be invoked after the parties had mutually failed to appoint the arbitrator and not otherwise.

The Court dismissed the respondent's contention that a fresh notice under Section 21 was obligatory. It ruled that, as the arbitration process had already been initiated and the proceedings had commenced, issuing a new notice was unnecessary.

The Court determined that the dispute between the parties remained unchanged, and the petitioner's request was for the appointment of a competent arbitrator, not a re-invocation of arbitration.

The Court ruled that there is no need for a Section 21 notice to recommence arbitration after the initial award is annulled under Section 34 of the A&C Act. It determined that in such circumstances, a fresh invocation notice is unnecessary as the opposing party is already aware of the dispute's existence. Consequently, the Court granted the petition and designated a sole arbitrator.