Direct Reference to Arbitration Permissible Upon Mutual Consent Waiving Pre-Arbitral Procedures and Section 21 Notice

The Petitioner, Viva Infraventure, entered into an Engineering Procurement and Construction (EPC) Agreement with the Respondent (NHAI) on February 9, 2022, for a road connectivity project in Karnataka.

NHAI issued a "Notice of Intention to Terminate" on May 4, 2026, under Clause 23.1(i) of the Agreement.

The Petitioner filed the present petition under Section 9 of the Arbitration and Conciliation Act, 1996, seeking interim reliefs, including restraining the termination of the contract, preventing the encashment of Performance Bank Guarantees, and seeking a joint physical survey of the site to ascertain the "Right of Way".

During the hearing, both parties expressed mutual consent to refer the dispute to arbitration, bypassing pre-arbitral steps.

1. Whether the parties can waive mandatory pre-arbitral dispute resolution mechanisms and statutory requirements under Sections 21 and 11 of the Act to proceed directly to an Arbitral Tribunal by mutual consent.

2. What interim directions should be passed regarding the constitution of the Arbitral Tribunal while disposing of the Section 9 petition.

Section 9 of the Arbitration and Conciliation Act, 1996, regarding interim measures by the Court.

Article 26 of the EPC Agreement, which mandates a tiered dispute resolution process involving mediation by an Authority Engineer, a Dispute Resolution Board (DRB), and Conciliation before resorting to Arbitration under Clause 26.3.

The principle of party autonomy, allowing the waiver of the Section 21 notice (invocation) and the Section 11 petition (appointment) when parties are ad idem on the constitution of the tribunal.

The court noted that while the contract prescribed a rigorous multi-stage pre-arbitral process (Mediation, DRB, Conciliation), the parties were ad idem (in agreement) to waive these requirements in favor of immediate arbitration to avoid undue delay.

Since both parties consented to the reference, the court exercised its discretion to waive the formal legal requirements of a Section 21 notice and a subsequent Section 11 petition for the constitution of the tribunal.

The court did not adjudicate on the merits of the interim reliefs sought (e.g., stay on termination or bank guarantee encashment) but instead facilitated a timeline for the appointment of a three-member tribunal to resolve all such contentions.

It ordered that each party nominate an arbitrator within one week, and the two nominated arbitrators appoint a Presiding Arbitrator within ten days thereafter. The statutory requirements under Section 21 and Section 11 of the Act were expressly waived. All rights and contentions of the parties were left open to be decided by the newly constituted Arbitral Tribunal on merits.