Fresh Section 21 Notice Not Mandatory for Recommencing Arbitration After an Award Is Set Aside

The Petitioner sought the appointment of an arbitrator following a dispute regarding an "Agreement to Sell" for real estate units in Sohna, Haryana

Initially, the Petitioner unilaterally appointed an arbitrator who passed an award on 13.02.2025; however, that award was set aside on 05.01.2026 by a Commercial Court because unilateral appointments violate settled law

The Petitioner then filed the present petition under Section 11(6) of the Arbitration and Conciliation Act, 1996 ("A Act") to recommence adjudication

The Respondents raised a preliminary objection, arguing that the petition is not maintainable because the Petitioner failed to issue a fresh notice under Section 21 of the A Act after the previous award was set aside

1. Whether a fresh notice under Section 21 of the A Act is mandatory for the recommencement of arbitration after a previous arbitral award has been set aside by a court.

The court applied Section 21 of the A Act, which defines the commencement of arbitral proceedings

Section 43(4), which provides for the exclusion of time spent in previous arbitral/court proceedings for limitation purposes when an award is set aside

It relied on Adavya Projects Pvt. Ltd. v. M/s Vishal Structurals Pvt. Ltd., which held that Section 21 notice is a mandatory precondition for Section 11 applications primarily to fix the date of commencement for calculating limitation

The court also referenced M/s Re Sustainability Healthcare Solutions Limited v. Bruhat Bengaluru Mahanagara Palike, which established that once an award is set aside and disputes revived, a fresh Section 21 notice is a procedural requirement that does not act as a jurisdictional bar

The Court reasoned that the primary purpose of a Section 21 notice is to intimate the opposing party of the dispute and to "freeze" the limitation period

In this case, a valid Section 21 notice had already been issued on 27.02.2024, and the arbitration had effectively commenced

The Court rejected the Respondents' interpretation of Section 43(4), clarifying that while that section allows for the exclusion of time for "commencement of proceedings" (which could include suits or new arbitrations), it does not mandate a re-initiation of the entire process via a second notice if the arbitration is simply being resumed with a new arbitrator

The Court emphasized that since the Respondents were already fully aware of the disputes and the mandate of Section 21 had been achieved at the first instance, requiring a fresh notice would be redundant and would not serve the statutory objective

The preliminary objection was overruled. The Court allowed the petition and appointed Mr. Kapil Sankhla as the Sole Arbitrator to adjudicate the disputes under the aegis of the Delhi International Arbitration Centre (DIAC)