Petition for Appointment of Arbitrator – Defective Section 21 Notice
Clause 20.2 of the Purchase Order incorporated “G.E. Power Terms of Purchase Rev-A-India” including Clause 20 for the dispute resolution through arbitration.
Failure to issue a Section 21 notice would not be fatal to a party in Arbitration if the claim is otherwise valid and the disputes arbitrable. Any restriction on the nature or content of claims, counterclaims, or set-offs in arbitration must be sourced solely from the express language of Section 23 and not from Section 21.
the object of Section 21 of the Act is only for the purpose of commencement of arbitral proceedings and Section 21 concerned only with determining the commencement of the dispute for the purpose of reckoning limitation. Issuance of a Section 21 notice may come to the aid of parties and the arbitrator in determining the limitation for the claim.
Considering this observation, the arguments of the Respondent that the notice under Section 21 is not in terms of the arbitration clause, particularly with regard to number of three arbitrators being suggested cannot defeat the notice. The notice under Section 21 invokes the arbitration clause, specifies the disputes, and seeks resolution through arbitration. The name of sole arbitrator is suggested. There is no objection to the notice under Section 21 to the name of sole arbitrator on the ground that the agreement specifies arbitral tribunal should be of three arbitrators. Names of three arbitrators are not suggested by the Respondent. The dispute persists, and the notice under Section 21 has not resulted in the appointment of the arbitral tribunal. On the failure of constitution of the arbitral tribunal, this Court gets jurisdiction to appoint an arbitrator under Section 11(6).
This Court finds that Clause 20.2, particularly the second part i.e. “The competent courts at the place of registered office of the Buyer shall have exclusive jurisdiction in relation to this Order and for implementation of the arbitral awards” would indicate that the jurisdiction to entertain the Section 11 application of this Court, as the Buyer office is admittedly within the jurisdiction of this Court. The seat of arbitration is within the jurisdiction of this Court. The Applicant is not required to approach the DIAC for appointment of arbitrator in the first instance, before issuance of notice under Section 21. In the instant case, the Respondent party has failed to act in terms of Section 11(6)(a), as they have not responded for appointment of arbitrator by DIAC in response to notice under Section 21.
Judgment dated of the High Court of Bombay (OS) in Arbitration Application (L) No.15413 of 2026 of Unistar Metals Private Limited Vs. GE Power Limited
