Getting the tribunal in place: the Section 21 notice and appointment under Section 11

An arbitration clause is only a promise until a tribunal actually exists to decide the dispute. The Arbitration and Conciliation Act, 1996 supplies the machinery for that first step: a request under Section 21 that commences the proceedings, the agreed appointment procedure that the parties must first exhaust, and, where a party defaults, an application under Section 11 by which the court constitutes the tribunal. This article traces that machinery, with the practice of the Delhi High Court in view.

The starting point: an arbitration agreement in writing

Everything begins with Section 7. An arbitration agreement is an agreement to submit to arbitration disputes arising out of a defined legal relationship. It may be a clause in a contract or a separate agreement, but it must be in writing — a requirement satisfied by a signed document, by an exchange of letters or other communications providing a record of the agreement, or by an exchange of pleadings in which the agreement is alleged and not denied. Before any notice issues, the clause deserves a careful reading: who appoints, how many arbitrators, and within what time.

Commencement: the notice under Section 21

Section 21 fixes the moment of commencement: unless otherwise agreed, arbitral proceedings in respect of a dispute commence on the date the request to refer that dispute to arbitration is received by the respondent. The notice invoking arbitration is therefore not a formality. It stops the limitation clock for the claims it raises, crystallises the disputes that will travel to the tribunal, and triggers the appointment mechanism, since the thirty-day period runs from its receipt.

A proper notice identifies the contract and the clause invoked, sets out the disputes with reasonable particularity, nominates an arbitrator where the clause so requires, and calls upon the respondent to act under the agreed procedure within thirty days — by concurring in a sole arbitrator or naming its own nominee. A vague notice invites objections later; a well-drawn one lays the foundation for every step that follows.

Party autonomy first — and where it breaks down

The Act places the agreed procedure first. If the clause provides for a sole arbitrator, the parties are expected to concur in an appointment; if it provides for a three-member tribunal, each side appoints its nominee and the two nominees appoint the presiding arbitrator. The machinery of the court is reached only on failure — where a party does not act within thirty days of receipt of the request, where the two arbitrators cannot agree on the third within thirty days, or where a person entrusted with a function under the agreed procedure fails to perform it. At that point Section 11 opens.

The Section 11 application and the confined examination

For arbitrations other than international commercial arbitrations, the application lies to the High Court; in Delhi, such petitions are listed on the arbitration roster of the Delhi High Court and are commonly styled as arbitration petitions. In an international commercial arbitration, the application lies to the Supreme Court. The petition annexes the arbitration agreement, the Section 21 notice with proof of service, and the correspondence showing the default in the agreed procedure.

The scope of the enquiry is deliberately narrow. Under Section 11(6A), inserted by the 2015 amendment, the court confines itself to the examination of the existence of the arbitration agreement. Arguability of the claims, substantive objections of limitation, and the merits are for the tribunal, consistently with Section 5, which permits judicial intervention only where the Part itself provides for it. The appointment stage is a gateway, not a trial: the court satisfies itself that an arbitration agreement exists and sends the dispute where the parties agreed it should go.

Independence of the arbitrator: disclosure and ineligibility

The Act builds neutrality into the appointment itself. Under Section 12(1), a person approached for appointment must disclose in writing, in the form set out in the Sixth Schedule, any circumstances likely to give rise to justifiable doubts as to independence or impartiality, and any circumstances affecting the ability to devote sufficient time to the arbitration.

Section 12(5) goes further. A person whose relationship with the parties, the counsel or the subject matter of the dispute falls within any category of the Seventh Schedule is ineligible to be appointed at all — an employee or consultant of a party being the clearest instance. The bar cannot be waived in advance; only an express agreement in writing, made after the dispute has arisen, can save such an appointment. The consequence for standard-form and government contracts is significant: a clause letting one interested party, or its officer, choose the arbitrator is treated as compromised, and the court, when moved under Section 11, makes an independent appointment rather than enforcing the tainted mechanism.

Fees, institutions and the discipline of time

The Fourth Schedule provides a model framework of fees graded by the sum in dispute, and where the court makes the appointment it may fix or regulate the fees of the tribunal. The Act also contemplates the court designating arbitral institutions to make appointments, and in Delhi institutional arbitration — for example, through the Delhi International Arbitration Centre attached to the High Court — is a common and workable route with its own rules and fee schedules.

Time discipline runs through both stages. Section 11(13) enjoins the court to dispose of the application as expeditiously as possible, with an endeavour to decide it within sixty days from service of notice on the opposite party. Once constituted, the tribunal has its own clock under Section 29A: the award within twelve months from completion of pleadings, extendable by six months by consent of the parties, and thereafter only by the court.

A closing word

The appointment stage rewards precision more than argument. A clean arbitration clause, a complete Section 21 notice served and proved, and a petition confined to what Section 11 requires will ordinarily place a tribunal in position without detours. The design of the Act is that the court opens the door and the tribunal decides the dispute; parties who work with that design reach the merits soonest.