Court Holds Section 21 Notice Not Mandatory When Arbitration Referral Originates from Civil Court; Rejects Limitation Defense and Emphasizes Bona Fide Pursuit of Remedies
In a significant ruling delivered on September 1, 2026, the Madras High Court, presided over by Justice K. Kumaresh Babu, appointed former Chief Justice of the Calcutta High Court, Hon'ble Mr. Justice T.S. Sivagnanam, as the sole arbitrator in a dispute involving the Kennel Club of India. The case concerned the contentious appointment of the fourth respondent as an All Breed Judge by the Kennel Club, which the petitioner, Mr. C.S. Sanjay Reddy, challenged as lacking proper qualification.
The dispute initially took the form of a civil suit filed by the petitioner (O.S. No. 7961 of 2021), which was met by an application under Section 8 of the Arbitration and Conciliation Act, 1996, by the respondents, seeking to refer the parties to arbitration as per the arbitration clause in the Kennel Club's by-laws. The civil court accepted this view, rejecting the plaint and directing the matter to arbitration. The petitioner unsuccessfully challenged this order through an appeal and subsequently filed a second appeal, which was withdrawn upon filing the present arbitration petition.
The primary legal contentions centered on two issues: whether the petitioner's application under Section 11 of the Arbitration and Conciliation Act to appoint an arbitrator was barred by limitation, and whether the petitioner was required to issue a Section 21 notice before approaching the court for the appointment of an arbitrator.
Respondents contended that the petition was time-barred and defective for lack of a Section 21 notice, relying on recent Supreme Court judgments including Arif Azim Company Limited v. Aptech Limited (2024) 5 SCC 313 and Adavya Projects Private Limited v. Vishal Structurals Private Limited (2025) 9 SCC 686, which emphasize the necessity of Section 21 notice and limitation compliance.
However, the court, after careful consideration, rejected the limitation plea on the ground that the time spent by the petitioner in pursuing remedies in the civil courts, including appeals, was bona fide and thus excluded under Section 14 of the Limitation Act, 1963. The court cited authoritative precedents such as State of Goa v. Western Builders (2006) 6 SCC 239 and M.P. Steel Corporation v. Commissioner of Central Excise (2015) 7 SCC 58 to support this proposition.
On the issue of Section 21 notice, the court held that the requirement of issuing a Section 21 notice before filing a Section 11 petition is aimed at putting the other party on notice regarding the arbitration claims. However, where the dispute has already been referred to arbitration by a civil court under Section 8, the issuance of a Section 21 notice is not mandatory. This view was bolstered by a prior judgment of the Madras High Court in Globe Detective Agencies Pvt. Ltd. v. Gammon India Ltd., 2019 SCC Online Mad 39355.
The court noted that since the parties had already been ordered to arbitration by the civil court, and the petitioner had clearly indicated his intention to pursue arbitration by withdrawing the second appeal, the procedural necessity of Section 21 notice did not apply.
Accordingly, the court appointed Hon'ble Mr. Justice T.S. Sivagnanam as the sole arbitrator to adjudicate the disputes between the parties. The arbitrator was granted the discretion to fix his own fees and was directed to proceed with the arbitration reference expeditiously.
The petition was allowed without any order as to costs.
This ruling underscores the Madras High Court's pragmatic approach towards arbitration proceedings, emphasizing substantive justice over procedural technicalities, particularly when parties have already been directed towards arbitration by competent courts. It also clarifies the interplay between Sections 8, 11, and 21 of the Arbitration and Conciliation Act, offering guidance on limitation and notice requirements in arbitration appointment processes.
Bottom Line:
Arbitration - Application under Section 11 of the Arbitration and Conciliation Act for appointment of an Arbitrator is maintainable even without issuance of Section 21 notice when the dispute was already referred to arbitration by a Civil Court under Section 8 of the Act.
Statutory provision(s):
Arbitration and Conciliation Act, 1996 Sections 8, 11, 21; Limitation Act, 1963 Section 14
C.S. Sanjay Reddy v. Kennel Club of India, (Madras) : Law Finder Doc Id # 2972017
