Disposed¶40

Young Mens Christian Association v. M/S M R P Home Inn (P) Ltd.

Karnataka HC17 Jan 2025CMP/236/2024

Case brief

AI extract

What is this about?

Section 11(6) Arbitration and Conciliation Act 1996; Section 21 notice as precondition to invoking arbitration; premature petition; appointment of sole arbitrator; Rule 20 Scheme for Appointment of Arbitrator Karnataka High Court; D.P. Construction vs. Vishvaraj Environment Pvt. Ltd.; YMCA vs. M.R.P. Home Inn (P) Ltd.; agreement dated 30.09.2004; O.S. No. 25533/2016; liberty to re-invoke arbitration.

What did the court decide?

Petition disposed of as premature, with liberty reserved to the petitioner to invoke Section 21 of the 1996 Act by notice and nomination of an arbitrator, and to approach the Court again if the respondent fails to respond or refuses. ¶40

Young Mens Christian Association Vs M/S M R P Home Inn (P) Ltd. — Arbitration | Karnataka HC (2025)

What the court decided

AI extract

Outcome

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Issue for consideration

Whether the Civil Miscellaneous Petition under Section 11(6) of the 1996 Act is maintainable, or is premature, where the petitioner did not invoke arbitration by issuing a notice under Section 21 of the 1996 Act (invoking the arbitration clause and nominating an arbitrator) before approaching the Court.

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Court's answer

A notice under Section 21 of the 1996 Act, formally invoking the arbitration clause contained in the agreement and nominating an arbitrator, is a mandatory step and necessary precondition before approaching the Court under Section 11(6); the petitioner was required to issue such notice so as to give the respondent an opportunity to agree with the nomination or propose an alternative.

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Ratio / Principle

Having failed to comply with the requirement of issuing a notice under Section 21 of the 1996 Act, the petitioner approached the Court prematurely, and the Civil Miscellaneous Petition under Section 11(6) is premature and unsustainable.

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Key takeaways

Liberty is reserved to the petitioner to invoke Section 21 of the 1996 Act by issuing a notice to the respondent and nominating an arbitrator; if the respondent fails to respond, contest, or refuses the invocation, the petitioner may approach the Court again under the relevant provisions of the 1996 Act.ratio¶36

Detailed headnote1 paragraphs

Arbitration and Conciliation Act, 1996 — Section 11(6) petition read with Rule 20 of the Scheme for Appointment of Arbitrator by Karnataka High Court — appointment of sole arbitrator concerning disputes under agreement dated 30.09.2004 — maintainability: respondent objected that petitioner never invoked arbitration in accordance with Section 21; a mere legal notice and the Civil Court's observations under Section 8 in O.S. No. 25533/2016 do not amount to invocation. Relying on D.P. Construction vs. Vishvaraj Environment Pvt. Ltd. (Bombay High Court, Nagpur Bench, Misc. Civil Application (Arbn.) No.31/2021), the Court held that issuance of a Section 21 notice expressly invoking the arbitration clause and nominating an arbitrator is a necessary precondition before approaching the Court under Section 11(6). The petition, filed without such notice, was held premature and unsustainable, and was disposed of as premature, with liberty reserved to the petitioner to invoke Section 21 and, upon refusal or non-response by the respondent, to approach the Court afresh.

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1 - NC: 2025:KHC:1952 CMP No. 236 of 2024

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IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 17^TH DAY OF JANUARY, 2025

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BEFORE

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THE HON'BLE MR JUSTICE SACHIN SHANKAR MAGADUM

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CIVIL MISC. PETITION NO.236 OF 2024

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BETWEEN:

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YOUNG MENS CHRISTIAN ASSOCIATION A SOCIETY REGISTERED UNDER THE PROVISIONS OF THE SOCIETIES REGISTRATION ACT HAVING ITS OFFICE AT NRUPATHUNGA ROAD BENGALURU - 560001 REPRESENTED BY ITS GENERAL SECRETARY DR.DANIEL RATHNAKAR J

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…PETITIONER

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(BY SRI. SUKUMARAN G, ADVOCATE)

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AND:

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Digitally signed by AL BHAGYA M/S M.R.P. HOME INN (P) LTD., Location: HIGH COURT OF A COMPANY INCORPORATED UNDER THE KARNATKA COMPANIES ACT, 1956, HAVING ITS REGISTERED OFFICE AT NO.155/A, 9^TH MAIN R M V EXTENSION BENGALURU - 560 080 REPRESENTED BY ITS DIRECTOR MR.V.RAMPRASAD

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…RESPONDENT

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(BY SRI.NANDISH PATIL, ADVOCATE)

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NC: 2025:KHC:1952 CMP No. 236 of 2024

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THIS CIVIL MISC. PETITION IS FIILED UNDER SECTION 11(6) OF THE ARBITRATION AND CONCILIATION ACT, 1996 READ WITH RULE 20 OF SCHEME FOR APPOINTMENT ARBITRATOR BY KARNATAKA HIGH COURT BE PLEASED IN THE INTEREST OF JUSTICE AND EQUITY (A) TO CONSTITUTE THE ARBITRAL TRIBUNAL BY APPOINTMENT OF A SUITABLE PERSON AS THE SOLE ARBITRATOR UNDER SECTION 11(6) OF THE ARBITRATION AND CONCILIATION ACT 1996 READ WITH RULE 20 OF SCHEME FOR APPOINTMENT ARBITRATOR BY KARNATAKA HIGH COURT FOR THE RESOLUTION OF THE DISPUTES, DIFFERNCES, AND CLAIMS THAT HAVE ARISEN BETWEEN THE PARTIES IN CONNECTION WITH THE SAID AGREEMENT DATED 30.09.2004 (ANNEXURE-A, HEREIN) AND ETC.

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THIS PETITION, COMING ON FOR ADMISSION, THIS DAY, ORDER WAS MADE THEREIN AS UNDER:

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CORAM: HON'BLE MR JUSTICE SACHIN SHANKAR MAGADUM

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ORAL ORDER

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This captioned Civil Miscellaneous Petition is filed under Section 11(6) of the Arbitration and Conciliation Act, 1996 (for short '1996 Act') requesting this Court to appoint a sole Arbitrator .

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NC: 2025:KHC:1952 CMP No. 236 of 2024

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The respondent, on receipt of notice, has

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tendered appearance and has engaged a lawyer and statement of objection is filed.

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The respondent, in their statement of objection, has raised a preliminary issue concerning the maintainability of the present petition. It is contended by the respondent that the petitioner has failed to adhere to the procedural requirements mandated under the Arbitration and Conciliation Act, 1996 ("1996 Act"). Specifically, the petitioner has not invoked arbitration proceedings in accordance with Section 21 of the 1996 Act. The respondent has asserted that the mere issuance of a legal notice, followed by observations made by the Civil Court under Section 8 of the 1996 Act in proceedings bearing O.S. No. 25533/2016, does not fulfill the statutory requirement for invocation of arbitration as envisaged under Section 21 of the 1996 Act.

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Upon a detailed examination of the records of the case, this Court has considered the legal position,

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NC: 2025:KHC:1952 CMP No. 236 of 2024

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particularly in light of the judgment rendered by the Hon'ble Bombay High Court (Nagpur Bench) in the case

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of D.P. Construction vs. Vishvaraj Environment Pvt. Ltd. , Misc. Civil Application (Arbn.) No.31/2021 . In the said judgment, the Bombay High Court has categorically held that the issuance of a notice under Section 21 of the 1996 Act, explicitly invoking the arbitration clause and nominating an arbitrator, is a necessary precondition before approaching the Court under Section 11(6) of the 1996 Act.

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In the present case, it is evident that the petitioner has approached this Court prematurely without first issuing a notice under Section 21 of the 1996 Act. The petitioner was required to formally invoke the arbitration clause contained in the agreement by issuing a notice to the respondent, nominating an arbitrator, and thereby providing an opportunity to the respondent to either agree with the nomination or propose an alternative. This mandatory step, which forms the cornerstone of initiating

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NC: 2025:KHC:1952 CMP No. 236 of 2024

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arbitration proceedings, has not been complied with in the current case.

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In light of the above, this Court is constrained to hold that the present Civil Miscellaneous Petition filed under Section 11(6) of the 1996 Act is premature and unsustainable. The petitioner, having failed to comply with the procedural requirement of issuing a notice under Section 21 of the 1996 Act, cannot proceed further under this petition.

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Nevertheless, this Court deems it appropriate to reserve liberty to the petitioner to invoke Section 21 of the 1996 Act by duly issuing a notice to the respondent and nominating an arbitrator. Should the respondent fail to respond, contest, or refuse the invocation, the petitioner shall have the liberty to approach this Court once again under the relevant provisions of the 1996 Act to seek appropriate relief.

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NC: 2025:KHC:1952 CMP No. 236 of 2024

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Accordingly, this Civil Miscellaneous Petition is

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disposed of as being premature, with the above liberty

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reserved in favor of the petitioner.

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SD/-

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