Kiran Raj

The Supreme Court of India Division Bench of Justice Dipankar Datta and Justice Augustine George Masih set aside a Karnataka High Court order that treated arbitration as commencing only from the appointment of an arbitrator and restored an ad-interim injunction obtained by a hotel franchise operator against a partner of the hotel-owning firm alleged to have interfered with hotel operations. The Court held that arbitral proceedings begin when the respondent receives a notice invoking the arbitration clause, provided the notice identifies the dispute intended for reference. Once such notice is received, commencement is complete for all legal purposes, including limitation, the maintainability of an arbitrator-appointment request, and the effectiveness of pre-arbitration interim measures. The High Court was asked to decide the pending arbitrator-appointment request expeditiously.

The dispute arose out of a franchise arrangement relating to the operation of a hotel property. The appellant, a company engaged in operating hotels and providing hospitality services, entered into a franchise agreement in 2019 with a partnership firm that owned and operated a hotel. Under the agreement, the appellant was to provide brand support, technical know-how, and operational expertise, while the hotel was to be managed in accordance with the agreed standards.

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Subsequently, disputes emerged among the partners of the hotel-owning firm, leading to a settlement arrangement regulating internal management responsibilities. During this period, it was alleged that one of the partners began interfering with hotel operations, including staff interactions and booking processes, contrary to the franchise arrangement.

The appellant approached the civil court under Section 9 of the Arbitration and Conciliation Act, 1996, seeking interim injunctions to restrain interference with hotel operations. An ad-interim injunction was granted. However, the trial court later vacated the interim protection on the ground that arbitral proceedings had not been commenced within the prescribed period. The High Court affirmed this view, holding that arbitration had not commenced within ninety days as required, leading to automatic vacation of interim relief. This led to the present appeal before the Supreme Court.

The Supreme Court examined the statutory framework governing interim measures and commencement of arbitral proceedings under the Arbitration and Conciliation Act, 1996. The Court noted that Section 21 of the Act defines the commencement of arbitral proceedings and observed that “the arbitral proceedings commence on the date on which a request for that dispute to be referred to arbitration is received by the respondent.”

Referring to settled precedent, the Court recorded that “the commencement of arbitral proceedings is a statutory event defined exclusively under Section 21 of the Act” and that judicial proceedings under Sections 9 or 11 do not determine such commencement. It further observed that “no judicial application i.e. whether under Section 9 or Section 11 petition, constitutes commencement.”

Addressing the High Court’s reasoning, the Supreme Court stated that “the High Court proceeded on a misconception regarding the statutory scheme” by treating the filing of a Section 11 petition as the date of commencement. The Court clarified that “the Legislature has consciously delinked the commencement of arbitral proceedings from any judicial proceedings.”

On the interpretation of Rule 9(4) of the 2001 Rules, the Court observed that although the rule uses the expression “initiated,” it “cannot be interpreted in isolation or in a manner divorced from the statutory context.” It was recorded that “for the purposes of Rule 9(4), the expression ‘initiated’ has necessarily to be read as ‘commenced’ within the meaning of Section 21 of the Act.”

Applying these principles to the facts, the Court noted that “the notice invoking arbitration was served well within the period of ninety days” and that receipt of the notice by the respondent constituted valid commencement of arbitral proceedings. The Court therefore held that “the arbitral proceedings have commenced well within the statutory time frame” and that the automatic vacation of interim relief was unsustainable.

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The Supreme Court directed that “the Impugned Judgment of the High Court is set aside for being unsustainable in law. The Order dated 01.10.2024 of the Trial Court vacating the ad-interim injunction also stands set aside, restoring the earlier Order dated 17.02.2024.”

“The High Court is requested to expeditiously decide the Section 11 petition filed by the Appellant for appointment of the arbitrator on its own merits and in accordance with law.” It clarified that “nothing stated in this judgment will influence or prejudice the arbitral process in any manner.”

The appeal was allowed, and “the Contempt Petition (C) No.189 of 2025 … is disposed of at this stage. There shall be no order as to costs,” and that pending applications stood disposed of.

Advocates Representing the Parties

For the Appellant: Mr. Pranjal Kishore , AOR
For the Respondents: M/S. Ahmadi Law Offices, AOR Mr. Vivek Jain, AOR Ms. Suchitra Kumbhat, Adv. Mr. Sadiq Noor, Adv. Ms. Benila B M, Adv. Mr. Benila B M, Adv. Mr. Rohit H Nair, Adv. Ms. Baani Khanna, AOR Mr. Robin Singh, Adv. Mr. Kapil Balwani, Adv. Mr. Shrikant Thokchom, Adv. Mr. Atul Shankar Vinod, AOR

Case Title: Regenta Hotels Private Limited v. M/s Hotel Grand Centre Point and Others
Neutral Citation: 2026 INSC 32
Case Number: Civil Appeal No. … of 2026 @ SLP (Civil) No. 30212 of 2024
Bench: Justice Dipankar Datta, Justice Augustine George Masih