Beyond Procedural Rigidities: When Missing or Imperfect Section 21 Notices Do Not Defeat Arbitration.
Introduction : The notice of invocation under Section 21 of the Arbitration and Conciliation Act, 1996 ("Act") has always been a tricky one in the arena of Indian arbitration law as it falls somewhere between the strictures of procedure and the consent of the parties. The Section 21 notice is actually a formal step under the statute which will begin the formal proceedings of the arbitration, in particular the suspension of the Limitation Act 1963-time bar. Commercial litigants often try to take advantage of procedural flaws in, or the absence of, a formal Section 21 notice.
These are also common tactics against the inherent jurisdiction of the arbitral tribunals under Section 16, and to try to have arbitral awards overturned under Section 34. The article examines the legal implications of not issuing an invocation notice, giving an “on time” notice, and creating an “imperfect notice”. It recounts the evolution of the judicial attitude in India from hyper-technical formalistic attitude to more pragmatic “substance over form” attitude. This analysis highlights how, in light of statutory requirements and judicial precedent, including recent Supreme Court decisions,minor notice deficiencies will not be enough to prevent the existence of an arbitrable claim when there is no doubt the claim falls within the scope of the parties' agreement or is subject-matter jurisdiction.
Legal Provisions
A&C Act., Section 21: The arbitral proceedings in regard to a specific dispute shall commence on the date of receipt of the request for referring the dispute to arbitration by the respondent.
Section 23, A&C Act: Once the arbitral tribunal is constituted, the claimant shall provide the arbitrator with the facts, points at issue and relief sought and the respondent shall provide the arbitrator with a defense and any counterclaim or set-off.
Section 43 of the A&C Act: applies the Limitation Act, 1963 to arbitrations as it applies to court proceedings, and thus the Section 21 date is relevant for limitation, rather than for jurisdiction.
A&C Act, Section 34: grounds for setting aside an arbitral award on a matter not contemplated by or within the scope of the submission to arbitration.
Section 28(b) of the Indian Contract Act, 1872: If the contract requires that the arbitration be invoked within a certain time period, such a contract will be unenforceable.
Legal Analysis
Section 21 is Procedural, Not Jurisdictional : The Supreme Court's reasoning is based on the literal meaning and purpose of Section 21. The provision is not designed to restrict the powers of the arbitral tribunal to settle a dispute; it only lays down a time limit for the limitation period. When a dispute is already subject to an existing arbitration clause, however, the courts have not found that the lack of notice, or a notice that does not include individual claims later brought, are an impediment to arbitrability. It is this distinction between a procedural precondition and a jurisdictional threshold that is the analytical nexus of the recent line of authority, and it is this distinction that has prompted courts to ask whether the dispute in question is otherwise arbitrable and not whether the notice was ‘technically perfect’.
Substance Over Form : Another common theme is that arbitral tribunals, when properly constituted, do not have to be bound by the four corners of the initiating notice. Once the parties have entered into contact with the merits following the invocation of arbitration under a broadly drafted arbitration clause, the entire dispute is opened to the tribunal. Courts have determined that after the parties have invoked arbitration under a broadly drafted arbitration clause, claims that were not contained in the claimant's prior statement of defense are permitted. A notice defect, an incomplete description of claims, an omitted dispute head, or even a failure to provide notice is not a fatal irregularity, but rather a curable irregularity, in circumstances where the claim is otherwise arbitrable and within limitation.
Waiver by Conduct and the Clean Hands Principle : A party who invokes arbitration of a dispute in a contract without specifying a time limit or who seeks to set aside the decision of an adjudicator in its entirety may not raise a notice defect by the other party as a basis for limiting the powers of the arbitrator. This is a conduct-based waiver in addition to the substantive reading of Section 21 as non-jurisdictional.
The principle and its boundaries : There are no hard and fast rules to the principle of the substance over form. It is useful when the arbitration clause is drafted in an expansive manner and the parties, through their conduct, have referred the entire dispute to the arbitration tribunal. It is not an excuse for a time-barred claim, a claim not subject to the arbitration agreement, or a claim that is not subject to arbitration at all. A notice defect, then, does not take the inquiry off the substantive track of arbitrability, limitation and scope of consent, but merely places it there.
Case laws
M/S Bhagheeratha Engineering Ltd. v. State of Kerala
The Supreme Court (Division Bench of Justice J.B. Pardiwala and Justice K.V. Viswanathan) in the case clarified that the objective of Section 21 is only to establish the date when arbitral proceedings commenced and the issue of issuing a separate Section 21 notice for the three of the four disputes did not vitiate the jurisdiction of the tribunal over the other three disputes. The Court noted that the conduct of the State itself had opened the entire dispute as it had referred the matter to arbitration outside the agreed arbitration period and had sought to set aside the entire arbitral award, and quashed the arbitral award in favor of the appellant.
ASF Buildtech Pvt. Ltd. v. Shapoorji Pallonji & Co. Pvt. Ltd.
In Section 21, the Supreme Court gave the meaning of the term 'particular dispute' and clarified the claimant is not restricted to a prescribed list of heads of claim. The Court ruled that after a tribunal is formed under a valid arbitration agreement, the parties may file all claims and counterclaims within the scope of the arbitration agreement in formal pleadings in accordance with Section 23.
State of Goa v. Praveen Enterprises
The Court in Bhagheeratha confirmed the earlier decision of the Supreme Court which had held that claims which are not expressly mentioned in a Section 21 notice are not therefore excluded from consideration of the tribunal so long as they fall under the scope of the arbitration agreement.
Adavya Projects Pvt. Ltd. v. Vishal Structurals Pvt. Ltd.
The court recognized that the agreement between the parties did not constitute a contract. In arbitral proceedings, both the arbitral parties are subject to consent and participation, so that a respondent is allowed to contend counterclaims without giving a Section 21 notice first.
Indian Oil Corporation Ltd. v. Amritsar Gas Service
It was based on the general rule that, once arbitration is duly commenced, the arbitrator has the authority to rule on any issue that is covered by the arbitration agreement, not just those contained in the initial reference.
M.K. Shah Engineers & Contractors vs. State of M.P.
The Court in Bhagheeratha applied the principle that 'no person shall be allowed to make use of his own wrong', and found that the same principle was applicable in the M.K. Shah case and that the notice defect could not be relied on.
Practical implications
The judicial recognition of a substance-over-form approach to Section 21 notices has major practical consequences for corporations and lawyers:
1. The ability of corporate parties to easily challenge arbitration awards by pointing to minor clerical errors, vague claims descriptions, or partial claims in pre-arbitration correspondence is reduced.
2. An omitted claim does not deprive the tribunal of its inherent jurisdiction, but it clearly affects the calculation of limitation. Claims which are first raised in a Section 23 Statement of Claim will be subject to limitation from the date of that Statement of Claim, not the date of the first Section 21 notice.
3. Parties to multi-tiered dispute resolution processes must be consistent. A challenge on the merits while seeking to preserve technical notice objections will normally be considered a waiver of the objections under Section 4 of the Act.
Section 21 Notice Drafting & Service Best Practices
Contractual Alignment and Precise Citations
Offer explicit clause citations, i.e., specifically cite the date of the master agreement, the arbitration clause number, and quote the exact arbitration clause text.
Strict adherence to contract provisions: If the contract requires a particular mode or address for notices, follow them accordingly. The deviation, though unlikely to be fatal, raises unnecessary objections.
Comprehensive Scope of Claims
Narrow Claim Enumerations: Avoid narrow claim enumerations. Include reservation clauses (e.g., "The claims set out herein are illustrative and not limiting the Claimant's right to amend and/or expand claims in the Statement of Claim under Section 23").
Consider using a broadly drafted arbitration clause in a single, comprehensive notice in multiple related disputes to minimize the risk of jurisdictional disputes as opposed to issuing separate arbitration notices for each dispute.
Where a dispute has developed or grown since the first notice was issued, consider issuing a supplementary or clarificatory notice or specifically reserving the right to amend claims after the constitution of the tribunal.
Communicate Appointment Request and Pre-conditions
Be clear about the appointment process, including specific timeframes and criteria for the proposed arbitrators, as per the contract.
Make it clear that every contractual pre-condition (e.g., 30-day negotiation windows, escalation steps to the executive) has been met or explicitly waived by previous actions.
Redundant Service and Verifiable Delivery
Send the notice at the address provided for notices in the contract, and also by a second reliable method (registered post with acknowledgment due, courier with tracking, and email) to provide redundant proof of receipt.
Send dispatch notices by a trackable method (including Registered Post AD, recognized courier services and official corporate email addresses listed in the notices clause of the agreement) to create a clear date of receipt.
Keep proof of dispatch and delivery, such as postal receipts, courier tracking, and read-receipts/confirmations for email service.
Timeline Management and Post-Service Documentation
Schedule response and limitation deadlines as soon as they are dispatched. If no response, follow up in writing to create a written record of the respondent's behavior.
Conclusion
In Bhagheeratha Engineering Ltd. v. State of Kerala, the Supreme Court has reaffirmed the doctrine of 'substance over form' in Section 21 of the A&C Act, which has been interpreted as a limitation-fixing provision rather than a jurisdictional prerequisite to arbitration. A valid and broad arbitration clause and the parties' conduct in submitting the entire dispute to adjudication will not be defeated by a missing or defective commencement notice. This does not take away from the importance of careful notice drafting and service; rather, it is a tool for clarity and limitation management, not a jurisdictional trapdoor. In the future, it will be prudent for the parties to employ clear and well-served notices, while keeping a close watch on the opposing party's actions and maintaining proper records, as the substance of the notice remains important, but so does its form.
Drafting & Serving Section 21 Notices Best Practices
Contractual Alignment and Precise Citations : Offer explicit clause citations, i.e., specifically cite the date of the master agreement, the arbitration clause number, and quote the exact arbitration clause text. Whether contract specifies a mode/address for notices: If the contract specifies a particular mode/address for notices, follow them. The deviation, although not a death sentence, brings up uncalled for objections.
Comprehensive Scope of Claims : Narrow Claim Enumerations: Avoid narrow claim enumerations. Add reservation clauses (for example "the claims set out herein are illustrative and do not limit the Claimant's right to amend and/or expand the claims as set out in the Statement of Claim under Section 23").
Consider using a broadly drafted arbitration clause in a single, comprehensive notice in multiple related disputes to minimize the risk of jurisdictional disputes as opposed to issuing separate arbitration notices for each dispute.
If there has been a dispute that has arisen or escalated since the first notice was issued, consider issuing a supplementary notice or clarificatory notice or specifically reserving the right to amend claims after the formation of the tribunal.
Communicate Appointment Request and Pre-conditions : Make sure that the process and details of the appointment of the proposed arbitrators are clear, including the time periods and the criteria for the appointment as outlined in the contract. Be sure to explain that all of the contractual pre-conditions (e.g., 30 day negotiation windows, escalation steps to the executive) have been fulfilled, or that they have been forfeited as a result of previous actions.
Redundant Service and Verifiable Delivery : Send notice to the address specified in the contract for notices and by a second reliable means (registered post with acknowledgment due, or by a courier or by email) to ensure that notice is given to more than one person. Ensure that dispatch notices are sent using a trackable means (such as Registered Post AD, recognised courier services and official company email addresses listed in the notices clause of the agreement) to establish a clear date of receipt. Maintain evidence of dispatch and delivery, including postal receipts, courier tracking and read-receipts/confirmations for email service.
Customer Service and Support : Set deadlines for responding and limiting as they are sent. If no response, follow up in writing to create a written record of the respondent's behavior.
Notice Template Guide : The following is a model template for invoking arbitration under Section 21 of the Act, with the right to expand claims during formal pleadings:
Legal Notice Invoking Arbitration under Section 21 of the Arbitration & Conciliation Act, 1996
BY REGISTERED POST A.D. / COURIER / EMAIL
Date: [Enter Date]
TO:
[Name of Respondent / Recipient]
[Designation / Company Name]
[Registered Office Address]
[Email Address]
FROM:
[Name of Advocate / Law Firm]
Support the Claimant / Client's case(s)
[Office Address]
Contact Number & Email Address
SUBJECT: NOTICE FOR INVOCATION OF ARBITRATION UNDER SECTION 21 OF THE ARBITRATION AND CONCILIATION ACT, 1996 IN RESPECT OF DISPUTES ARISING OUT OF THE [NAME OF AGREEMENT] DATED [specified date].
Sir / Madam,
WHEREAS, our Client, [Name of Claimant], with its office/residence at [Insert Residence] (hereinafter referred to as "Our Client"), has issued this Legal Notice to you in accordance with and pursuant to Section 21 of the Arbitration and Conciliation Act, 1996:
Background And Contractual Relationship
That Our Client and you entered into an agreement titled “[Name of Contract/Agreement]” dated [[Date]] (hereinafter referred to as the “Agreement”).
Under the terms of the Agreement, Our Client was to [succinctly state Claimant’s obligations/role], and you were to [succinctly state Respondent’s obligations/role].
Arbitration Agreement
The dispute resolution mechanism agreed to by the parties is outlined in Clause [Insert Clause Number] of the Agreement dated [Specified Date] which reads verbatim as under:
“[Insert verbatim the arbitration clause from the agreement]”
Statement Of Disputes And Breaches
That disputes and differences have occurred between Our Client and you as a result of your failure, neglect and breach in fulfilling your contractual obligations under the Agreement.
That, in particular, you have violated the following:
[Detail Breach 2: e.g., Non-payment of invoices against work completed]
[Detail Breach 2: e.g., Failure to meet contractual timelines/milestones]
[Detail Breach 3: e.g., Unlawful/unjustified termination of the Agreement]
Our client has suffered major financial loss and damage as a result of the above breaches. At this time, the monetary claims of Our Client against you are as follows:
Outstanding Dues/Invoices: INR [Insert Amount]/-
Interest on INR [Insert Amount]/- at [Rate]% p.a. from [Date] to [Date]
Damages for Breach of Contract & Losses: INR [Insert Amount]/-
Total Claim Amount: INR [Insert Total Amount]/-
The claims set out above are merely illustrative and do not limit Our Client's ability to amend, alter, supplement, refine or add additional claims/counterclaims in its official Statement of Claim to be filed before the Arbitral Tribunal pursuant to Section 23 of the Act.
Invocation Of Arbitration & Nomination Of Arbitrator
Our Client hereby formally invokes the arbitration clause (Clause [Insert Clause Number]) of the Agreement in view of the existence of arbitrable disputes under the Agreement.
Our Client hereby proposes the appointment of: [Provide Name(s) of Director(s) to be appointed] pursuant to the agreed procedure in Clause [Insert Clause Number].
Name of Proposed Arbitrator / Retired Judge: [Enter Name of Arbitrator / Retired Judge]
Address: [Enter Address]
Contact / Email: [Enter Contact Details]
To serve as the Sole Arbitrator to resolve any disputes, claims or counterclaims that may arise under or in connection with the Agreement.
You are hereby invited to agree to the appointment of the above-named Sole Arbitrator within 30 (thirty) days of receipt of this Notice. (Or: You are required to nominate your Arbitrator within 30 days of receipt of this Notice, or Our Client shall proceed as provided by law).
Date Of Commencement
Please note that in accordance with Section 21 of the Arbitration and Conciliation Act, 1996, the arbitral proceedings in respect of the aforesaid disputes shall be deemed to have commenced from the date you receive this Notice.
Results Of Non-Compliance
Please note that if you do not agree to the appointment of the proposed Arbitrator / respond to this Notice within 30 days of receipt, Our Client shall be at liberty to take appropriate action under Section 11 of the Arbitration and Conciliation Act, 1996 for the appointment of an Arbitrator, at your own cost and risk.
A copy of this Notice is kept in our office for record and further necessary legal action.
Yours faithfully,
On behalf of and for [Name of Claimant Entity/Client]
[name of the Advocate / Legal Counsel]
Advocate(s)
[name of the law firm or chamber]
[Contact Number]
Author: Shreya Mukherjee in case of any queries please contact/write back to us via email to content@khuranaandkhurana.com or at Khurana & Khurana, Advocates and IP Attorney.
Endnotes
The Arbitration and Conciliation Act, No. 26 of 1996, India Code (1996) § 21.
Id. § 34.
M/S Bhagheeratha Engineering Ltd. v. State of Kerala, 2026 INSC 4 (2026) (India).
The Arbitration and Conciliation Act, No. 26 of 1996, India Code (1996) § 21.
Id. § 23.
Id. § 43; see also The Limitation Act, No. 36 of 1963, India Code (1963).
The Arbitration and Conciliation Act, No. 26 of 1996, India Code (1996) § 34.
The Indian Contract Act, No. 9 of 1872, India Code (1872) § 28(b).
Adavya Projects Pvt. Ltd. v. Vishal Structurals Pvt. Ltd., (2025) 9 SCC 686 (India).
M/S Bhagheeratha Engineering Ltd. v. State of Kerala, 2026 INSC 4 (2026) (India).
ASF Buildtech Pvt. Ltd. v. Shapoorji Pallonji & Co. Pvt. Ltd., (2025) 9 SCC 686 (India).
AMLEGALS Analysis, Failure to Issue Section 21 Notice Not Fatal If Claims Are Eventually Arbitrable, available at: https://amlegals.com/failure-to-issue-section-21-notice-not-fatal-if-claims-are-eventually-arbitrable
State of Goa v. Praveen Enterprises, (2012) 12 SCC 581 (India).
Adavya Projects Pvt. Ltd. v. Vishal Structurals Pvt. Ltd., (2025) 9 SCC 686 (India).
Indian Oil Corporation Ltd. v. Amritsar Gas Service, (1991) 1 SCC 533 (India).
M.K. Shah Engineers & Contractors v. State of M.P., (1999) 2 SCC 594 (India).
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