Section 21 of the Arbitration and Conciliation Act, 1996 provides that arbitral proceedings in respect of a dispute commence on the date the respondent receives a request for that dispute to be referred to arbitration. For years, respondents have argued that a claim not preceded by a formal Section 21 notice cannot be arbitrated at all.
In M/s Bhagheeratha Engineering Ltd. v. State of Kerala (2026 INSC 4, decided 5 January 2026), the Supreme Court rejected that argument. It held that the object of Section 21 is only to fix the date of commencement of arbitral proceedings — which matters mainly for limitation — and that a Section 21 notice is not a mandatory pre-condition to arbitration. Failure to issue one is not fatal where the claim is otherwise valid and arbitrable.
Why it matters: Section 21 objections are a common early tactic to knock out a claim on a technicality. After this ruling, that objection carries far less weight on its own, and tribunals are expected to look at whether the claim is genuinely arbitrable and within time rather than whether a particular letter was sent.
The practical takeaway: still send a clear Section 21 notice. It remains the cleanest way to fix the commencement date for limitation, and an unambiguous notice removes an avoidable argument altogether. What has changed is the consequence of missing one, not the value of sending it.
This note summarises the reported judgment for general information and is not legal advice on any specific matter.