The Punjab and Haryana High Court has held that a notice invoking arbitration under Section 21 of the Arbitration and Conciliation Act, 1996 can be treated as validly served even if it is not actually delivered, provided it is sent to the respondent’s last known business or mailing address in accordance with Section 3(1)(b) of the Act.
Justice Jasgurpreet Singh Puri was dealing with a petition under Section 11 of the Arbitration and Conciliation Act seeking appointment of a sole arbitrator to adjudicate disputes between Rajinder Singh and Moonwalk Infraprojects Private Limited.
The applicant contended that the parties had entered into an agreement containing an arbitration clause requiring disputes to be resolved through arbitration in accordance with the Arbitration Act. Upon disputes arising, the applicant issued a notice invoking arbitration under Section 21 of the Act. Although the notice was sent by registered post, it was not delivered to the respondent. The applicant nevertheless argued that service stood completed by virtue of the deeming provision contained in Section 3(1)(b) of the Act.
The respondent did not dispute the existence of the arbitration agreement but contended that it had never received the notice invoking arbitration.
Examining the record, the Court noted that the arbitration notice had been dispatched to the very address recorded in the agreement executed between the parties. The Court observed that Section 3(1)(b) specifically provides that where a written communication is sent by registered letter or any other means providing a record of attempted delivery to the addressee’s last known place of business, residence or mailing address, such communication is deemed to have been received.
Since the address mentioned in the notice was identical to the address furnished by the respondent in the agreement, the Court held that the statutory requirement of invocation stood satisfied notwithstanding the fact that the notice was not actually delivered, apparently due to a change of address.
The High Court consequently held that both essential prerequisites for exercising jurisdiction under Section 11 of the Act namely, the existence of a valid arbitration agreement and invocation of the arbitration clause stood fulfilled.
Allowing the petition, the Court appointed Senior Advocate Chanchal K. Singla as the sole arbitrator to adjudicate the disputes between the parties, subject to compliance with the statutory requirements of the Arbitration and Conciliation Act, including the disclosure obligations under Section 12. The Court further directed that the arbitrator’s fees would be governed by the Fourth Schedule to the Act and requested completion of the proceedings within the timeline prescribed under Section 29A.
