Commencement of arbitral proceedings turns on service of arbitration notice, governing the applicable arbitration law.

For determining whether the Arbitration Act, 1940 or the Arbitration and Conciliation Act, 1996 applies under the saving clause, domestic arbitral proceedings are treated as commencing when notice invoking arbitration and seeking appointment of an arbitrator is served, not when the tribunal is later constituted or the dispute is formally referred by court order. The arbitration clause preserving the 1940 Act or a re-enactment did not, by itself, show an agreement to shift a pending matter to the 1996 Act. The intra-court appeal was also examined against the appeal structure under the 1940 Act and was found not maintainable.

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Issues: (i) When arbitral proceedings are deemed to have commenced for the purpose of deciding whether the Arbitration Act, 1940 or the Arbitration and Conciliation Act, 1996 applies; (ii) whether the intra-court appeal against the learned Single Judge's order was maintainable.

Issue (i): When arbitral proceedings are deemed to have commenced for the purpose of deciding whether the Arbitration Act, 1940 or the Arbitration and Conciliation Act, 1996 applies

Analysis: The governing question was the meaning of commencement under the repealing and saving framework of Section 85(2)(a) of the 1996 Act. Section 21 of the 1996 Act treats arbitral proceedings as commencing on receipt of a request for reference to arbitration, unless otherwise agreed, while Section 37(3) of the 1940 Act deems commencement to occur on service of a notice requiring appointment of an arbitrator. The decision held that, for domestic arbitrations and for the purpose of determining which Act governs under the saving clause, the relevant date is the service of notice invoking arbitration and seeking appointment of an arbitrator, not the later date on which the tribunal is fully constituted or the dispute is formally referred by court order. The arbitration clause preserving the 1940 Act or any statutory modification/re-enactment did not, by itself, show an agreement to shift a pending proceeding to the 1996 Act.

Conclusion: The arbitral proceedings commenced before the 1996 Act came into force, so the 1940 Act applied; this issue was answered in favour of the appellant.

Issue (ii): Whether the intra-court appeal against the learned Single Judge's order was maintainable

Analysis: The maintainability of the Letters Patent Appeal was tested against the appeal structure under Section 39 of the 1940 Act, as construed by precedent. On that scheme, the intra-court appeal did not lie against the order passed by the learned Single Judge in the arbitration matter.

Conclusion: The Letters Patent Appeal was not maintainable; this issue was decided against the appellant.

Final Conclusion: The appeal on the substantive question of applicable law succeeded, but the challenge to the intra-court appeal failed, leaving the overall result only partly in favour of the appellant.

Ratio Decidendi: For the purpose of Section 85(2)(a) of the 1996 Act, commencement of arbitral proceedings in a domestic arbitration is determined by the service of the notice invoking arbitration and seeking appointment of an arbitrator, and not by the later constitution of the tribunal or court reference.

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