Commencement of domestic arbitration turns on service of the invoking notice; earlier notice keeps proceedings under the 1940 Act.

In domestic arbitration, service of the notice invoking arbitration is the determinative date for commencement of proceedings. Where that notice was served before the Arbitration and Conciliation Act, 1996 came into force, the reference and its legal consequences remained governed by the Arbitration Act, 1940 under the repeal-and-saving provision, and the award and decree could not be treated as void merely because the award was made later. The executing court was therefore wrong to hold the award and decree a nullity, particularly where the respondent had withdrawn its jurisdictional objection and participated in the arbitration. The impugned order rejecting execution was set aside.

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Issues: Whether the arbitral proceedings had commenced under the Arbitration Act, 1940 on service of notice invoking arbitration and, if so, whether the award and decree could be treated as a nullity on the footing that the Arbitration and Conciliation Act, 1996 applied.

Analysis: The relevant date for commencement of arbitration is the date on which the claimant issues or serves a request or notice seeking reference of the dispute to arbitration. For domestic arbitration, the meaning of commencement under Section 21 of the Arbitration and Conciliation Act, 1996 is relevant in construing the repeal and saving provision in Section 85(2)(a) of that Act. Where notice invoking arbitration was served before the 1996 Act came into force, the proceedings, and the legal consequences flowing from them, continue to be governed by the 1940 Act. The executing court therefore could not treat the award and decree as void merely because the arbitral reference matured after the new Act commenced. The respondent had also withdrawn its jurisdictional objection and participated in the arbitration.

Conclusion: The notice invoking arbitration dated 06.09.1994 fixed the commencement of arbitration under the 1940 Act. The award and decree were valid and enforceable, and the executing court was in holding them to be a nullity.

Final Conclusion: The impugned order rejecting execution was set aside and the petition was allowed.

Ratio Decidendi: In a domestic arbitration, service of the notice invoking arbitration is the determinative date for commencement, and where that date precedes the commencement of the 1996 Act, the proceedings are governed by the 1940 Act notwithstanding a later award or decree.

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