COMMERCIAL DISPUTES  ·  COMMERCIAL

He said he was never notified of the arbitration case. But his lawyer had already appeared.

The Supreme Court dismissed a partner's appeal challenging an arbitrator's appointment, noting he participated in proceedings through his advocate and suppressed that fact.

Dismissed.

Participated, argued,
then suppressed.

TL;DR

The Supreme Court dismissed a partner's appeal challenging an arbitrator's appointment, noting he participated in proceedings through his advocate and suppressed that fact.

In this reading
1. The retirement deed that waited five years 2. The advocate who walked into the room 3. Two questions the court asked 4. When Vidya Drolia closed the door 5. The case the court left alive 6. The warning for anyone who thinks they can hide

A partner claimed he never got notice of the court case that appointed an arbitrator against him. But his lawyer had already shown up—and argued. By the time the appellant reached the Supreme Court, he had already participated in arbitration proceedings, watched his objections get rejected, and filed a separate challenge to the arbitrator's orders. The only thing he hadn't done was tell the Supreme Court about any of it.

The retirement deed that waited five years

September 2014. A partner in three firms called M/s M.M. Developers retired. The retirement deed—the document that formalised his exit, bearing the weight of a signature on its final page—contained a standard clause: if disputes arose later, they would go to arbitration (private dispute resolution outside court, where a neutral person decides the outcome). For five years, nothing happened. Then, in February 2019, the retired partner invoked that clause. He sent a legal notice to the other partners. No one responded.

The retired partner then did what the law allows: he filed a petition in the Bombay High Court under Section 11 of the Arbitration and Conciliation Act, 1996 (a provision that lets a court appoint an arbitrator when one party refuses to cooperate). In March 2020, the High Court appointed a sole arbitrator. The appellant—one of the remaining partners—later claimed he was never properly notified of these court proceedings.

The advocate who walked into the room

May 2021. Over a year after the arbitrator was appointed, the appellant's advocate appeared before the arbitrator. The advocate's appearance slip—dated, signed, filed—marked his entry into the record. He argued that there was no valid arbitration agreement and that the retired partner's claim was time-barred (filed too late under the law of limitations). The arbitrator rejected those objections under Section 16 of the Arbitration Act (which gives the arbitrator the power to decide whether they have jurisdiction to hear the case). The appellant then filed a petition under Section 34 of the Arbitration Act (a provision to challenge an arbitrator's interim order in court). That petition was pending before the Bombay High Court.

Then the appellant went to the Supreme Court. He filed appeals challenging the original March 2020 order that appointed the arbitrator. His core argument: the High Court appointed the arbitrator without giving him proper notice. But he had suppressed one crucial fact—his advocate had already participated in the arbitration, argued objections, and lost.

Two questions the court asked

The bench—Justice Abhay S. Oka and Justice Indira Banerjee—heard the case on February 2, 2022. The courtroom fell still as the record was read. The appellant's argument collapsed on two fronts. First, the High Court had followed the established practice on the Original Side of the Bombay High Court: advocates serve notice of proceedings on each other before the case comes up, and the court acts on an affidavit of service (a sworn statement that notice was delivered). There was nothing illegal about that process.

Second, and more damningly, the appellant had already participated in the arbitration. He had filed objections under Section 16, which were overruled. He had then filed a Section 34 petition challenging that ruling. The Supreme Court noted—in silence broken only by the shuffle of paper—that the appellant had suppressed this entire sequence of events.

When Vidya Drolia closed the door

The Supreme Court applied its own precedent from Vidya Drolia & Others v. Durga Trading Corporation (2021) 2 SCC 1. That judgment laid down a clear rule: when a court is dealing with a Section 11 petition to appoint an arbitrator, and the objections about whether the dispute can be arbitrated are "plainly arguable"—meaning they are not frivolous or obviously outside the arbitration agreement—the court should refer the matter to the arbitrator. The arbitrator, not the court, decides those objections.

In this case, the appellant argued that disputes under the retirement deed were not arbitrable (not capable of being resolved through arbitration). The Supreme Court held that this contention was plainly arguable. That meant it was properly a question for the arbitrator, not for the court at the appointment stage. The High Court had done exactly what the law required: it appointed the arbitrator and left the hard questions for later.

The Court also cited SBP & Co. v. Patel Engineering Ltd. (2005) 8 SCC 618 and State of Orissa and another v. Damodar Das (1996) 2 SCC 216, reinforcing the narrow scope of judicial intervention at the Section 11 stage. The ratio was clear: "While dealing with a petition under Section 11 of the Arbitration Act, the Court by default would refer the matter to arbitration when contentions relating to non-arbitrability are plainly arguable." The Court further held that "there is nothing illegal about the High Court acting upon an advocate's notice admittedly served upon the respondent, in accordance with the long-standing practice on the Original Side of the Bombay High Court." And critically: "Where a party has participated in arbitration proceedings through an advocate, supported objections under Section 16 which were overruled, and has filed a petition under Section 34 challenging the arbitrator's order, no case for interference with the Section 11 appointment order is made out."

The case the court left alive

The Supreme Court dismissed the appeals. It left all of the appellant's contentions open—meaning they could still be raised in the pending Section 34 petitions before the Bombay High Court. Those petitions, filed under Section 34(2)(a) subclauses (i), (ii), (iv) and Section 34(2)(b)(i) of the Arbitration Act, remain alive. The court made no finding on whether the claims were time-barred or whether the arbitration agreement was valid. Those questions await the High Court's hearing on the challenge to the arbitrator's interim order.

Meanwhile, the arbitrator had also allowed a Section 17 application (interim measures ordered by the Arbitral Tribunal) in favour of the retired partner in June 2021. That order stood undisturbed. The operative order was crisp: no case for interference, appeals dismissed, no costs. The court did not even need to reach the merits of the arbitration dispute. The appellant's own conduct—participating, then suppressing that participation—had already sealed the outcome.

The warning for anyone who thinks they can hide

This case is a warning for anyone who thinks they can challenge an arbitrator's appointment by pretending they never got notice. The Supreme Court will look at the record. If your lawyer appeared, if you argued objections, if you filed a Section 34 petition—the court will find it. And if you suppress it, the court will dismiss your appeal on that ground alone.

For practitioners, the takeaway is procedural but sharp: the Section 11 stage is narrow. The court appoints the arbitrator. It does not decide whether the dispute is arbitrable, unless the objection is so clear that no arbitrator could reasonably find otherwise. Everything else goes to the arbitrator first, then to the Section 34 court.

THE PLAY: If you participate in arbitration proceedings after an arbitrator is appointed, you cannot later challenge that appointment by claiming you never got notice—the Supreme Court will treat your participation as acceptance of the arbitrator's authority.

The retired partner's claim is still alive. The arbitrator's interim orders still stand. And the appellant's Section 34 petition waits before the Bombay High Court. The only thing that died on February 2, 2022, was the argument that a man who had already fought before the arbitrator could pretend he never knew the fight existed.

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Reviewed by Sharad Bansal on 15 · 05 · 2026

Sharad Bansal — Sharad Bansal is an advocate of the Delhi High Court with twenty years of practice in criminal defence and commercial litigation.

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