Partner skipped arbitration notice, then argued he wasn't served — Supreme Court wasn't buying it

He said he never got the notice. But his lawyer had already argued before the arbitrator. On a February morning in 2022, the Supreme Court looked at a man who claimed he was blindsided by an arbitration he never knew existed — only to find that his own advocate had been appearing in those very proceedings for over a year.

The question was deceptively simple: could a partner in a real estate firm escape arbitration by simply claiming he was never served notice, even after his lawyer had shown up and fought the case?

When the retirement deed came back to life

Five partners ran three partnership firms under the M.M. Developers brand. In September 2014, one of them retired. A retirement deed was signed — a clean break, or so it seemed. The deed, a few pages of legal text, sat in a file for nearly five years before it was pulled out again. Buried in that deed was Clause 19: an arbitration clause. It said that if disputes arose about the terms of retirement, the matter would go to arbitration instead of court.

Then, in February 2019, the retired partner sent a legal notice. He invoked the arbitration clause. He wanted his dues settled. The other four partners stayed silent. The notice arrived, was opened, and no reply was sent.

The High Court stepped in

When nobody responded, the retired partner did what the law allowed: he approached the Bombay High Court with a petition under Section 11 of the Arbitration and Conciliation Act, 1996 (the provision that lets a court appoint an arbitrator when one party refuses to cooperate). The petition was filed on the Original Side of the High Court. On March 6, 2020, the High Court appointed a sole arbitrator. The order was passed based on an advocate's notice and an affidavit of service — a single sheet of paper confirming that the other side's lawyer had been informed.

One of the remaining partners — the appellant in this case — later claimed he never got the notice of this petition. He said he was never told about the arbitration. He said the whole thing was a surprise.

The lawyer who showed up anyway

But here is where the story turns. The arbitrator began proceedings. And the appellant's lawyer appeared. Not just once — the lawyer filed objections under Section 16 of the Arbitration Act (the section that lets a party challenge the arbitrator's jurisdiction). The lawyer argued that the dispute was not arbitrable. The lawyer argued it was time-barred. The arbitrator heard those arguments and, on May 25, 2021, rejected them in a detailed order.

Then, on June 24, 2021, the arbitrator granted interim relief to the retired partner under Section 17 of the Act (which allows an arbitrator to pass temporary orders to protect a party's interests). The appellant's lawyer was present for that hearing too. The courtroom — or the arbitrator's chamber — was quiet as the order was dictated.

Still, the appellant insisted he had never been served notice of the original Section 11 petition. He took the matter to the Supreme Court.

What the Supreme Court saw

The bench — Justice Abhay S. Oka and Justice Indira Banerjee — examined the record. What they found was this: on the Original Side of the Bombay High Court, there is a long-standing practice. Advocates serve notice of proceedings on the other side before the matter comes up before the judge. The court then acts on that service, confirmed through an affidavit. That is exactly what happened here. The appellant's advocate had received notice. The appellant's advocate had appeared. The court had appointed the arbitrator based on that service.

The Supreme Court held there was nothing illegal about this practice. Service through an advocate, confirmed by affidavit, is a valid mode of service on the Bombay High Court's Original Side. The appellant could not claim ignorance when his own lawyer had been in the room. The Court observed: "The appellant cannot be heard to say that he had no notice of the Section 11 petition when his counsel had entered appearance and participated in the proceedings."

The doctrine of "plainly arguable"

The appellant also raised two substantive arguments: that the dispute was not arbitrable (meaning it could not be resolved through arbitration at all) and that it was barred by limitation (too old to be raised). The Supreme Court applied the test from Vidya Drolia v. Durga Trading Corporation (2021), a landmark judgment that clarified how courts should handle Section 11 petitions.

The principle, drawn from paragraph 154 of that judgment, is this: when a court is asked to appoint an arbitrator, it should not conduct a mini-trial on whether the dispute is arbitrable. If the contention about non-arbitrability is "plainly arguable" — meaning it is not obviously dead on arrival — the court should refer the matter to the arbitrator and let the arbitrator decide. The issue is left open.

The Single Judge of the Bombay High Court had done exactly that. He had not conclusively ruled that the dispute was arbitrable. He had simply said: this is arguable, let the arbitrator decide. The Supreme Court saw no reason to interfere.

The separate challenge that gave the game away

There was another problem with the appellant's case. After the arbitrator rejected his Section 16 objections, the appellant did something curious: he filed a petition under Section 34 of the Arbitration Act (the provision for challenging an arbitral award) against that very order. Section 16(6) of the Act allows exactly this — a party can challenge an arbitrator's ruling on jurisdiction by filing a Section 34 petition.

So the appellant had simultaneously argued in the Supreme Court that the arbitration should never have started, while separately asking the High Court to set aside the arbitrator's order. The Supreme Court noted this contradiction. You cannot claim the proceedings never touched you while you are actively challenging them in another court.

Why the appeals failed

The Supreme Court dismissed all three appeals — Civil Appeal No. 874 of 2022 and Civil Appeal No. 875 of 2022. It found no merit in the challenge to the arbitrator's appointment. It left open the appellant's contentions in the pending Section 34 petitions — meaning the High Court would still decide those on their merits. The arbitrator's interim order under Section 17 was also left undisturbed. No order as to costs was made.

The court's message was clear: you cannot ignore proceedings, let your lawyer appear, fight the case, lose, and then claim you were never served. Participation in arbitration waives the right to complain about how you got there.

THE PLAY: If your lawyer appears before an arbitrator and argues on your behalf, you cannot later claim you were never served notice — the Supreme Court will treat your participation as proof of proper service.

The retired partner's arbitration continued. The appellant's lawyer remained on record. And the court ended where it began: with a notice that was never received, but a lawyer who was always there.