In a ruling that will matter to businesses relying on arbitration clauses, the Supreme Court of India has restored an interim injunction protecting a hotel franchise arrangement, holding that arbitration legally begins when a notice is received-not when a court petition is filed. The decision overturns a Karnataka High Court order that had vacated the protection on technical grounds.
Background of the Case
The dispute arose between Regenta Hotels Private Limited and M/s Hotel Grand Centre Point, a partnership firm operating a hotel in Srinagar. The parties had entered into a franchise agreement in March 2019, under which Regenta provided brand support, training, and operational expertise.
Trouble surfaced amid an internal family dispute among the partners of the hotel firm. Regenta alleged that one partner interfered with hotel operations-shouting at staff, threatening cancellations, and demanding money beyond the agreed terms. Seeking protection, Regenta approached a Bengaluru civil court under Section 9 of the Arbitration and Conciliation Act, which allows courts to grant interim relief before arbitration formally begins.
An ad-interim injunction was initially granted. However, months later, the trial court vacated it, citing Regenta’s failure to commence arbitration within the prescribed time. The High Court of Karnataka upheld that view, reasoning that arbitration had not begun within 90 days because the petition seeking appointment of an arbitrator was filed late.
While the High Court accepted that the franchise agreement existed and had been acted upon, it ruled that interim relief could not survive. According to the High Court, arbitral proceedings begin only when a formal court application for appointing an arbitrator is made. Since that step came after the 90-day window, the injunction was treated as automatically lapsed.
Supreme Court’s Observations
Hearing Regenta’s appeal, the Supreme Court took a different view of how arbitration law works. The Bench closely examined Sections 9 and 21 of the Arbitration Act and earlier judgments on the subject.
“The law is clear,” the Bench observed, “that arbitral proceedings commence on the date the respondent receives a request to refer disputes to arbitration.” The Court stressed that this definition is statutory and cannot be altered by procedural steps taken later in court.
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The judges rejected the idea that a Section 11 petition-seeking appointment of an arbitrator-marks the beginning of arbitration. “Judicial intervention is a remedial step,” the Court noted, “not the trigger for commencement.”
In this case, Regenta had issued a formal notice invoking arbitration well within 90 days of the interim order. The respondent even replied, refusing to nominate an arbitrator. That exchange, the Court said, clearly showed that arbitration had already commenced in law.
By treating the later court filing as the start date, the High Court had, in the Supreme Court’s words, “misconceived the statutory scheme.” Such an approach, the Bench warned, would defeat the purpose of arbitration by forcing parties into court even when notice requirements are met.
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Final Decision
Allowing the appeal, the Supreme Court set aside the Karnataka High Court judgment and restored the original injunction granted by the trial court. The Bench held that Regenta had complied with the 90-day requirement, as arbitration had commenced with the receipt of its notice.
“The interim protection was wrongly vacated,” the Court said, adding that the High Court should now decide the pending application for appointment of an arbitrator expeditiously and on its own merits.
With that, the appeal was allowed, and related contempt proceedings were closed without costs.
Case Title: Regenta Hotels Pvt. Ltd. vs M/s Hotel Grand Centre Point & Ors.
Case No.: Civil Appeal arising out of SLP (C) No. 30212 of 2024
Decision Date: January 7, 2026
