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Responding to the Notice of Arbitration under the DIAC Arbitration Rules
Introduction
The Delhi International Arbitration Centre represents one of India’s leading institutional arbitration frameworks established to provide parties with a neutral, structured, and efficient mechanism for resolving commercial disputes. Originally known as the Delhi High Court Arbitration Centre, DIAC was created under the guidance of Justice Ajit Prakash Shah, former Chief Justice of the Delhi High Court, with the objective of positioning India as a preferred seat for arbitration proceedings. The DIAC Arbitration Proceedings Rules, 2023, which came into effect following approval by the Chief Justice of Delhi High Court, govern the procedural aspects of arbitration conducted under the Centre’s aegis [1]. These rules represent a sophisticated framework designed to balance procedural efficiency with fairness, incorporating international best practices while remaining rooted in Indian arbitration jurisprudence.
Understanding the proper procedure for responding to a Notice of Arbitration constitutes a critical first step for any respondent party. The response mechanism establishes the foundation for the entire arbitration proceeding, defining the scope of disputes, the composition of the arbitral tribunal, and the preliminary positions of the parties. A well-crafted response can significantly influence the trajectory of arbitration proceedings, while procedural missteps at this initial stage may result in adverse consequences including deemed admissions or procedural foreclosures.
The Notice of Arbitration: Foundational Aspects
A Notice of Arbitration serves as the formal instrument through which a party commences arbitration proceedings under the DIAC framework. This document functions analogously to a plaint in civil proceedings, outlining the claimant’s grievances, the legal and factual basis for the claims, and the specific relief sought. Under Rule 4 of the DIAC Arbitration Proceedings Rules, 2023, the Request for Arbitration must include several mandatory elements that collectively establish the contours of the arbitration [1].
The claimant must provide complete details of all parties including their full names, contact information, postal addresses, telephone numbers, mobile numbers, facsimile numbers, and email addresses. This information ensures proper service and communication throughout the proceedings. The request must also contain a brief description of the dispute’s nature and circumstances, specifying the relief claimed with quantification where possible. Perhaps most importantly, the request must include the full terms of the arbitration clause or separate arbitration agreement being invoked, along with copies of the underlying contract or instruments from which the dispute arises.
Additional requirements include disclosure of any parallel arbitration proceedings between the same parties involving identical disputes, submission of a list of proposed arbitrators from the DIAC Panel (five names for sole arbitrator cases, or nomination of one arbitrator in three-member tribunal cases), and payment of the requisite administrative charges. These comprehensive requirements ensure transparency and facilitate efficient case administration from the outset.
Statutory Timeline for Responding to the Notice of Arbitration: Understanding Rule 5
The DIAC Arbitration Proceedings Rules, 2023 establish clear temporal boundaries for filing a response to the Request for Arbitration. Rule 5.1 provides that “the other party shall file its response to the Request for Arbitration within thirty days of receipt of such request, failing which it shall be presumed that the party has consented to the arbitration in accordance with these Rules” [1]. This thirty-day period commences from the date of actual receipt of the request, calculated in accordance with the communication provisions under Rule 3.
The thirty-day timeline represents a mandatory procedural requirement designed to prevent unnecessary delays at the preliminary stage of arbitration. This timeframe aligns with international arbitration practices while providing parties with sufficient opportunity to consult legal counsel, conduct preliminary investigations, and formulate comprehensive responses. Importantly, the rules provide flexibility through DIAC’s discretionary power to extend this time limit upon the respondent’s request, though such extensions are not granted as a matter of course and require demonstrable justification.
Failure to respond within the prescribed thirty-day period carries significant consequences. The rules explicitly state that such failure results in a presumption that the party has consented to arbitration in accordance with DIAC Rules. While this does not constitute a default judgment on merits, it does establish procedural consent and allows the arbitration to proceed without the respondent’s active participation in the preliminary stages, including arbitrator appointment.
Essential Contents of the Response: A Detailed Examination
Rule 5.1 of the DIAC Arbitration Proceedings Rules, 2023 delineates the mandatory contents that must be included in a Response to the Request for Arbitration [1]. These requirements ensure that both parties present complete information necessary for efficient case administration and tribunal constitution.
First, the response must contain a confirmation or denial of all or part of the claims, explicitly addressing the claimant’s invocation of the arbitration agreement. This requirement compels the respondent to take a definitive position on whether the arbitration agreement exists, is valid, and encompasses the disputes raised by the claimant. Any jurisdictional challenges must be clearly articulated at this stage, though they can also be raised later in accordance with principles established in Section 16 of the Arbitration and Conciliation Act, 1996.
The response must include complete contact details of the respondent and its legal representatives, mirroring the information requirements imposed on the claimant. This ensures proper service of documents throughout the proceedings. Where the respondent wishes to assert counterclaims, the response must contain “a statement briefly describing the nature and circumstances of the dispute and the defence to the claim, including Counter-Claims, if any, raised specifying the relief claimed, and the amounts of any quantified Counter-Claims and, to the extent possible, an estimate of value of any other Counter-Claims” [1].
Additionally, the response must address or propose terms regarding the conduct of arbitration, including the number of arbitrators, applicable rules of law, and the seat or place of arbitration. In cases involving a sole arbitrator, the respondent must provide a list of five nominees from the DIAC Panel for consideration. For three-member tribunals, the respondent must nominate one arbitrator at this stage. The response must include confirmation that copies have been served on all other parties with documentary proof satisfactory to DIAC, and confirmation that requisite administrative charges have been paid.
Integration with the Arbitration and Conciliation Act, 1996
The DIAC Arbitration Proceedings Rules operate within the broader framework of the Arbitration and Conciliation Act, 1996, which provides the statutory foundation for arbitration in India. This relationship is explicitly acknowledged in Rule 1.3, which states “if any of these Rules are in conflict with a mandatory provision of law, such law shall prevail” [1]. This provision ensures compliance with mandatory statutory requirements while allowing institutional rules to supplement and operationalize the statutory framework.
Section 16 of the Arbitration and Conciliation Act, 1996 grants arbitral tribunals the competence to rule on their own jurisdiction, embodying the principle of “Kompetenz-Kompetenz” [2]. This provision states that “the arbitral tribunal may rule on its own jurisdiction, including ruling on any objections with respect to the existence or validity of the arbitration agreement” [2]. Under Section 16(2), a plea challenging the tribunal’s jurisdiction must be raised no later than the submission of the statement of defence, though a party is not precluded from raising such a plea merely because they appointed or participated in appointing an arbitrator [2].
The integration of Section 16 with DIAC Rules means that respondents raising jurisdictional objections in their response are preserving their right to challenge the tribunal’s competence while simultaneously participating in the proceedings. This reflects the principle established in numerous judicial decisions that participation in arbitrator appointment does not constitute waiver of jurisdictional objections if properly preserved.
Section 29A of the Arbitration and Conciliation Act, 1996 imposes time limits for rendering arbitral awards, providing that “the award in matters other than international commercial arbitration shall be made by the arbitral tribunal within a period of twelve months from the date of completion of pleadings under sub-section (4) of section 23” [3]. This provision, introduced through the 2015 Amendment Act and modified in 2019, creates urgency in arbitration proceedings and incentivizes parties to complete pleadings efficiently. For DIAC arbitrations, this means that the thirty-day response period and subsequent pleading timelines directly impact the commencement of the twelve-month award period, making timely compliance with procedural requirements essential.
Procedural Considerations and Strategic Implications
Responding to a Notice of Arbitration involves both procedural compliance and strategic positioning. The response represents the respondent’s first formal communication to both the claimant and DIAC, establishing the respondent’s seriousness, preparedness, and approach to the dispute. From a procedural standpoint, strict adherence to the thirty-day timeline is critical. Courts have consistently held that procedural timelines in arbitration must be respected to achieve the statutory objective of expeditious dispute resolution.
Where a respondent requires additional time to prepare a comprehensive response, early communication with DIAC requesting an extension is advisable. Such requests should be supported by concrete reasons demonstrating genuine need rather than tactical delay. DIAC possesses discretion to grant reasonable extensions, but this discretion is exercised judiciously to prevent arbitration proceedings from becoming protracted.
The response should carefully address each element of the claimant’s request, neither ignoring claims nor making unnecessary admissions. Jurisdictional objections, if any, must be clearly articulated with supporting legal and factual grounds. The landmark Supreme Court decision in SBP & Co. v. Patel Engineering Limited emphasized that arbitral tribunals possess primary competence to determine jurisdictional questions, with limited scope for premature judicial intervention [4]. Therefore, respondents should frame jurisdictional challenges with an understanding that the tribunal will first rule on these issues before courts exercise supervisory jurisdiction.
Strategic considerations also govern the nomination of arbitrators. In sole arbitrator cases, the respondent’s list of five nominees should include individuals with relevant expertise, demonstrated impartiality, and availability. For three-member tribunals, the party-appointed arbitrator often plays a crucial role in deliberations, making the selection decision particularly significant. The nominated arbitrator must meet disclosure requirements under Section 12 of the Arbitration and Conciliation Act, 1996, and any circumstances giving rise to justifiable doubts regarding independence or impartiality must be disclosed [1].
Counterclaims and Set-Off: Expanding the Dispute Resolution Scope
Rule 5.2 of the DIAC Arbitration Proceedings Rules, 2023 explicitly permits respondents to include counterclaims in their response, stating “the Response may also include the Statement of Defence and a Statement of Counter-Claim” [1]. This provision recognizes that commercial disputes frequently involve mutual claims between parties, and efficiency demands their resolution in a single proceeding rather than through multiple arbitrations or litigations.
Counterclaims must fall within the scope of the arbitration agreement to be maintainable. Where the arbitration clause covers “all disputes arising out of or in connection with the contract,” counterclaims relating to the same contractual relationship typically satisfy jurisdictional requirements. However, counterclaims based on entirely separate contracts or transactions may face jurisdictional challenges unless the arbitration agreement explicitly encompasses such broader disputes.
The procedural treatment of counterclaims mirrors that of primary claims. The respondent/counter-claimant must provide detailed factual and legal grounds supporting the counterclaim, quantify the relief sought, and submit supporting documents. The original claimant must then respond to counterclaims within timelines established by the tribunal, ensuring both parties have adequate opportunity to address all claims in dispute.
Counterclaims also impact the financial aspects of arbitration. Under the DIAC Administrative Costs and Arbitrators’ Fees Rules, 2018, the Centre may fix separate advances for claims and counterclaims, with the total amount affecting arbitrator fees calculated on a sliding scale based on the aggregate value in dispute [1]. Parties asserting counterclaims must be prepared to deposit their proportionate share of arbitration costs.
Communication Provisions and Deemed Receipt
Rule 3 of the DIAC Arbitration Proceedings Rules, 2023 establishes detailed provisions governing written communications, including service of the Request for Arbitration and response [1]. These provisions determine when the thirty-day response period commences and ensure proper notice to all parties.
Written communications may be delivered through various means including personal delivery, registered post, courier service, or electronic communication including email and facsimile. The rules provide that communication is deemed received if delivered to the addressee personally or to the addressee’s habitual residence, place of business, email, or address specified in the agreement. Where none of these locations can be found after reasonable inquiry, communication is deemed received if sent to the last known place of business, habitual residence, or mailing address by registered post or email with a record of attempted delivery.
For electronic communications, delivery is deemed to occur when transmitted, with reference to the recipient’s time zone. This provision acknowledges modern communication practices while providing certainty regarding timing. The calculation of the response period begins on the day following receipt or deemed delivery, with non-business days at the place of receipt extending the deadline to the next business day [1].
These communication provisions balance efficiency with fairness. Electronic transmission enables rapid service while maintaining evidentiary records. The deemed receipt provisions prevent parties from avoiding arbitration by refusing to accept communications while protecting against genuine communication failures.
The Role of DIAC in Response Processing
Upon receiving a response, DIAC performs several administrative functions critical to the smooth functioning of arbitration proceedings. The Centre verifies that the response satisfies mandatory requirements under Rule 5, including payment of administrative charges and proper service on other parties. Where deficiencies exist, DIAC may direct the respondent to cure such deficiencies within a specified period.
DIAC also plays a central role in constituting the arbitral tribunal based on nominations provided in the request and response. Under Rule 8, where parties have agreed on a sole arbitrator, DIAC appoints from the common names appearing in both the claimant’s and respondent’s lists. If no common name exists, the Chairperson or Sub-Committee exercises appointment authority [1]. For three-member tribunals, the two party-appointed arbitrators must appoint the presiding arbitrator within twenty-one days, failing which DIAC makes the appointment.
The Centre maintains comprehensive case records, facilitating efficient administration throughout the arbitration. This includes tracking procedural timelines under Section 29A, coordinating communications between parties and the tribunal, and managing the financial aspects of arbitration including deposit of fees and disbursement to arbitrators according to prescribed schedules.
Consequences of Non-Response or Inadequate Response
Failure to file a timely or adequate response carries significant consequences under the DIAC framework. As previously noted, failure to respond within thirty days creates a presumption of consent to arbitration in accordance with DIAC Rules [1]. While this does not equate to admission of claims on merits, it removes the respondent’s ability to participate in the preliminary stages, particularly arbitrator nomination.
Where a respondent files an incomplete response omitting mandatory elements, DIAC may decline to treat it as satisfying Rule 5 requirements until deficiencies are cured. Prolonged non-compliance may result in the arbitration proceeding without the respondent’s input on critical procedural matters. Once the tribunal is constituted, Rule 21.3 empowers it to “proceed with the arbitration notwithstanding the failure or refusal of any party to comply with these Rules or with the Tribunal’s orders or directions” [1].
An inadequate response that fails to properly address jurisdictional objections, counterclaims, or procedural preferences may result in waiver of rights or foreclosure of positions. The principle established in judicial precedents is that parties must raise objections and assert claims at appropriate procedural stages to preserve their rights. Delayed assertion of positions may be rejected by tribunals as procedurally improper or tactically motivated.
Emerging Jurisprudence and Future Developments
The interpretation and application of response procedures under DIAC Rules continue to evolve through arbitral awards and judicial decisions. Recent amendments to the DIAC framework reflect ongoing efforts to enhance efficiency, incorporate technological advances, and align with international best practices. The 2023 Rules introduced several modifications to response procedures, streamlining requirements while maintaining procedural safeguards.
Judicial interpretation of the interplay between institutional rules and the Arbitration and Conciliation Act, 1996 has generally favored institutional autonomy while preserving mandatory statutory protections. Courts have recognized that institutional rules like those of DIAC serve important gap-filling and administrative functions, applying unless they conflict with mandatory statutory provisions. This approach provides parties with comprehensive procedural frameworks while ensuring consistency with fundamental arbitration principles embodied in the Act.
The Supreme Court’s approach in cases such as Rohan Builders (India) Private Limited v. Berger Paints India Limited, which clarified that applications for extension of time under Section 29A can be filed even after expiration of prescribed periods, demonstrates judicial sensitivity to practical realities in arbitration [5]. This flexibility extends to response procedures, where courts have occasionally permitted late responses or condoned procedural irregularities upon demonstration of adequate cause and absence of prejudice to opposing parties.
Conclusion
Responding to a Notice of Arbitration under the DIAC Arbitration Rules represents a critical procedural step that significantly influences the trajectory of arbitration proceedings. The comprehensive framework established by the DIAC Arbitration Proceedings Rules, 2023 provides clear guidance on timelines, mandatory contents, and procedural requirements for responses. The thirty-day response period under Rule 5, while firm, incorporates flexibility through DIAC’s discretionary extension power exercised upon demonstration of adequate cause.
Effective responses must satisfy all mandatory requirements including confirmation or denial of claims, complete contact information, jurisdictional positions, counterclaims where applicable, arbitrator nominations, and proof of service and payment. Strategic considerations include timely compliance, careful framing of jurisdictional objections, thoughtful arbitrator selection, and comprehensive assertion of counterclaims within the scope of the arbitration agreement.
The integration of DIAC Rules with the Arbitration and Conciliation Act, 1996 ensures that institutional procedures operate within the broader statutory framework governing arbitration in India. Key statutory provisions including Section 16 on jurisdictional competence and Section 29A on time limits for awards directly impact response procedures and subsequent pleadings. The evolving jurisprudence interpreting these provisions continues to shape arbitration practice, generally favoring institutional autonomy while preserving essential procedural safeguards.
For parties involved in disputes subject to DIAC arbitration, understanding and properly executing response procedures constitutes an essential first step toward effective dispute resolution. Early consultation with experienced arbitration counsel, careful attention to procedural requirements, and strategic positioning in the response lay the groundwork for successful navigation of the arbitration process from inception through final award.
References
[1] Delhi International Arbitration Centre (Arbitration Proceedings) Rules, 2023. Available at: https://dhcdiac.nic.in/diac-arbitration-proceedings-rules-2018/
[2] Milon K. Banerji Centre for Arbitration Law. “Section 16 of the Arbitration and Conciliation Act, 1996.” NALSAR University of Law. Available at: https://mkbac.nalsar.ac.in/section-16-of-the-arbitration-and-conciliation-act-1996-2/
[3] The Legal School. “Section 29A of Arbitration and Conciliation Act: Time Limit for Awards.” Available at: https://thelegalschool.in/blog/section-29a-arbitration-and-conciliation-act
[4] SBP & Co. v. Patel Engineering Ltd. (2005) 8 SCC 618 (Supreme Court of India)
[5] IndiaCorpLaw. “Timeline of filing Application under Section 29A for Extension of Time.” Available at: https://indiacorplaw.in/2024/11/02/timeline-of-filing-application-under-section-29a-for-extension-of-time/
[6] The Arbitration and Conciliation Act, 1996. Available at: https://www.indiacode.nic.in/bitstream/123456789/1978/3/a1996-26.pdf
[7] Lexology. “The restricted countours of the exercise of writ jurisdiction in respect of arbitral powers under section 16.” Available at: https://www.lexology.com/library/detail.aspx?g=e3051bc7-b896-4722-b7cc-c6563e65f885
[8] Global Arbitration Review. “Commercial Arbitration: India.” Available at: https://globalarbitrationreview.com/insight/know-how/commercial-arbitration/report/india
