A party must follow the agreed procedure before invoking arbitration. If the agreement contains an escalation provision which is mandatory in nature, the same should be complied with before invoking arbitration. If the agreement requires a mandatory conciliation or mediation before arbitration can be invoked, the parties have to resort to the same. If a party does not follow and other side does not raise any objection, it would amount to waiver as per Section 4 of the Arbitration Act.
The commencement of arbitration takes place on the date when the request for referring the disputes to arbitration made by a party is received by another party. The parties may however choose a different procedure by way of agreement. Therefore, a notice invoking arbitration (NIA) is essential under Section 21 of the Arbitration Act to commence arbitration. The NIA is important because it stops the limitation for the claim.
When an action is brought before a judicial authority in a matter which is subject of an arbitration agreement, on an application under Section 8 of the Arbitration Act, shall be referred to arbitration unless it finds that prima facie no valid arbitration agreement exists. An application under Section 8 has to be mandatorily preferred no later than the date of submitting the first statement on the substance of disputes. The application under Section 8 must accompany the arbitration agreement in original or a certified copy thereof. 2015 Amendment has inserted the proviso to Section 8(2) that if the original or certified copy of arbitration agreement is not available with the party applying for reference, and the same is retained by other party to the agreement, then the party so applying shall file an application alongwith the copy of the agreement, praying to call upon the other party to produce the original or certified copy.