As the name of the command suggests, you need to specify the start point first, then the center point, and lastly, the end point. Click on the B point to specify the start point, then click on the midpoint of the BC line, which will be taken as the center point of the arc, and lastly, click on the C point. 

An arc that starts from the B point with the center on the midpoint of the BC line and ends on the C point will be formed, as shown:

In this case, the arc is formed outside the triangle because the arc will be formed in an anticlockwise direction with respect to the start point, which is the B point. If you select C as the start point and B as the end point, you will get your arc on the opposite side. Alternatively, you can also press and hold the Ctrl key while making the arc to change the direction of the arc, irrespective of the start and end points.