Case Title:- M/S ALCHEMIST HOSPITALS LTD. vs. M/S ICT HEALTH TECHNOLOGY SERVICES INDIA PVT. LTD.
Citation:- 2025 INSC 1289
Date:- 06.11.2025
Hon’ble Supreme Court Bench:- JUSTICE DIPANKAR DATTA and JUSTICE A.G.MASIH
The Hon’ble Supreme Court recently observed that the mere use of the term “arbitration” in a clause is not sufficient to mandate reference to arbitration unless the parties clearly intended to resolve their disputes through arbitration. The Hon’ble Supreme Court upheld the Hon’ble Punjab and Haryana High Court’s refusal to refer a dispute to arbitration between Alchemist Hospitals and ICT Health.
- The Hon’ble Court held that merely using the term “arbitration” in a clause is not enough, the parties must clearly intend to resolve disputes through arbitration.
- In the present case, The dispute arose under Clause 8.28 of a Software Implementation Agreement, titled “Arbitration,” which required resolution by the companies’ chairmen and allowed civil court recourse if unresolved.
- The Hon’ble Court found this to be an internal dispute resolution mechanism, not a valid arbitration clause.
- The Hon’ble Court observed that an arbitration agreement must reflect the parties’ intent to be bound by the arbitral tribunal’s decision.
- The Hon’ble Court relied on Jagdish Chander v. Ramesh Chander (2007) 5 SCC 719, stating that if a clause allows filing a civil suit after an internal decision, it cannot qualify as an arbitration agreement. Citing K.K. Modi v. K.N. Modi (1998) 3 SCC 573, the Court reiterated that arbitration is a creature of contract and requires mutual consent (consensus ad idem).
- The appeal was dismissed, with the Hon’ble Court concluding that Clause 8.28 lacked any real intention to refer disputes to arbitration.
