LEGAL LEARNING Shri Ganpati Jurists
M/S Alchemist Hospitals Ltd. vs. M/S ICT Health Technology Services India Pvt. Ltd. – Supreme Court
The Supreme Court held that the mere use of the word “arbitration” in a clause is not enough to treat it as an arbitration agreement.
The parties must clearly intend to resolve their disputes through arbitration.
The Court laid down six essential conditions that must be present for a valid
arbitration agreement:
The agreement must show that the tribunal’s decision will be binding on both parties.
The tribunal’s jurisdiction must arise from the parties’ consent, a court order, or a statute providing for arbitration.
The agreement must contemplate that the substantive rights of the parties will be decided by the arbitral tribunal.
The tribunal must be expected to act impartially and judicially, with equal fairness to both sides.
The reference to arbitration must be intended to be legally enforceable.
The agreement must contemplate that the tribunal will decide an existing dispute at the time of reference.
Held: Since the clause in this case did not satisfy these essential elements, the Court refused to refer the dispute to arbitration.
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