M/S Alchemist Hospitals Ltd. vs. M/S Ict Health Technology Services India Pvt. Ltd.

REPORTABLE
2025 INSC 1289
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO. ………….. OF 2025
[ARISING OUT OF SLP (CIVIL) NO. 19647/2024]

M/S ALCHEMIST HOSPITALS LTD. … APPELLANT

VS.

M/S ICT HEALTH TECHNOLOGY
SERVICES INDIA PVT. LTD. … RESPONDENT



J U D G M E N T

DIPANKAR DATTA, J.

1. Leave granted.
2. The present civil appeal assails the judgment and order of the High
1
Court of Punjab & Haryana at Chandigarh in ARB No. 471 of 2021,
whereby a learned Judge of the High Court dismissed an application
2
under Section 11(6) of the Arbitration and Conciliation Act, 1996
filed by the appellant.
B RIEF F ACTS
3. The material facts relevant to decide the present appeal are as
Signature Not Verified
follows:
Digitally signed by
rashmi dhyani pant
Date: 2025.11.15
10:24:53 IST
Reason:

1
High Court
2
A&C Act
1


a. The appellant is a private healthcare institution having its
principal establishment at Panchkula, Haryana. Desirous of
upgrading its existing hospital-information software to a more
advanced, integrated system, the appellant entered into
3 st
a Software Implementation Agreement dated 1 November
2018 with the respondent, a Bengaluru-based technology
company specialising in digital health-management platforms.
b. Under the agreement, the respondent undertook to implement
its proprietary hospital-management product known as “HINAI
4
Web Software” , a software intended to streamline patient-care
operations, billing, diagnostics, and record management across
the appellant’s facilities.
c. Clause 8.28 of the Agreement which forms the focal point of
this lis is reproduced as follows:
“8.28 – Arbitration
The parties shall attempt in good faith to resolve any dispute
arising out of or relating to this Agreement promptly by
negotiation between executives, who have authority to settle
the controversy and who are at a higher level of management,
than the persons with direct responsibility for administration
of this Agreement.
If the matter is not resolved by negotiation pursuant to
paragraph above, then the matter will proceed to mediation as
set forth below:
Any dispute, controversy or claim arising out of or relating in
any way to the Agreement/the relationship, including without
limitation, any dispute concerning the construction, validity,

3
Agreement
4
HINAI software
2


interpretation, enforceability or breach of the Agreement, shall
be resolved by arbitration through senior management
comprising respective Chairmen of the two parties
(Arbitrators). Should the dispute not be resolved within fifteen
(15) days after arbitration, the complaining party shall seek
remedies through the courts of law. The demand for
arbitration should be made within a reasonable time
(maximum 60 days) after the dispute or matter in question
has arisen.”
d. Following execution of the agreement, the appellant began
implementing the HINAI software in November 2018. However,
the appellant alleges that there were repeated procedural
delays and technical failures on the part of the respondent,
including sluggish performance, billing malfunctions, and
incomplete integration of diagnostic modules.
e. Relying on assurances from the respondent, the appellant
permitted a second attempt at implementation within three
st
months. The HINAI software went live again on 1 January
2020. The appellant alleges that there were numerous
operational issues once again and the system was rolled back
st
on 1 April 2020 .
f. On even date, the appellant addressed an e-mail to the

respondent invoking Clause 8.28 of the Agreement and
requesting a mediation meeting between the Chairmen of the
two companies at Panchkula or, alternatively, through video-
conference in view of pandemic restrictions. The respondent
rd
replied on 3 April, 2020 vide e-mail asking for the appellant’s
cooperation.
3


g. Appellant called upon the respondent to concur in the
appointment of a sole arbitrator and suggested the names of
two retired Chief Justices for acting as an arbitrator by a notice
th
dated 29 June, 2020, issued under Sections 11 and 21 of the
A&C Act. Respondent acknowledged receipt of the notice by e-
th th
mail dated 29 July 2020, sought time to respond, and on 25
August 2020 filed a reply requesting trial of the project one last
time.
Having spent so much of effort by both parties. It was
an unfortunate decision of roll back. For ICT it is not
only loss of name but also loss in revenue as our cost
incurred till date is more than the revenue we have got
from Alchemist. We still request Alchemist if there is
any way for making the project lie which will be in the
best interest of both sides. For which if ITC has to spent
some more effort, we will be honouring the same if
Alchemist ensures Master date and processes are frozen
and agreed one last time.

h. Constrained by the respondent’s communication, the appellant
approached the High Court invoking Section 11(6) of the A&C
Act and praying for the appointment of a sole arbitrator to
adjudicate the disputes arising under the Agreement.
MPUGNED UDGMENT AND RDER
I J O
4. The High Court observed that on a plain reading of Clause 8.28 of the
Agreement, the parties had envisaged a three-tier process for
resolving disputes: first, by negotiation between senior management
executives; next, through mediation between the respective
Chairmen of the parties; and finally, by permitting the complaining
4


party to seek remedies through the courts of law if the dispute
remained unresolved within fifteen days.
5. The High Court held that the term “arbitration” had been loosely
employed in Clause 8.28 and that the true intention discernible from
its language was only to provide for negotiation and mediation at an
internal company level. It was further observed that the Chairmen of
both parties could not be regarded as private or independent
adjudicators, and that no element of finality or binding effect was
attached to their determination. Also, in the event of a disagreement
between the two Chairmen, an outcome not improbable, the process
would reach a deadlock, after which the parties were expressly free
to approach civil courts.
6. The High Court further observed that nothing in Clause 8.28 indicated
any intention of the parties to refer their disputes to a private
adjudicatory forum or to abide by its decision. The clause, in the High
Court’s view, merely contemplated negotiation and mediation without
creating a binding arbitral process and hence, it proceeded to dismiss
the appellant’s application under Section 11(6) of the A&C Act holding
that Clause 8.28 is not a valid arbitration agreement.
I SSUE
7. The seemingly simple question that we are tasked to decide in this
appeal is whether Clause 8.28 of the Agreement can be considered
to be a valid arbitration agreement under the A&C Act.
5


A NALYSIS
8. We have heard Mr. Puneet Bali, learned senior counsel for the
appellant and Mr. Rishab Gupta, learned counsel for the
respondent.
9. An “arbitration agreement” is defined by the A&C Act as follows:
7. Arbitration agreement.—
(1) In this Part, “arbitration agreement” means an agreement by the
parties to submit to arbitration all or certain disputes which have
arisen or which may arise between them in respect of a defined legal
relationship, whether contractual or not.
(2) An arbitration agreement may be in the form of an arbitration
clause in a contract or in the form of a separate agreement.
(3) An arbitration agreement shall be in writing.
(4) An arbitration agreement is in writing if it is contained in—
(a) a document signed by the parties;
(b) an exchange of letters, telex, telegrams or other means of
telecommunication including communication through
electronic means which provide a record of the agreement; or
(c) an exchange of statements of claim and defence in which
the existence of the agreement is alleged by one party and not
denied by the other.
(5) The reference in a contract to a document containing an
arbitration clause constitutes an arbitration agreement if the contract
is in writing and the reference is such as to make that arbitration
clause part of the contract.

10. Modelled on the UNCITRAL Model Law on International Commercial
Arbitration, 1985, the A&C Act forms the primary legislation for
arbitration of disputes, especially for contractual and commercial
disputes, giving primacy to the intent of the parties and every step
6


of the way is dictated by party autonomy, as far as practicable.
Section 7 of the A&C Act is no exception to this rule and party
autonomy is foundational for any reference to arbitration of any
dispute and/or difference that arises or might arise by and between
the parties.
11. Therefore, Section 7 of the A&C Act posits certain requirements that
need to be fulfilled so as to satisfy the attributes of an arbitration
agreement. They are (a) there must exist an agreement between the
parties to refer a dispute/all disputes to arbitration, either before or
after the said disputes arise; (b) the disputes must be in connection
with a defined legal relationship, whether contractual or not, and
lastly, (c) the agreement must be in writing.
12. The second and the third requirements of the disputes being in
connection with a defined legal relationship and that the agreement
must be in writing, are non-issues in the instant case. The crux of the
controversy lies in the first requirement, i.e., whether the parties
agreed to have the disputes and differences arising by and between
them referred to arbitration in terms of Clause 8.28.
13. It is settled law that Section 7 or any other provision of the A&C Act
requires that an arbitration agreement need not be in any specific
form, apart from compliance with the requirements that Section 7 of
the A&C Act ordains. One may profitably refer to the decision in Smt.
7


5
Rukmanibai Gupta v. Collector, Jabalpur & Ors. for this
proposition.
6
14. In K.K. Modi v. K.N. Modi , this Court set out the relevant factors
to determine the existence of an arbitration agreement. The
indicative factors and attributes are:
17. Among the attributes which must be present for an agreement
to be considered as an arbitration agreement are:
( 1 ) The arbitration agreement must contemplate that the
decision of the tribunal will be binding on the parties to the
agreement,
( 2 ) that the jurisdiction of the tribunal to decide the rights of
parties must derive either from the consent of the parties or
from an order of the court or from a statute, the terms of which
make it clear that the process is to be an arbitration,
( 3 ) the agreement must contemplate that substantive rights
of parties will be determined by the agreed tribunal,
( 4 ) that the tribunal will determine the rights of the parties in
an impartial and judicial manner with the tribunal owing an
equal obligation of fairness towards both sides,
( 5 ) that the agreement of the parties to refer their disputes to
the decision of the tribunal must be intended to be enforceable
in law and lastly,
( 6 ) the agreement must contemplate that the tribunal will
make a decision upon a dispute which is already formulated at
the time when a reference is made to the tribunal.
18. The other factors which are relevant include, whether the
agreement contemplates that the tribunal will receive evidence from
both sides and hear their contentions or at least give the parties an
opportunity to put them forward; whether the wording of the
agreement is consistent or inconsistent with the view that the
process was intended to be an arbitration, and whether the
agreement requires the tribunal to decide the dispute according to
law.

5
(1980) 4 SCC 536
6
(1998) 3 SCC 573
8


15. It would further be apposite to refer to Jagdish Chander v. Ramesh
7
Chander where this Court has succinctly encapsulated the law on
the point. The relevant passage therefrom reads:
8. This Court had occasion to refer to the attributes or essential
elements of an arbitration agreement in K.K. Modi v. K.N. Modi
[(1998) 3 SCC 573] , Bharat Bhushan Bansal v. U.P. Small Industries
Corpn. Ltd. [(1999) 2 SCC 166] and Bihar State Mineral Development
Corpn. v. Encon Builders (I) (P) Ltd. [(2003) 7 SCC 418] In State of
Orissa v. Damodar Das [(1996) 2 SCC 216] this Court held that a
clause in a contract can be construed as an “arbitration agreement”
only if an agreement to refer disputes or differences to arbitration is
expressly or impliedly spelt out from the clause. We may at this
juncture set out the well-settled principles in regard to what
constitutes an arbitration agreement:
(i) The intention of the parties to enter into an arbitration
agreement shall have to be gathered from the terms of the
agreement. If the terms of the agreement clearly indicate an
intention on the part of the parties to the agreement to refer
their disputes to a private tribunal for adjudication and a
willingness to be bound by the decision of such tribunal on
such disputes, it is arbitration agreement. While there is no
specific form of an arbitration agreement, the words used
should disclose a determination and obligation to go to
arbitration and not merely contemplate the possibility of going
for arbitration. Where there is merely a possibility of the
parties agreeing to arbitration in future, as contrasted from an
obligation to refer disputes to arbitration, there is no valid and
binding arbitration agreement.
(ii) Even if the words “arbitration” and “Arbitral Tribunal (or
arbitrator)” are not used with reference to the process of
settlement or with reference to the private tribunal which has
to adjudicate upon the disputes, in a clause relating to
settlement of disputes, it does not detract from the clause
being an arbitration agreement if it has the attributes or
elements of an arbitration agreement. They are: (a) The
agreement should be in writing. (b) The parties should have
agreed to refer any disputes (present or future) between them
to the decision of a private tribunal. (c) The private tribunal
should be empowered to adjudicate upon the disputes in an
impartial manner, giving due opportunity to the parties to put
forth their case before it. (d) The parties should have agreed

7
(2007) 5 SCC 719
9


that the decision of the private tribunal in respect of the
disputes will be binding on them.
(iii) Where the clause provides that in the event of disputes
arising between the parties, the disputes shall be referred to
arbitration, it is an arbitration agreement. Where there is a
specific and direct expression of intent to have the disputes
settled by arbitration, it is not necessary to set out the
attributes of an arbitration agreement to make it an arbitration
agreement. But where the clause relating to settlement of
disputes, contains words which specifically exclude any of the
attributes of an arbitration agreement or contains anything
that detracts from an arbitration agreement, it will not be an
arbitration agreement. For example, where an agreement
requires or permits an authority to decide a claim or dispute
without hearing, or requires the authority to act in the
interests of only one of the parties, or provides that the
decision of the authority will not be final and binding on the
parties, or that if either party is not satisfied with the decision
of the authority, he may file a civil suit seeking relief, it cannot
be termed as an arbitration agreement.
(iv) But mere use of the word “arbitration” or “arbitrator” in a
clause will not make it an arbitration agreement, if it requires
or contemplates a further or fresh consent of the parties for
reference to arbitration. For example, use of words such as
“parties can, if they so desire, refer their disputes to
arbitration” or “in the event of any dispute, the parties may
also agree to refer the same to arbitration” or “if any disputes
arise between the parties, they should consider settlement by
arbitration” in a clause relating to settlement of disputes,
indicate that the clause is not intended to be an arbitration
agreement. Similarly, a clause which states that “if the parties
so decide, the disputes shall be referred to arbitration” or “any
disputes between parties, if they so agree, shall be referred to
arbitration” is not an arbitration agreement. Such clauses
merely indicate a desire or hope to have the disputes settled
by arbitration, or a tentative arrangement to explore
arbitration as a mode of settlement if and when a dispute
arises. Such clauses require the parties to arrive at a further
agreement to go to arbitration, as and when the disputes arise.
Any agreement or clause in an agreement requiring or
contemplating a further consent or consensus before a
reference to arbitration, is not an arbitration agreement, but
an agreement to enter into an arbitration agreement in future.
(emphasis ours)
What, therefore, follows from the above passage is that the mere use
of the word “arbitration” is not sufficient to treat the clause as an
10


arbitration agreement when the corresponding mandatory intent to
refer the disputes to arbitration and the consequent intent to be
bound by the decision of the arbitral tribunal is missing.
16. A similar issue arose before this Court in Mahanadi Coalfields Ltd.
8
v. IVRCL AMR Joint Venture . The clause in question therein was
as follows:
“ 15. Settlement of Disputes/Arbitration:
15.1. It is incumbent upon the contractor to avoid litigation and
disputes during the course of execution. However, if such disputes
take place between the contractor and the department, effort shall
be made first to settle the disputes at the company level. The
contractor should make request in writing to the Engineer-in-Charge
for settlement of such disputes/claims within 30 (thirty) days of
arising of the case of dispute/claim failing which no disputes/claims
of the contractor shall be entertained by the company.
15.2. If differences still persist, the settlement of the dispute with
government agencies shall be dealt with as per the Guidelines issued
by the Ministry of Finance, Government of India in this regard. In
case of parties other than government agencies, the redressal of the
disputes may be sought in the court of law.”
The Court held that the mere use of the word “Arbitration” in the title
of the clause without any corresponding substantive part relating to
arbitration could not be considered a valid arbitration agreement
under Section 7 of the A&C Act.
17. The above rulings lead us to the irresistible conclusion that mere use
of the word “arbitration” in a clause of an agreement is not clinching
or decisive. Section 7 presupposes an express intention of the

8
(2022) 20 SCC 636
11


dispute/difference being resolved through arbitration and mere
reference to the term is not sufficient to meet this threshold. The A&C
Act acknowledges the existence of an arbitration agreement based on
its substance rather than its form. Regardless of the formal structure,
effect has to be given to an arbitration agreement in essence.
Arbitration being the creature of a contract, the ad idem intention of
the parties is paramount to determine whether there exists a valid
arbitration agreement. That being said, the invocation of the word
“arbitration” nonetheless provides, at the very least, a discernible
clue to the parties’ underlying intention.
18. The exercise of legal drafting partakes equally of art, science and
logic, but we fear that Clause 8.28 does not seem to show allegiance
to any. Be that as it may, the task of interpreting the clause is
embarked upon bearing in mind the authoritative rulings in the field.
19. Clause 8.28 of the Agreement states that the parties must first
attempt to negotiate the dispute in good faith. This part of the clause
is admittedly not disputed in its meaning. The next part of the clause
specifies that if the negotiation fails, then the parties would be
obligated to mediate in the stated procedure and is then followed by
the punctuation (:) colon, following which it prescribes that any
dispute arising out of or relating in any way to the Agreement shall
be resolved by “arbitration” through senior management comprising
respective Chairmen of the two parties (Arbitrators). Moreover, the
agreement further stipulates that should the dispute not be resolved
12


within fifteen (15) days after the proposed “arbitration”, the
complaining party shall seek remedies through the courts of law.
20. The word “arbitration” apart from appearing in the title of the relevant
clause has been used 3 (three) times in the body of the clause. It is
but obvious that the appellant has sought to rely on this inclusion of
the word within the clause to submit that it forms an arbitration
agreement.
21. Is mere repetitive use of the word “arbitration” clinching/decisive? It
is now time to ascertain in line with the aforesaid decisions, whether
the parties’ intention was indeed to arbitrate, or merely to delineate
a structured process of mediation.
22. Since, at this stage, we are reminded of the decision in the case of
Bangalore Electricity Supply Co. Ltd. v. E.S. Solar Power (P)
9
Ltd. , it would be apt to note what was observed. There occurs an
interesting passage of what the Court should be minded about while
gathering the intentions of the parties in a clause of the contract. It
was observed:
17. The duty of the court is not to delve deep into the intricacies of
human mind to explore the undisclosed intention, but only to take
the meaning of words used i.e. to say expressed intentions [ Kamla
Devi v. Takhatmal Land , (1964) 2 SCR 152 : AIR 1964 SC 859]. In
seeking to construe a clause in a contract, there is no scope for
adopting either a liberal or a narrow approach, whatever that may
mean. The exercise which has to be undertaken is to determine what
the words used mean. It can happen that in doing so one is driven
to the conclusion that clause is ambiguous, and that it has two
possible meanings. In those circumstances, the court has to prefer
one above the other in accordance with the settled principles. If one
meaning is more in accord with what the court considers to be the

9
(2021) 6 SCC 718
13


underlined purpose and intent of the contract, or part of it, than the
other, then the court will choose the former or rather than the
latter [ Ashville Investments Ltd. v. Elmer Contractors Ltd. , 1989 QB
488 : (1988) 3 WLR 867 : (1988) 2 All ER 577 (CA)]. The intention
of the parties must be understood from the language they have used,
considered in the light of the surrounding circumstances and object
of the contract. [ Bank of India v. K. Mohandas , (2009) 5 SCC 313 :
(2009) 2 SCC (Civ) 524 : (2009) 2 SCC (L&S) 32] . Every contract is
to be considered with reference to its object and the whole of its
terms and accordingly the whole context must be considered in
endeavouring to collect the intention of the parties, even though the
immediate object of inquiry is the meaning of an isolated
clause. Bihar SEB v. Green Rubber Industries [ Bihar SEB v. Green
Rubber Industries , (1990) 1 SCC 731] .
23. In a catena of decisions, this Court has ruled that, in essence, an

arbitration agreement should have an element of the nature of finality
to refer the matters to arbitration. To name a few, one may make a
reference to the decisions made in the cases of Wellington
10
Associates Ltd. v. Kirit Mehta , Bihar State Mineral
11
Development Corporation v. Encon Builders , BGM and M-
12
RPL-JMCT (JV) v. Eastern Coalfields Limited , K.K. Modi
(supra) and Mahanadi (supra).
24. In Jagdish Chander (supra), this Court discussing a similar situation
as is in the present case, observed that when an agreement provides
that the decision of the authority will not be final and binding on the
parties, or that if either party is not satisfied with the decision of the
authority, he may file a civil suit seeking relief, it cannot be termed
as an arbitration agreement. That is precisely the case here.

10
(2000) 4 SCC 272
11
(2003) 7 SCC 418
12
2025 SCC OnLine SC 1471
14


25. Upon a perusal of Clause 8.28, we are of the view that there is no
indication that the proposed “arbitration” was supposed to be final
and binding. In fact, the penultimate sentence of the clause stipulates
that should the dispute not be resolved within fifteen (15) days after
arbitration, the complaining party shall seek remedies through the
courts of law. This suggests an attempt at amicable resolution inter
se rather than a definitive submission to arbitration, failing which the
party has the option to proceed to the courts of law.
26. Lastly, the individuals designated as “arbitrators” under the clause
are the respective Chairmen of the parties themselves. Ordinarily,
arbitration contemplates reference to a neutral third party, a process
supported by Section 12 read with the Seventh Schedule of the A&C
Act. Here, however, the mechanism envisaged is akin to an internal
settlement process between the Chairmen of the two companies.
While this does not ipso facto disqualify the clause from being an
arbitration agreement—since this may be waived under the proviso
to Section 12(5)—it remains a significant circumstance in discerning
the true intention of the parties.
27. In our view, Clause 8.28 of the Agreement does not evince an
intention to refer disputes to arbitration, for the above-mentioned
reasons.
28. Before we part, one other interesting point that has been raised is to
be looked into. Whether the non-denial of the arbitration agreement
by the respondent in the correspondence between the parties post
15


the notice being issued by the respondent would have any bearing
upon the decision to refer the parties to arbitration.
29. In Powertech World Wide Ltd. v. Delvin International General
13
Trading LLC , this Court no doubt took the view that
correspondence post issuance of the notice for arbitration can be a
factor to determine the intention of the parties. The pertinent
passage is extracted hereunder:
29. Thus, any ambiguity in the arbitration clause contained in the
purchase contract stood extinct by the correspondence between the
parties and the consensus ad idem in relation to the existence of an
arbitration agreement and settlement of disputes through arbitration
became crystal clear. The parties obviously had committed to settle
their disputes by arbitration, which they could not settle, as claims
and counterclaims had been raised in the correspondence exchanged
between them. In view of the above, even the precondition for
invocation of an arbitration agreement stands satisfied.

However, a closer perusal of the decision reveals that the decision
stands on a much different footing. The respondent therein had in
effect consented to the arbitration by stating that they wish to
appoint a different arbitrator than the one proposed. No such
correspondence exists in the present case. For ease of reference,
paragraph 28 of the decision observes:
… the respondent had neither denied the existence nor the binding
nature of the arbitration clause. On the contrary, it had requested
the petitioner not to take any legal action for appointment of an
arbitrator, as they wanted to suggest some other name as an
arbitrator, that too, subject to the consent of the petitioner . This
letter conclusively proves that the respondent had admitted the
existence of an arbitration agreement between the parties and
consented to the idea of appointing a common/sole arbitrator to
determine the disputes between the parties. However, thereafter
there had been complete silence from its side, necessitating the filing

13
(2012) 1 SCC 361
16

30. In the case of Visa International Ltd. v. Continental Resources
14
(USA) Ltd. , this Court relying on the correspondence between the
parties held that this proves the existence of the arbitration
agreement. This decision too can be distinguished on similar lines as
in that case, in response to the applicant's letter invoking the
arbitration clause, the respondent merely objected to the names of
the arbitrators inter alia contending that the suggested arbitration
would not be cost-effective and the demand for arbitration itself was
a premature one and there was no denial of an arbitration agreement
by the respondent therein.
31. In the instant case, we agree that there has indeed been no denial of
the existence of an arbitration agreement by the respondent in its
responses to the notice issued by the appellant. However, here, when
there has indeed been no arbitration agreement in the first place,
therefore, subsequent correspondence between the parties cannot
displace the original intention. Such correspondence would have
indeed been sufficient to displace the original intention if it was
unequivocally clear about referring the disputes to arbitration, i.e.,
the test mentioned under Section 7 of the A&C Act, which does not
exist in the instant case. Once we take the view that there has, in

14
(2009) 2 SCC 55
17


fact, been no arbitration agreement in the first place, there exists no
option available to the appellant other than approaching the courts of
law.
C ONCLUSION
32. The impugned final judgment and order of the High Court is affirmed
and the appeal is consequently dismissed.
33. Appellant is free to seek remedy in accordance with law before the
competent civil court. If the benefit of Section 14 of the Limitation
Act, 1963 is claimed, the relevant court may decide such claim
appropriately.
34. Parties shall bear their own costs.


………………………………….……J.
(DIPANKAR DATTA)



…………………………….…………J.
(AUGUSTINE GEORGE MASIH)
NEW DELHI;
NOVEMBER 06, 2025.
18