The Supreme Court of India has ruled that a dispute resolution clause in a contract, which uses the word “arbitration” but ultimately permits parties to “seek remedies through the courts of law,” does not constitute a valid arbitration agreement under the Arbitration and Conciliation Act, 1996 (“A&C Act”).

In a judgment delivered by Justice Dipankar Datta and Justice Augustine George Masih , the apex court dismissed an appeal filed by M/s Alchemist Hospitals Ltd. against M/s ICT Health Technology Services India Pvt. Ltd., affirming a judgment of the High Court of Punjab & Haryana. The court held that the clause in question lacked the attribute of finality and merely represented a multi-tier process for amicable settlement, not a binding arbitration.

Background of the Case

The dispute

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