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White Black Legal – International Law Journal · ISSN 2581-8503
When ‘Arbitration’ Isn’t Arbitration- Reconstruction of Section 7 of the Arbitration and Conciliation Act, 1996
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Abstract
WHEN
‘ARBITRATION’ ISN’T ARBITRATION- RECONSTRUCTION OF SECTION 7 OF THE ARBITRATION
AND CONCILIATION ACT, 1996
AUTHORED
BY - AMITABH SAXENA,
RADHIKA
BADERIA & MADHUR ANAND
Abstract
Section
7 of the Arbitration and Conciliation Act, 1996 defines the arbitration
agreement as the jurisdictional foundation of the entire arbitral edifice, yet
Indian courts continue to be confronted with clauses that invoke the vocabulary
of arbitration without embodying its substance. This paper examines the Supreme
Court’s decision in Alchemist Hospitals Ltd. v ICT Health Technology Services
India Pvt. Ltd., in which a dispute-resolution clause that used the word
‘arbitration’ three times was nonetheless held not to constitute a valid
arbitration agreement, because it lacked finality, prescribed an unrealistic
adjudicatory timeline, and nominated the parties’ own chairmen rather than an
impartial third party. The paper situates Alchemist Hospitals within a wider
2025-2026 trilogy of decisions from South Delhi Municipal Corporation v SMS
Ltd. and Nagreeka Indcon Products Pvt. Ltd. v Cargocare Logistics (India) Pvt.
Ltd. that collectively mark a
discernible recalibration of Indian arbitration jurisprudence away from an
expansive, pro-arbitration presumption and toward a textual, intention-centred
inquiry. It further traces the doctrinal lineage from Rukmanibai Gupta and K.K.
Modi v K.N. Modi through Jagdish Chander v Ramesh Chander, compares the Indian
position with English and Singaporean approaches in Fiona Trust & Holding
Corp. v Privalov and Insigma Technology Co. Ltd. v Alstom Technology Ltd., and
evaluates the pending Draft Arbitration and Conciliation (Amendment) Bill, 2024
for its bearing on these questions. The paper concludes that while the
substance-over-form doctrine promotes drafting discipline and reduces satellite
litigation over the years, it also imposes a heightened burden of textual
precision that Indian transactional lawyers must now internalise.
Introduction
Arbitration
derives its entire legitimacy from consent. Unlike litigation, which is a right
conferred by the sovereign upon every citizen, arbitration is a creature of
contract, parties must affirmatively agree to exclude the jurisdiction of civil
courts and submit their disputes to a private adjudicatory forum. Section 7 of
the Arbitration and Conciliation Act, 1996[1]
(Herein after referred to as ‘A&C Act’) codifies this consensual foundation
by defining an ‘arbitration agreement’ as 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. Every subsequent stage of the arbitral process, the appointment of
arbitrators under Section 11,[2]
the tribunal’s competence to rule on its own jurisdiction under Section 16,[3]
and the eventual enforcement of the award under Sections 34 and 36,[4] is
contingent upon the anterior existence of a Section 7 compliant agreement. If
the foundation is defective, the entire edifice built upon it collapses.
The
difficulty, however, is that commercial parties frequently draft
dispute-resolution clauses in a hurried, formulaic, or internally inconsistent
manner, borrowing the vocabulary of arbitration while structuring a process
that bears none of its essential attributes. Indian courts have therefore had
to develop, on a case-by-case basis, a set of indicative tests to distinguish a
genuine arbitration agreement from a clause that merely uses the word
‘arbitration’ as a label.[5]
This inquiry reached a significant inflection point in 2025 and 2026, when the
Supreme Court decided a trilogy of cases from South Delhi Municipal
Corporation v SMS Ltd.,[6] Alchemist
Hospitals Ltd. v ICT Health Technology Services India Pvt. Ltd.,[7] and Nagreeka
Indcon Products Pvt. Ltd. v Cargocare Logistics (India) Pvt. Ltd.[8] that collectively
re-drew the boundary of what qualifies as an arbitration agreement under
Section 7. This paper undertakes a comprehensive doctrinal and comparative
analysis of this jurisprudence, situating Alchemist Hospitals as the analytical
centrepiece while drawing out its continuities with earlier precedent, its
relationship with contemporaneous decisions, its resonance with international
arbitration law, and its implications for the pending legislative reform of the
A&C Act.
The
Statutory Architecture of Section 7
Section
7(1) of the A&C Act defines an arbitration agreement in broad and
functional terms, requiring only that the parties agree to submit present or
future disputes arising out of a defined legal relationship to arbitration.
Section 7(2) permits the agreement to take the form of an arbitration clause
within a contract or a separate agreement, and Section 7(4) prescribes the
formal requirement that the agreement be in writing, whether contained in a
document signed by the parties, exchanged in correspondence, or referenced in a
manner that incorporates the clause by reference. Notably, the statute does not
prescribe any particular form of words. As the Supreme Court reiterated in Alchemist
Hospitals, drawing upon the earlier decision in Rukmanibai Gupta v
Collector, Jabalpur,[9]
Section 7 does not require an arbitration agreement to conform to any specific
linguistic template, what it requires is compliance with the substantive
ingredients the provision itself lays down.
This
deliberately open-textured drafting reflects the legislature’s intention to
accommodate the diversity of commercial practice, but it has also generated
decades of litigation over what, precisely, those substantive ingredients are.
Three ingredients recur across the case law and have now been synthesised most
clearly in South Delhi Municipal Corporation v SMS Ltd.[10]
first, being a clear and mutual intent to arbitrate that excludes the
jurisdiction of civil courts over the relevant disputes and second, a binding
adjudicatory process rather than a non-binding conciliatory or negotiatory
mechanism and third, a structural conformity with the accepted attributes of
arbitration, including the neutrality of the decision-maker and the finality of
the decision rendered. It is against this statutory and doctrinal backdrop that
the Alchemist Hospitals dispute arose.
The
Pre-Alchemist Jurisprudence- Building the Substance-Over-Form Test
In
Rukmanibai Gupta v Collector, Jabalpur,[11]
the Supreme Court held that no particular form of words is necessary to
constitute an arbitration agreement, provided the substance of the clause
discloses an intention to refer disputes to a private tribunal for binding
decision. This decision established the foundational principle, later
reaffirmed in Alchemist Hospitals, that courts must look past the label
attached to a clause and examine its substantive content.
Subsequently,
K.K. Modi v K.N. Modi[12] remains the most
frequently cited authority on the indicia of a valid arbitration agreement. The
Court held that among the attributes that must ordinarily be present are, that
the tribunal’s decision will bind the parties and that the tribunal’s jurisdiction
derives from party consent, a court order, or statute and the tribunal will
determine the substantive rights of the parties, that the tribunal will act
impartially and judicially, owing an equal obligation of fairness to both
sides, that the reference is intended to be enforceable in law and that the
tribunal will decide a dispute that is already formulated at the time of
reference, rather than acting merely to avoid future disagreement. The Court
also emphasised subsidiary indicators over whether the tribunal receives
evidence from both sides, whether the wording is consistent with an arbitral
rather than an expert-determination process, and whether the tribunal is
required to decide according to law. Crucially, K.K. Modi held that
nomenclature used by the parties is not conclusive and courts must examine the
true intent and purport of the agreement.
Additionally,
in Jagdish Chander v Ramesh Chander[13] refined the K.K.
Modi factors into a more operational test, holding that the use of the
words ‘arbitration’ or ‘arbitrator’ is not, by itself, determinative, just as
the absence of those words does not necessarily negate an arbitral intention.
The Court held that what matters is whether the parties intended to refer the
dispute to a private tribunal willing to undertake an adjudicatory role, whose
decision the parties agreed, expressly or by necessary implication, to accept
as final and binding. Significantly for the analysis in Alchemist Hospitals,
Jagdish Chander held that a clause reserving to a party the liberty to
subsequently approach a civil court cannot be construed as an arbitration
agreement, since such a reservation is fundamentally at odds with the
exclusionary character of arbitration.
Furthermore
invoking the Bangalore Electricity Supply Company line of authority, the
Supreme Court in Alchemist Hospitals reaffirmed the cardinal principle of
contractual interpretation that a court’s task is to ascertain the intention of
the parties as expressed through the words actually used, not to speculate upon
undisclosed or subjective states of mind. The Court explicitly declined to
adopt either a liberal approach, which would over-emphasise repeated use of the
word ‘arbitration’, or a narrow approach, which would disregard it altogether.
The correct method, the Court held, is a textual and contextual reading
confined to the four corners of the agreement, an interpretive discipline that
anchors the entire substance-over-form doctrine and prevents it from collapsing
into unguided judicial discretion.
Alchemist
Hospitals Ltd. v ICT Health Technology Services India Pvt. Ltd.
The
dispute arose out of a Software Implementation Agreement executed in November
2018 between Alchemist Hospitals Ltd. (‘AHL’), a Panchkula-based hospital, and
ICT Health Technology Services India Pvt. Ltd. (‘ICT’), for the installation of
ICT’s hospital-management platform, ‘HINAI Web’, intended to digitise billing,
diagnostics, and patient records. AHL alleged that the software repeatedly
malfunctioned, causing operational disruption. In late 2023, AHL invoked Clause
8.28 of the Agreement, proposing a mediation meeting between the respective
chairmen of the two companies and simultaneously seeking the appointment of a
sole arbitrator. ICT responded by requesting an additional test run rather than
engaging with the arbitration proposal. AHL thereafter approached the High
Court of Punjab and Haryana under Section 11(6) of the A&C Act for the
appointment of an arbitrator.
The
High Court dismissed the petition, holding that Clause 8.28 was not a
valid arbitration agreement because the parties never intended to refer their
disputes to private or independent adjudicators, nor did they intend the
decision of the two chairmen to bind them. AHL appealed to the Supreme Court,
framing the central question as whether Clause 8.28 constituted a valid
arbitration agreement under the A&C Act. In its judgment delivered on 6
November 2025, the Supreme Court affirmed the High Court’s view and dismissed
the appeal, while granting AHL liberty to pursue its claims before a competent
civil court and clarifying that any application for exclusion of time under
Section 14 of the Limitation Act, 1963[14]
could be adjudicated on its merits by that court. The Court held decisively
that the jurisprudential essence of Section 7 lies in identifying substantive
intent rather than semantic cues, that the parties consciously elected
arbitration as their dispute-resolution mechanism and agreed to be bound by it.
Deconstructing
Clause 8.28 of the Agreement
Clause
8.28, titled ‘Dispute Resolution and Arbitration’, established a three-stage
process which is, first, a good-faith negotiation between senior executives and
second, if unsuccessful, a move to mediation, and third, a stipulation that any
dispute ‘shall be resolved by arbitration through senior management
comprising respective Chairmen of the two parties (Arbitrators)’.
Critically, the clause further provided that if the dispute remained unresolved
within fifteen days, the complaining party would be entitled to seek remedies
through the courts of law. The Supreme Court observed that the clause did not
show allegiance to any of the core disciplines of legal drafting, signifying
that it was not merely poorly worded but fundamentally unsound in structure.
Therefore three distinct infirmities emerge from the Court’s reasoning.
1. Absence
of Finality
An
arbitration agreement must contemplate that the tribunal’s decision will be
final and binding upon the parties. Clause 8.28 not only failed to state that
the chairmen’s decision would be final, it expressly preserved a right to
approach the courts if the internal process failed within the stipulated
period. This is the very reservation that Jagdish Chander held to be
incompatible with a genuine arbitration agreement a clause that keeps the
courthouse door open cannot simultaneously claim to have closed it through
arbitration.
2.
An Unrealistic Adjudicatory Timeline
The
Court held that the fifteen-day window prescribed by Clause 8.28 was indicative
of a negotiation or mediation timeframe, not a formal arbitral proceeding
involving the leading of evidence and the rendering of a reasoned award. On
this basis, the Court concluded that the parties never manifested the requisite
animus arbitrandi, the intention to be legally bound by the decision of
a private tribunal, because no genuine arbitral process could realistically be
conducted, evidence examined, and a reasoned award rendered within so
compressed a period.
3.
Absence of an Impartial Adjudicator
Section
12,[15]
read with the Seventh Schedule of the A&C Act, requires that persons
appointed as arbitrators satisfy standards of independence and impartiality,
and ordinarily excludes individuals with a proximate relationship to a party
from acting as arbitrator absent an express waiver under Section 12(5). Clause
8.28 designated the parties’ own chairmen, plainly interested representatives
of each side, as ‘arbitrators’. The Court clarified that this feature alone
would not necessarily invalidate an arbitration agreement, since Section 12(5)
permits parties to waive the independence requirement by express written
agreement after disputes have arisen. However, in the absence of any such
express waiver, the designation of the chairmen was read by the Court as
further evidence that the parties intended an internal settlement mechanism
rather than a genuine third-party adjudication.
Applying
the K.K. Modi and Jagdish Chander factors systematically to these
three infirmities, the Court concluded that Clause 8.28 lacked binding
finality, an impartial tribunal, and an intention for enforceable legal
resolution, and therefore failed to satisfy the statutory threshold under Section
7. The judgement thus stands for the broader proposition that contractual
autonomy permits parties to design their own dispute-resolution process, but
does not permit them to affix the legal label ‘arbitration’ to a process that
lacks arbitration’s essential characteristics. Therefore, autonomy, in other
words, does not extend to redefining a statutory term of art.
Consolidating
the Substance-Over-Form Doctrine
Alchemist
Hospitals did not emerge in isolation. It forms part of a
closely bunched sequence of Supreme Court decisions, commentators have
described it as a trilogy that, taken together, substantially recalibrated the
threshold inquiry under Section 7.
1. South
Delhi Municipal Corporation v. SMS Ltd.
Decided
on 15 May 2025 by a bench of Justices Surya Kant and N. Kotiswar Singh, South
Delhi Municipal Corporation v SMS Ltd. arose from three separate concession
agreements between municipal corporations of Delhi and private contractors for
the development of parking and commercial complexes, each containing an Article
20 dispute-resolution clause of doubtful arbitral character. The Court declined
to treat Article 20 as an arbitration agreement, holding that a valid
arbitration agreement must reflect a clear and mutual intent to arbitrate, must
entail a binding adjudicatory process, and must align with well-established
norms of contemporary arbitration.
Applying
this test, the Court therefore, found that Article 20 referred to conciliation
rather than adjudication, conspicuously omitted the words ‘arbitrator’ or
‘arbitration’, contemplated a decision by the Municipal Commissioner rather
than an independent third party, and afforded the private contractor no role in
selecting the decision-maker. The Court further noted that the contractors’ own
pre-litigation conduct, including a legal notice that expressly acknowledged
the absence of an arbitration agreement, and a statutory notice under Section
80 of the Code of Civil Procedure, 1908,[16]
which presupposes recourse to a civil suit, undercut any subsequent claim that
arbitration had been agreed. Perhaps most strikingly, the Court expressed
strong disapproval of deliberately ambiguous drafting of dispute-resolution
clauses and called upon courts to consider invoking suo motu powers,[17]
including personal accountability for legal professionals found to have
engineered misleading clauses to prolong litigation.
2. Nagreeka
Indcon Products Pvt. Ltd. v. Cargocare Logistics (India) Pvt. Ltd.
The
most recent instalment in the trilogy, decided on 17 April 2026 by Justices
Sanjay Karol and N. Kotiswar Singh, concerned a bill of lading issued in
connection with the carriage of aluminium-foil containers from India to South
Carolina, USA. Clause 25 of the bill of lading provided that disputes ‘can
be settled by arbitration in India or a place mutually agreed’. When a
dispute arose over the release of cargo without production of the original bill
of lading or receipt of payment, Nagreeka invoked Clause 25 and sought
appointment of a sole arbitrator under Section 11, Cargocare resisted,
contending that the clause was merely permissive. The Supreme Court agreed with
Cargocare, holding that the word ‘can’ connotes mere possibility rather than a
mandatory obligation, and that arbitral jurisdiction must derive from
unequivocal party consent expressed in clear contractual terms rather than by
implication. The Bombay High Court’s refusal to appoint an arbitrator was
accordingly upheld. The decision crystallises a linguistic dimension of the
substance-over-form inquiry, permissive auxiliary verbs such as ‘can’ or ‘may’
will ordinarily be read as leaving arbitration optional, whereas mandatory
language such as ‘shall’ is required to establish a binding reference.
Hence,
reading together, South Delhi Municipal Corporation, Alchemist Hospitals,
and Nagreeka Indcon articulates a composite three-ingredient test for a
valid arbitration agreement under Section 7, which is (i) a clear and
mutual intent to arbitrate that excludes recourse to civil courts, expressed in
mandatory rather than permissive language (ii) a binding adjudicatory
process featuring finality and a realistic procedural timeline and (iii)
structural conformity with accepted arbitral norms, including the neutrality of
the decision-maker. This composite test, synthesised in decisions rendered
within roughly eleven months of one another, represents the most significant
doctrinal consolidation of Section 7 jurisprudence since Jagdish Chander
in 2007.
The
Effect of Subsequent Correspondence and Conduct
A
distinct but related question addressed in Alchemist Hospitals concerns
the evidentiary weight of post-dispute correspondence. Indian courts have, in a
range of cases, inferred the existence of an arbitration agreement from
commercial correspondence, exchanged emails or telex messages, or clauses
embedded in invoices, even absent a freestanding arbitration clause, an
approach reflective of the broader pro-arbitration judicial trend that seeks to
encourage commercial parties toward arbitration and to strengthen India’s
standing as an arbitration-friendly jurisdiction. The precondition for such an
inference is that the correspondence itself must evidence mutual consent to
arbitrate, whether express or capable of being derived by necessary
implication.
In
Alchemist Hospitals, AHL argued that ICT’s failure to deny the existence
of an arbitration agreement in its post-notice correspondence should be treated
as an admission. The Supreme Court rejected this contention, holding that
subsequent correspondence can only displace or clarify an original agreement
where the underlying contract already contains an arbitration clause whose
meaning is ambiguous, correspondence cannot conjure into existence an
arbitration agreement where the original contract reveals a fundamental absence
of arbitral intent. Since Clause 8.28 was not an arbitration agreement in the
first place, the question of resolving ambiguity through subsequent conduct did
not arise, and mere non-denial, as opposed to an affirmative statement of intent
to arbitrate, could not cure that deficiency. This holding usefully delineates
the outer limit of the pro-arbitration inference, conduct can rescue an
ambiguous but existing agreement, but it cannot manufacture consent that was
never given.
Comparative
and International Perspective
The
question of whether a clause reflects a genuine intention to arbitrate, as
opposed to a hybrid or aspirational dispute-resolution mechanism, is not unique
to India. As cross-border commercial disputes are increasingly channelled
toward arbitration, most major arbitration-friendly jurisdictions have
developed comparable, intent-centred interpretive frameworks, though they
differ in the presumption they apply when a clause is genuinely ambiguous.
1. England-
The Fiona Trust Presumption
The
House of Lords’ decision in Fiona Trust & Holding Corp. v Privalov[18] articulated a
strong interpretive presumption in favour of arbitration, where commercial
parties have entered into an arbitration agreement, courts should construe it
so as to give effect to the parties’ reasonable commercial expectation that
disputes arising from their relationship be resolved in a single forum, unless
the language of the clause clearly excludes certain categories of dispute from
the arbitrator’s jurisdiction. The Fiona Trust approach thus begins from
a presumption of jurisdictional breadth once an arbitration agreement is found
to exist, and resolves ambiguities in favour of arbitrability.
2. Singapore-
Insigma Technology and the Pro-Enforcement Ethos
The
Singapore International Commercial Court’s approach in Insigma Technology
Co. Ltd. v Alstom Technology Ltd.[19] similarly directs
that all reasonable efforts be made to give effect to a demonstrated party
intention to arbitrate, even where the clause imperfectly names an arbitral
institution or procedural rules. Significantly, however, the arbitration clause
considered in Insigma expressly stated the parties’ preference for arbitration
over litigation and provided for the finality of the award, features
conspicuously absent from Clause 8.28 in Alchemist Hospitals, which by
contrast expressly preserved a right to litigate. The comparison illustrates
that Insigma’s generous, pro-enforcement construction was possible only
because the foundational intent to arbitrate, and the finality of the process,
were never in doubt, the ambiguity there concerned mechanics, not substance.
3. The
UNCITRAL Model Law and the New York Convention
Article
7 of the UNCITRAL Model Law on International Commercial Arbitration,[20]
upon which the A&C Act is substantially based, similarly requires that an
arbitration agreement record the parties’ intention to submit to arbitration
disputes arising out of a defined legal relationship, and Article II of the New
York Convention, 1958[21]
requires contracting states to recognise a written agreement under which
parties undertake to submit disputes to arbitration. Neither instrument
prescribes particular language, mirroring the Indian position that no
talismanic form of words is necessary. This convergence at the level of
foundational text thud highlights that the Indian judiciary’s
substance-over-form method is not an idiosyncratic domestic innovation but a
considered application of principles common to the broader international
arbitration order.
A
Doctrinal Distinction Worth Noting
What
distinguishes the Alchemist Hospitals-Nagreeka-South Delhi Municipal
Corporation line from the more permissive English and Singaporean
approaches is the point in the analysis at which the pro-arbitration
presumption is triggered. English and Singaporean courts apply their
pro-arbitration presumption once the threshold question, does an arbitration
agreement exist at all, has been answered affirmatively, the presumption then
operates to construe the scope of that agreement generously. Indian courts, by
contrast, apply exacting scrutiny at the threshold stage itself, before any
presumption in favour of arbitrability comes into play. This is a defensible
allocation of interpretive effort, a liberal construction of an agreement’s
scope serves the goal of comprehensive dispute resolution in a single forum,
whereas a liberal construction of the agreement’s very existence risks
compelling unwilling parties into a private process to which they never truly
consented. The 2025-2026 trilogy therefore represents less a departure from international
norms than a more granular articulation of where, within the interpretive
sequence, the pro-arbitration principle is properly deployed.
Legislative
Developments- The Draft Arbitration and Conciliation (Amendment) Bill, 2024
The
judicial recalibration described above is unfolding alongside a parallel
legislative reform process. Following the report submitted on 7 February 2024
by the Expert Committee on Arbitration Law, chaired by Dr. T.K. Viswanathan,
the Department of Legal Affairs released the Draft Arbitration and Conciliation
(Amendment) Bill, 2024 on 18 October 2024 for public consultation. Building on
earlier amendments enacted in 2015, 2019, and 2021, the Draft Bill proposes
several changes with direct or indirect bearing on the Section 7 inquiry
discussed in this paper.
•
Renaming the statute from the “Arbitration
and Conciliation Act, 1996” to the “Arbitration Act, 1996”, and hiving off
conciliation provisions into the separate Mediation Act framework, a structural
change that would, in effect, sharpen the conceptual line between
mediation-type mechanisms (of the kind found defective in Alchemist
Hospitals and South Delhi Municipal Corporation) and true
arbitration.
•
Introducing a statutory concept of the
“seat” of arbitration under a revised Section 20, intended to end the
long-running seat-versus-venue debate that has generated its own volume of
satellite litigation.
•
Introducing an Appellate Arbitral Tribunal
mechanism under a new Section 34A,[22]
permitting arbitral institutions to offer an internal appellate review of
awards challenged under Section 34, thereby reducing recourse to court.
•
Enhancing the powers of arbitral
institutions, including the power to extend timelines for rendering awards and
to address fee disputes, to encourage a shift from ad hoc to institutional
arbitration.
None
of these proposed provisions directly amends the text of Section 7 itself, and
as of August 2026 the Draft Bill remains before Parliament following public
consultation, without having been enacted into force. Its overall thrust,
however, promoting institutional arbitration, reducing judicial intervention,
and aligning Indian practice with global best practice, is entirely consonant
with, and arguably reinforced by, the judicial insistence in Alchemist
Hospitals and its companion decisions that arbitration agreements be drafted
with precision. A regime that channels more disputes toward institutional
arbitral rules, administered by professional institutions rather than ad hoc
processes cobbled together by commercial parties, is less likely to generate the
kind of internally contradictory, hybrid clause that defeated the appellant in
Alchemist Hospitals.
Conclusion
Therefore,
Alchemist Hospitals Ltd. v ICT Health Technology Services India Pvt. Ltd.
reaffirms, in unusually lucid terms, the Indian judiciary’s settled position on
the interpretation of arbitration agreements, which is that agreement is the
foundation of the entire arbitral process, and if that foundation is defective,
the structure built upon it cannot stand. Because the validity of an
arbitration agreement turns entirely on the mutual intent of the parties, that
is where courts must direct their interpretive energy, not toward the label the
parties chose to attach to their clause. Read alongside South Delhi
Municipal Corporation v. SMS Ltd. and Nagreeka Indcon Products Pvt. Ltd.
v. Cargocare Logistics (India) Pvt. Ltd., the decision forms part of a
coherent and unusually concentrated body of 2025-2026 jurisprudence that has
meaningfully raised the threshold for what will be recognised as a valid
arbitration agreement under Section 7, a threshold measured not by the presence
of the word ‘arbitration’, but by finality, mandatory commitment, procedural
realism, and an impartial decision-maker. This approach places India in
substantial alignment with the interpretive method, if not always the
presumptive generosity, of leading arbitration jurisdictions such as England
and Singapore, and it dovetails with the institutional and procedural reforms
contemplated by the pending Draft Arbitration and Conciliation (Amendment)
Bill, 2024. For legal practitioners, the message carries considerable weight,
which is to draft with precision to reflect a genuine, mutual intent to
arbitrate, or risk costly jurisdictional battles that defeat the very purpose,
efficiency, finality, and party autonomy, that arbitration exists to serve.
[1] Arbitration and Conciliation Act
1996, s 7.
[2] Arbitration and Conciliation Act
1996, s 11.
[3] Arbitration and Conciliation Act
1996, s 16.
[4] Arbitration and Conciliation Act
1996, ss 34, 36.
[5] K K Modi v K N Modi (1998) 3 SCC 573.
[6] South Delhi Municipal
Corporation v SMS Ltd 2025 INSC 1165.
[7] Alchemist Hospitals Ltd v ICT
Health Technology Services India Pvt Ltd 2025 INSC 1289.
[8] Nagreeka Indcon Products Pvt
Ltd v Cargocare Logistics (India) Pvt Ltd 2026 INSC 384.
[9] Rukmanibai Gupta v Collector,
Jabalpur, (1980) 4 SCC 556.
[10] Id.
[11] Id.
[12] Id.
[13] Jagdish Chander v Ramesh Chander,
(2007) 5 SCC 719.
[14] Limitation Act 1963, s 14.
[15] Arbitration and Conciliation Act
1996, s 12, sch 7.
[16] Code of Civil Procedure 1908, s
80.
[17] Supreme Court Bar Association v
Union of India (1998) 4 SCC 409.
[18] Fiona Trust & Holding Corp
v Privalov (2007) UKHL 40.
[19] Insigma Technology Co Ltd v
Alstom Technology Ltd (2009) SGCA 24.
[20] UNCITRAL Model Law on
International Commercial Arbitration 1985 (as amended in 2006), art 7.
[21] Convention on the Recognition and
Enforcement of Foreign Arbitral Awards (adopted 10 June 1958, entered into
force 7 June 1959) art II.
[22] Arbitration and Conciliation Act
1996, proposed s 34A.
How to Cite This Article
AMITABH SAXENA, RADHIKA BADERIA, MADHUR ANAND, When ‘Arbitration’ Isn’t Arbitration- Reconstruction of Section 7 of the Arbitration and Conciliation Act, 1996., White Black Legal – International Law Journal, ISSN: 2581-8503, Vol. Volume 4, Issue VOLUME 4 ISSUE 2, October 2026, pp. 478-492. Available at: https://www.whiteblacklegal.co.in/details/when-arbitration-isnt-arbitration-reconstruction-of-section-7-of-the-arbitration-and-conciliation-act-1996
Author & Publication Record
Authors: AMITABH
SAXENA, RADHIKA
BADERIA & MADHUR ANAND
Registration ID: 107159 | Published Paper ID: WBL7159, WBL7160 & WBL7161
Year: Oct- 2026 | Volume: 4 | Issue: 2
Approved ISSN: 2581-8503 | Country: Delhi, India
Page No.: 478-492
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