Lifewell Diagnostics Private Limited vs Micron Laboratory on 10 April, 2026

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    Delhi High Court

    Lifewell Diagnostics Private Limited vs Micron Laboratory on 10 April, 2026

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                              *         IN THE HIGH COURT OF DELHI AT NEW DELHI
                                                                        Reserved on: 01st April, 2026
                                                                     Pronounced on: 10th April, 2026
                              +         ARB.P. 36/2026
                                        LIFEWELL DIAGNOSTICS PRIVATE LIMITED .....Petitioner
                                                     Through: Mr. Nawaz Sherif, Mr. Rishabh, Mr.
                                                              Arun Prakash, Advs.
                                                              Email:
                                                              [email protected]
    
                                                         versus
    
                                        MICRON LABORATORY                              .....Respondent
                                                    Through:         Mr. Akshay Makhija, Sr. Adv. with
                                                                     Mr. Aayushman Shukla, Adv.
                                                                     Mob: 8860555644
                                                                     Email: [email protected]
    
                                        CORAM:
                                        HON'BLE MS. JUSTICE MINI PUSHKARNA
                                                              JUDGMENT
    

    MINI PUSHKARNA, J.

    1. The present petition has been filed seeking appointment of a sole
    arbitrator under Section 11 of the Arbitration and Conciliation Act, 1996
    (“Arbitration Act“), on the basis of disputes having arisen between the
    parties pertaining to a Revenue Sharing Agreement (“Agreement”) dated
    01st September, 2023, whereby, the petitioner was granted the right to
    operate the pathology lab of the respondent situated at D-10, LGF, Green
    Park, New Delhi, in the name and style of „Micron Laboratory‟.

    SPONSORED

    2. As per the petitioner, issues have arisen between the parties on

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    account of various defaults by the respondent in payment obligations under
    the Agreement, with an outstanding of Rs. 23,93,916/- (Rupees Twenty
    Three Lacs Ninety Three Thousand Nine Hundred Sixteen) being due to the
    petitioner.

    3. The petitioner relies upon Clause 29 of the Agreement, which
    contains the provision for dispute resolution, for seeking appointment of an
    arbitrator. The said Clause 29 of the Agreement reads in the following
    manner:

    “xxx xxx xxx

    xxx xxx xxx”

    4. On the other hand, the respondent has resisted appointment of an

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    arbitrator in the present case by pleading that it is not liable to make any
    payments to the petitioner as both the parties had mutually terminated the
    Agreement on 03rd May, 2024. It was further mutually decided between the
    parties that the account of both the parties will be treated to be settled, and
    accordingly, no party will raise any claim against the other in the future. As
    per the respondent, in terms of the said mutual understanding, no dispute
    survives between the parties.

    5. Further, the respondent has also disputed the Arbitration Clause relied
    upon by the petitioner, on the ground that the same does not constitute a
    binding Arbitration Agreement between the petitioner and the respondent. It
    is the case of the respondent that Clause 29 of the Agreement between the
    parties does not make the recourse to arbitration mandatory, as the use
    of/reference to the phrase „may be referred to the arbitration‟, clearly shows
    that there is no binding Arbitration Agreement between the parties.
    Moreover, in view of the use of the word „may‟, there is no clear intention of
    the parties to submit the disputes between them to arbitration.

    6. Having heard learned counsels for the parties, this Court notes that it
    is a settled legal position that existence of a valid, written Arbitration
    Agreement, which shows the ad idem intention of the parties to submit to
    arbitration as the dispute resolution mechanism, is a sine qua non for
    referring the parties to arbitration.

    7. Section 2(b) of the Arbitration Act defines an Arbitration Agreement
    to mean an Agreement referred to in Section 7 of the Arbitration Act. In
    terms of Section 7 of the Arbitration Act, an Arbitration Agreement is an
    agreement by and between the parties to submit to arbitration, all or certain
    disputes which have arisen or which may arise between them. Further, while

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    Section 7(2) of the Arbitration Act stipulates that an Arbitration Agreement
    may be in the form of Arbitration Clause in a contract or in the form of a
    separate agreement, Section 7(3) of the Arbitration Act clearly states that an
    Arbitration Agreement between the parties shall be in writing.

    8. For the sake of convenience, Section 7 of the Arbitration Act is
    reproduced as under:

    “xxx xxx xxx

    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.

    xxx xxx xxx”

    (Emphasis Supplied)

    9. Outlining the essential elements of an Arbitration Agreement,
    Supreme Court in the case of Bihar State Mineral Development
    Corporation and Another Versus ENCON Builders (I) (P) Ltd., (2003) 7
    SCC 418, has held as follows:

    “xxx xxx xxx

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    13. The essential elements of an arbitration agreement are as
    follows:

    (1) There must be a present or a future difference in
    connection with some contemplated affair.

    (2) There must be the intention of the parties to settle such
    difference by a private tribunal.

    (3) The parties must agree in writing to be bound by the
    decision of such tribunal.

    (4) The parties must be ad idem.

    xxx xxx xxx”

    (Emphasis Supplied)

    10. Underscoring that an Arbitration Agreement must necessarily include
    a clear intent to arbitrate and a binding adjudicatory process, Supreme Court
    in the case of South Delhi Municipal Corporation of Delhi Versus SMS
    Limited, (2026) 1 SCC 545, has held as follows:

    “xxx xxx xxx

    46. Considering the global position on the validity of arbitration
    agreements in tandem with the settled law that holds the field in India,
    we find that the existence of an arbitration agreement necessarily
    postulates the presence of the following ingredients:

    (i) Clear intent to arbitrate
    The agreement must reflect a definitive and mutual intention
    to refer disputes to arbitration, excluding the jurisdiction of civil
    courts in respect of such matters. Consensus ad idem or “meeting of
    the minds” of the respective parties towards settling any disputes
    that may arise between them through the process of arbitration must
    be made out from the form and substance of the legal agreement or
    contract. This ideally entails the parties reducing their intention of
    entering into an arbitration agreement into some tangible medium.

    (ii) Binding adjudicatory process
    The arbitration agreement must contemplate a binding and
    enforceable resolution of disputes. The process must culminate in a
    final and conclusive award, not a non-binding recommendation or
    mediation outcome. In essence, the result of the arbitral process
    should be final and binding on both the parties.

    (iii) Compliance with arbitration norms

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    While the statutory minimums do not universally require
    specification of seat, venue, or applicable procedural rules, best
    practices and several foreign jurisdictions encourage clarity in these
    respects to ensure legal certainty. The agreement should allow for
    party autonomy in the appointment of arbitrators and procedural
    conduct, subject to statutory safeguards. The adversarial process,
    which inheres in the institution of arbitration, must also be given
    due credence via provision for an impartial adjudicatory body,
    whose decisions involve deference to the principles of natural
    justice.

    xxx xxx xxx”

    (Emphasis Supplied)

    11. Likewise, laying down the pre-requisites of a valid and binding
    Arbitration Agreement, Supreme Court in the case of Powertech World
    Wide Limited Versus Delvin International General Trading LLC, (2012) 1
    SCC 361, has held as follows:

    “xxx xxx xxx

    16. Now, I may refer to the prerequisites of a valid and binding
    arbitration agreement leading to an appropriate reference under the
    Act. Section 2(1)(b) defines “arbitration agreement” to be an
    agreement referred to in Section 7. Section 7 of the Act states that an
    “arbitration agreement” is 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. The arbitration agreement may be in the
    form of an arbitration clause in a contract or in the form of a
    separate agreement and shall be an agreement in writing. An
    arbitration agreement is in writing if it is contained in any of the
    clauses i.e. clauses (a) to (c) of sub-section (4) of Section 7 of the
    Act. Once these ingredients are satisfied, there would be a binding
    arbitration agreement between the parties and the aggrieved party
    would be in a capacity to invoke the jurisdiction of this Court under
    Section 11(6) of the Act.

    17. In K.K. Modi v. K.N. Modi [(1998) 3 SCC 573] this Court, while
    differentiating an “arbitration agreement” from a “reference to an
    expert” for decision, contained in an MoU recording a family
    settlement, enumerated the essential attributes of a valid arbitration
    agreement: (SCC p. 584, para 17)
    “(1) The arbitration agreement must contemplate that the

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    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
    the parties must be derived 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. Also in Smita Conductors Ltd. v. Euro Alloys Ltd. [(2001) 7 SCC
    728] where no contract, letter or telegram confirming the contract
    containing the arbitration clause as such was there, but certain
    correspondences which indicated a reference to the contract
    containing arbitration clause for opening the letter of credit addressed
    to the bank, were there. There was also no correspondence between
    the parties disagreeing either with the terms of the contract or the
    arbitration clause. The two contracts also stood affirmed by reason of
    their conduct as indicated in the letters exchanged between the
    parties.
    This Court construed it to be an arbitration agreement in
    writing between the parties and referred to Article II Para 2 of the
    New York Convention, which is in pari materia with Section 7 of the
    Act and observed as under: (Smita Conductors Ltd. case [(2001) 7
    SCC 728], SCC pp. 734-35, para 6)
    “6. What needs to be understood in this context is that
    the agreement to submit to arbitration must be in writing.
    What is an agreement in writing is explained by Para 2 of
    Article II. If we break down Para 2 into elementary parts, it
    consists of four aspects. It includes an arbitral clause (1) in a
    contract containing an arbitration clause signed by the parties,
    (2) an arbitration agreement signed by the parties, (3) an
    arbitral clause in a contract contained in exchange of letters
    or telegrams, and (4) an arbitral agreement contained in
    exchange of letters or telegrams. If an arbitration clause falls

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    in any one of these four categories, it must be treated as an
    agreement in writing.”

    19. This Court, in Bihar State Mineral Development Corpn. v. Encon
    Builders (I) (P) Ltd.
    [(2003) 7 SCC 418] has also taken the view that
    the parties must agree in writing to be bound by the decision of such
    tribunal and they must be ad idem.

    xxx xxx xxx”

    (Emphasis Supplied)

    12. Emphasizing that the deficiency of words in an agreement, which
    otherwise fortifies the intention of the parties to arbitrate their disputes,
    cannot legitimize the annulment of an Arbitration Clause, Supreme Court in
    the case of Babanrao Rajaram Pund Versus Samarth Builders and
    Developers and Another, (2022) 9 SCC 691, has held as follows:

    “xxx xxx xxx

    15. It may be seen that Section 7 of the Act does not mandate any
    particular form for the arbitration clause. This proposition was settled
    by this Court way back in Rukmanibai Gupta v. Collector
    [Rukmanibai Gupta v. Collector, (1980) 4 SCC 556], while viewing
    erstwhile Section 2(a) of the Arbitration Act, 1940 which contained
    the definition of “arbitration agreement”. It was held that: (SCC p.
    560, para 6)
    “6. … Arbitration agreement is not required to be in any
    particular form. What is required to be ascertained is whether
    the parties have agreed that if disputes arise between them in
    respect of the subject-matter of contract such dispute shall be
    referred to arbitration, then such an arrangement would spell
    out an arbitration agreement. A passage from Russell on
    Arbitration, 19th Edn., p. 59, may be referred to with
    advantage:

    If it appears from the terms of the agreement by which a
    matter is submitted to a person’s decision that the intention of
    the parties was that he should hold an inquiry in the nature of a
    judicial inquiry and hear the respective cases of the parties and
    decide upon evidence laid before him, then the case is one of an
    arbitration.”

    xxx xxx xxx

    18. Encon Builders [Bihar State Mineral Development Corpn. v.
    Encon Builders (I) (P) Ltd.
    , (2003) 7 SCC 418] placed reliance on

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    K.K. Modi case [K.K. Modi v. K.N. Modi, (1998) 3 SCC 573] and
    further condensed the essential features of an arbitration agreement
    into four elements i.e. : (Encon Builders case [Bihar State Mineral
    Development Corpn. v. Encon Builders (I) (P) Ltd.
    , (2003) 7 SCC
    418] , SCC p. 423, para 13)
    “13. The essential elements of an arbitration agreement are as
    follows:

    (1) There must be a present or a future difference in
    connection with some contemplated affair.

    (2) There must be the intention of the parties to settle such
    difference by a private tribunal.

    (3) The parties must agree in writing to be bound by the
    decision of such tribunal.

    (4) The parties must be ad idem.”

    xxx xxx xxx

    23. Adverting to the case in hand, it may be seen that the contents and
    the nature of Clause 18 are substantially different from the dispute
    resolution pacts in K.K. Modi [K.K. Modi v. K.N. Modi, (1998) 3 SCC
    573] , Jagdish Chander [Jagdish Chander v. Ramesh Chander
    , (2007)
    5 SCC 719] , or Encon Builders [Bihar State Mineral Development
    Corpn. v. Encon Builders (I) (P) Ltd.
    , (2003) 7 SCC 418] . We say so
    for three reasons. Firstly, apart from the fact that Clause 18 of the
    development agreement uses the terms “arbitration” and
    “arbitrator(s)”, it has clearly enunciated the mandatory nature of
    reference to arbitration by using the term “shall be referred to
    arbitration of a sole arbitrator mutually appointed, failing which,
    two arbitrators, one to be appointed by each party to dispute or
    difference”. Secondly, the method of appointing the third arbitrator
    has also been clearly mentioned wherein the two selected arbitrators
    are to appoint a third arbitrator. Finally, even the governing law was
    chosen by the parties to be “the Arbitration and Conciliation Act,
    1996
    or any re-enactment thereof.” These three recitals, strongly
    point towards an unambiguous intention of the parties at the time of
    formation of the contract to refer their dispute(s) to arbitration.

    24. We are, therefore, of the firm opinion that the High Court fell in
    error in holding that the appellant’s application under Section 11 was
    not maintainable for want of a valid arbitration clause. We find that
    Clause 18 luminously discloses the intention and obligation of the
    parties to be bound by the decision of the tribunal, even though the
    words “final and binding” are not expressly incorporated therein. It
    can be gleaned from other parts of the arbitration agreement that
    the intention of the parties was surely to refer the disputes to

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    arbitration. In the absence of specific exclusion of any of the
    attributes of an arbitration agreement, the respondents‟ plea of non-
    existence of a valid arbitration clause, is seemingly an afterthought.

    25. Even if we were to assume that the subject clause lacks certain
    essential characteristics of arbitration like “final and binding” nature
    of the award, the parties have evinced clear intention to refer the
    dispute to arbitration and abide by the decision of the tribunal. The
    party autonomy to this effect, therefore, deserves to be protected.

    26. The deficiency of words in agreement which otherwise fortifies
    the intention of the parties to arbitrate their disputes, cannot
    legitimise the annulment of arbitration clause. A three-Judge Bench
    of this Court in Enercon (India) Ltd. v. Enercon GmbH [Enercon
    (India) Ltd.
    v. Enercon GmbH, (2014) 5 SCC 1: (2014) 3 SCC (Civ)
    59] dealt with an arbitration clause that did not provide for a method
    of electing the third arbitrator. The Court held that “the omission is
    so obvious that the court can legitimately supply the missing line.”
    The line “the two arbitrators appointed by the parties shall appoint
    the third arbitrator” was read into the clause so as to give effect to it.
    It was further held that: (SCC p. 39, para 88)
    “88. In our opinion, the courts have to adopt a
    pragmatic approach and not a pedantic or technical approach
    while interpreting or construing an arbitration agreement or
    arbitration clause. Therefore, when faced with a seemingly
    unworkable arbitration clause, it would be the duty of the
    court to make the same workable within the permissible limits
    of the law, without stretching it beyond the boundaries of
    recognition. In other words, a common sense approach has to
    be adopted to give effect to the intention of the parties to
    arbitrate. In such a case, the court ought to adopt the attitude
    of a reasonable business person, having business common
    sense as well as being equipped with the knowledge that may
    be peculiar to the business venture. The arbitration clause
    cannot be construed with a purely legalistic mindset, as if one
    is construing a provision in a statute.”

    xxx xxx xxx”

    (Emphasis Supplied)

    13. Applying the settled principles of law, as noted hereinabove, it has to
    be construed whether the Clause in the present case constitutes a valid and
    binding Arbitration Agreement between the parties. Clause 29, containing
    the dispute resolution clause in the present case, firstly, mandates resolution

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    of disputes through amicable discussion. In the event the parties are unable
    to resolve their disputes by amicable discussion, the parties will be free to
    avail their legal remedies. The said Clause further proceeds to record that in
    the event of the parties being unable to resolve the disputes by amicable
    discussion, the disputes may be referred to arbitration, in terms as elucidated
    in sub-clause (d) of the said Clause.

    14. It is further to be seen that the dispute resolution clause in the present
    case, after recording that the disputes may be referred to arbitration, has
    detailed the procedure for conduct of the arbitration in sub-clause (d), which
    clearly stipulates that the arbitration award shall be final and binding on the
    parties. Further, the said sub-clause also lays down the venue and seat of the
    arbitral tribunal.

    15. Therefore, it is apparent that in the present case, there is a clear intent
    of the parties to resolve the disputes through arbitration. The dispute
    resolution clause is also in compliance with the norms of arbitration and
    contemplates a binding adjudicatory mechanism.

    16. Such intent of the parties is manifest from a holistic reading of the
    dispute resolution clause (Clause 29), which elucidates the specific and
    elaborate terms and procedure agreed upon between the parties for conduct
    of arbitration. At the cost of repetition, it is noted that the parties have
    agreed that they shall be bound by the arbitral award and shall act in
    accordance with the same. The parties have further agreed upon the
    language of the proceedings, as well as the liability of the party to pay cost
    and expenses of the proceedings to be undertaken.

    17. The dispute resolution clause, by elucidating the detailed procedure
    for conduct of arbitration and using the terminology that, „arbitration shall

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    be conducted as follows‟, as also by stipulating the governing law and
    making the arbitration award final and binding on the parties, strongly points
    towards the unambiguous intention of the parties to refer the disputes to
    arbitration.

    18. Mere use of the prefix „may‟, which is followed by a detailed binding
    adjudicatory mechanism, shall not make the dispute resolution clause in the
    present case as a non-binding Arbitration Clause. Thus, a comprehensive,
    harmonious and wholesome construction of Clause 29 makes clear the intent
    of the parties to refer the disputes to arbitration, in the eventuality the same
    are not resolved amicably.

    19. Accordingly, prima facie, all the pre-requisites of a valid and binding
    Arbitration Agreement are fulfilled in the present case and it is manifest that
    the dispute resolution clause contemplates settlement of the disputes
    between the parties through the process of arbitration.

    20. In this regard, reference may be made to the judgment in the case of
    Mahanagar Telephone Nigam Limited Versus Canara Bank and Others,
    (2020) 12 SCC 767, wherein, the Supreme Court laid down that an
    Arbitration Agreement between the parties must be understood and
    interpreted in terms of the intention between the parties. Furthermore, in
    interpreting or construing an Arbitration Agreement, it would be the duty of
    the Court to make the same workable within the permissible limits of the
    law. Thus, it was held as follows:

    “xxx xxx xxx

    9. A valid arbitration agreement constitutes the heart of an
    arbitration. An arbitration agreement is the written agreement
    between the parties, to submit their existing, or future disputes or
    differences, to arbitration. A valid arbitration agreement is the
    foundation stone on which the entire edifice of the arbitral process

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    is structured. A binding agreement for disputes to be resolved
    through arbitration is a sine qua non for referring the parties to
    arbitration.

    xxx xxx xxx
    9.2. The arbitration agreement need not be in any particular form.
    What is required to be ascertained is the intention of the parties to
    settle their disputes through arbitration. The essential elements or
    attributes of an arbitration agreement is the agreement to refer their
    disputes or differences to arbitration, which is expressly or impliedly
    spelt out from a clause in an agreement, separate agreement, or
    documents/correspondence exchanged between the parties.
    9.3. Section 7(4)(b) of the 1996 Act, states that an arbitration
    agreement can be derived from exchange of letters, telex, telegram or
    other means of communication, including through electronic means.
    The 2015 Amendment Act inserted the words “including
    communication through electronic means” in Section 7(4)(b). If it can
    prima facie be shown that parties are ad idem, even though the other
    party may not have signed a formal contract, it cannot absolve him
    from the liability under the agreement [Govind Rubber Ltd. v. Louis
    Dreyfus Commodities Asia (P) Ltd.
    , (2015) 13 SCC 477 : (2016) 1
    SCC (Civ) 733] .

    9.4. Arbitration agreements are to be construed according to the
    general principles of construction of statutes, statutory instruments,
    and other contractual documents. The intention of the parties must
    be inferred from the terms of the contract, conduct of the parties,
    and correspondence exchanged, to ascertain the existence of a
    binding contract between the parties. If the documents on record
    show that the parties were ad idem, and had actually reached an
    agreement upon all material terms, then it would be construed to be
    a binding contract. The meaning of a contract must be gathered by
    adopting a common sense approach, and must not be allowed to be
    thwarted by a pedantic and legalistic interpretation. [Union of India
    v. D.N. Revri & Co.
    , (1976) 4 SCC 147]
    9.5. A commercial document has to be interpreted in such a manner
    so as to give effect to the agreement, rather than to invalidate it. An
    “arbitration agreement” is a commercial document inter partes, and
    must be interpreted so as to give effect to the intention of the parties,
    rather than to invalidate it on technicalities.
    9.6.
    In Khardah Co. Ltd. v. Raymon & Co. (India) (P) Ltd. [Khardah
    Co. Ltd.
    v. Raymon & Co. (India) (P) Ltd., (1963) 3 SCR 183 : AIR
    1962 SC 1810] , this Court while ascertaining the terms of an
    arbitration agreement between the parties, held that: (AIR p. 1820,

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    para 30)
    “30. … If on a reading of the document as a whole, it can
    fairly be deduced from the words actually used therein, that the
    parties had agreed on a particular term, there is nothing in law
    which prevents them from setting up that term. The terms of a
    contract can be express or implied from what has been expressed. It
    is in the ultimate analysis a question of construction of the
    contract.”

    (emphasis supplied)
    9.7. In interpreting or construing an arbitration agreement or
    arbitration clause, it would be the duty of the court to make the same
    workable within the permissible limits of the law. This Court in
    Enercon (India) Ltd. v. Enercon GmbH [Enercon (India) Ltd. v.
    Enercon GmbH, (2014) 5 SCC 1 : (2014) 3 SCC (Civ) 59] , held that
    a common sense approach has to be adopted to give effect to the
    intention of the parties to arbitrate the disputes between them. Being
    a commercial contract, the arbitration clause cannot be construed
    with a purely legalistic mindset, as in the case of a statute.
    xxx xxx xxx”

    (Emphasis Supplied)

    21. Similarly, holding that Courts must adopt a pragmatic and
    commercially efficacious approach to uphold and operationalise Arbitration
    Clauses, ensuring that intention to arbitrate is not defeated merely due to
    inartistic drafting or apparent un-workability, Supreme Court in the case of
    Enercon (India) Limited and Others Versus Enercon GMBH and
    Another, (2014) 5 SCC 1, has held as follows:

    “xxx xxx xxx

    88. In our opinion, the courts have to adopt a pragmatic approach
    and not a pedantic or technical approach while interpreting or
    construing an arbitration agreement or arbitration clause.
    Therefore, when faced with a seemingly unworkable arbitration
    clause, it would be the duty of the court to make the same workable
    within the permissible limits of the law, without stretching it beyond
    the boundaries of recognition. In other words, a common sense
    approach has to be adopted to give effect to the intention of the
    parties to arbitrate. In such a case, the court ought to adopt the
    attitude of a reasonable business person, having business common
    sense as well as being equipped with the knowledge that may be

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    peculiar to the business venture. The arbitration clause cannot be
    construed with a purely legalistic mindset, as if one is construing a
    provision in a statute. We may just add here the words of Lord
    Diplock in Antaios Compania Naviera S.A. v. Salen Rederierna A.B.
    [1985 AC 191 : (1984) 3 WLR 592 : (1984) 3 All ER 229 (HL)] ,
    which are as follows: (AC p. 201 E)
    “… if detailed semantic and syntactical analysis of words
    in a commercial contract is going to lead to a conclusion that
    flouts business commonsense, it must be made to yield to
    business commonsense.”

    We entirely agree with the aforesaid observation.

    89. This view of ours is also supported by the following judgments
    which were relied upon by Dr Singhvi:

    89.1. In Visa International Ltd. [Visa International Ltd. v. Continental
    Resources (USA) Ltd.
    , (2009) 2 SCC 55 : (2009) 1 SCC (Civ) 379], it
    was inter alia held that: (SCC pp. 64-65, paras 25-26)
    “25. … No party can be allowed to take advantage of
    inartistic drafting of arbitration clause in any agreement as
    long as clear intention of parties to go for arbitration in case
    of any future disputes is evident from the agreement and
    material on record including surrounding circumstances.

    26. What is required to be gathered is the intention of the
    parties from the surrounding circumstances including the
    conduct of the parties and the evidence such as exchange of
    correspondence between the parties.”

    89.2. Similar position of law was reiterated in Nandan Biomatrix Ltd.

    [Nandan Biomatrix Ltd. v. D1 Oils Ltd., (2009) 4 SCC 495: (2009) 2
    SCC (Civ) 227], wherein this Court observed inter alia as under:

    (SCC pp. 501-02, paras 28-30)
    “28. This Court in Rukmanibai Gupta v. Collector [(1980)
    4 SCC 556] has held (at SCC p. 560, para 6) that what is
    required to be ascertained while construing a clause is
    „whether the parties have agreed that if disputes arise
    between them in respect of the subject-matter of contract such
    dispute shall be referred to arbitration, then such an
    arrangement would spell out an arbitration agreement‟.

    29. In M. Dayanand Reddy v. A.P. Industrial
    Infrastructure Corpn. Ltd.
    [(1993) 3 SCC 137] this Court has
    held that: (SCC p. 142, para 8)

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    „8. … an arbitration clause is not required to be stated in
    any particular form. If the intention of the parties to refer the
    dispute to arbitration can be clearly ascertained from the terms
    of the agreement, it is immaterial whether or not the
    expression arbitration or “arbitrator” or “arbitrators” has
    been used in the agreement.‟

    30. The Court is required, therefore, to decide whether the
    existence of an agreement to refer the dispute to arbitration can
    be clearly ascertained in the facts and circumstances of the
    case. This, in turn, may depend upon the intention of the parties
    to be gathered from the correspondence exchanged between the
    parties, the agreement in question and the surrounding
    circumstances. What is required is to gather the intention of the
    parties as to whether they have agreed for resolution of the
    disputes through arbitration. What is required to be decided in
    an application under Section 11 of the 1996 Act is: whether
    there is an arbitration agreement as defined in the said Act.”

    (emphasis in original)

    90. It is a well-recognised principle of arbitration jurisprudence in
    almost all the jurisdictions, especially those following the
    UNCITRAL Model Law, that the courts play a supportive role in
    encouraging the arbitration to proceed rather than letting it come to
    a grinding halt. Another equally important principle recognised in
    almost all jurisdictions is the least intervention by the courts. Under
    the Indian Arbitration Act, 1996
    , Section 5 specifically lays down that:

    “5.Extent of judicial intervention.–Notwithstanding anything
    contained in any other law for the time being in force, in matters
    governed by this Part, no judicial authority shall intervene except
    where so provided in this Part.”

    Keeping in view the aforesaid, we find force in the submission of
    Dr Singhvi that the arbitration clause as it stands cannot be frustrated
    on the ground that it is unworkable.

    xxx xxx xxx

    96. Similarly, other provisions contained in Sections 8, 11 and 45 of
    the Indian Arbitration Act, 1996 are machinery provisions to ensure
    that parties can proceed to arbitration provided they have expressed
    the intention to arbitrate. This intention can be expressed by the
    parties, as specifically provided under Section 7 of the Indian
    Arbitration Act, 1996 by an exchange of letters, telex, telegrams or
    other means of telecommunication which provide a record of the
    agreement. Such intention can even be expressed in the pleadings of
    the parties such as statements of claim and defence, in which the

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    existence of the agreement is alleged by one party and not denied by
    the other. In view of the above, we are of the opinion that the parties
    can be permitted to proceed to arbitration.

    xxx xxx xxx”

    (Emphasis Supplied)

    22. In regard to interpretation of contracts/clauses, this Court also notes
    the judgment in the case of Infrastructure Leasing and Financial Services
    Ltd. Versus HDFC Bank Ltd. and Another, 2023 SCC OnLine SC 1371,
    wherein, the Supreme Court has succinctly recapitulated the principles of
    interpretation of contract, and held that it is the effect of all the terms of the
    document, which brings out the true purport and intention of the parties. The
    relevant portion of the aforesaid judgment, is extracted as follows:

    “xxx xxx xxx

    29. The effect of these documents is what the court is concerned
    with. It is a known principle of contract interpretation, that the
    substance of a document, is discernible from its terms, rather than
    the label or its nomenclature. In Yellapu Uma Maheswari v. Buddha
    Jagadheeswararao
    [(2015) 11 SCR 849], the court held:

    “It is well settled that the nomenclature given to the
    document is not decisive factor but the nature and substance
    of the transaction has to be determined with reference to the
    terms of the documents and that the admissibility of a
    document is entirely dependent upon the recitals contained in
    that document but not on the basis of the pleadings set up by
    the party who seeks to introduce the document in question.”

    30. In Assam Small Scale Ind. Dev. Corp. Ltd. v. J.D.
    Pharmaceuticals
    [2005 Supp (4) SCR 232] the court stated as follows:

    “The nature of transaction is required to be determined
    on the basis of the substance there and not by the
    nomenclature used. Documents are to be construed having
    regard to the contexts thereof wherefor „labels‟ may not be of
    much relevance.”

    31. This was also stated in V. Lakshmanan v. B.R. Mangalagiri [1994
    Supp (6) SCR 561] (that the “nomenclature or label given in the
    agreement as advance is not either decisive or immutable.”).
    This
    principle of substance, over the form, was followed in Super Poly

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    Fabriks Ltd. v. Commissioner of Central Excise, Punjab
    [(2008) 6
    SCR 1076].

    32. That one document is styled or described in a certain manner, or
    that it uses a certain expression, or term is not conclusive; it is the
    effect of all the terms, of the documents, which bring out the true
    purport and intention of the parties. Likewise, another allied
    principle of contract interpretation, is that where the transaction is
    not the subject of one document, but several, which refer to each
    other, or a reading of all, describe the entire contract, then, it is open
    to the court to consider all of them together. This principle was stated
    in S. Chattanatha Karayalar v. The Central Bank of India wherein this
    court held that:

    “The principle is well-established that if the transaction is
    contained in more than one document between the same parties
    they must be read and interpreted together and they have the
    same legal effect for all purposes as if they are one document. In
    Manks v. Whiteley, [1912] 1 Ch. 735 Moulton, L.J. stated:

    “Where several deeds form part of one transaction and
    are contemporaneously executed they have the same effect for
    all purposes such as are relevant to this case as if they were one
    deed. Each is executed on the faith of all the others being
    executed also and is intended to speak only as part of the one
    transaction, and if one is seeking to make equities apply to the
    parties they must be equities arising out of the transaction as a
    whole.”

    xxx xxx xxx”

    (Emphasis Supplied)

    23. In the light of the above discussion, this Court is of a prima facie view
    that the intention of the parties to resolve their disputes by way of arbitration
    is palpable from a bare reading of the dispute resolution clause governing
    the parties. Consequently, Clause 29 of the Agreement between the parties is
    held to be a valid Arbitration Clause, which is binding on the parties before
    this Court.

    24. The judgments relied upon by the respondent are clearly
    distinguishable, as the dispute resolution clause contained in the said
    judgments are distinct and entirely different from the dispute resolution

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    clause existing in the present case. Besides, in the present case, the parties
    have already agreed upon the terms of arbitration at length, unlike in the
    cases as relied upon by the respondent, wherein the terms of conduct of
    arbitration had been left to be determined at a later stage.

    25. Though the dispute resolution clause in the present case envisages
    amicable discussion between the parties, however, it is a settled legal
    position that any pre-arbitral mechanism making it obligatory to seek
    resolution of disputes through mediation, conciliation or the like, is directory
    and not mandatory. (See: Hindustan Unilever Limited Versus Jagdeesh
    Kumar Sole Proprietor of Hari Ram Dharam Pal, 2024 SCC OnLine Del
    7522)

    26. Accordingly, there is no impediment before this Court in appointing
    an arbitrator. Since the petitioner herein has already invoked the Arbitration
    Clause, this Court proceeds to appoint an arbitrator in terms of the Clause 29
    between the parties.

    27. Considering the submissions made before this Court, following
    directions are issued:

    i. Mr. Amrit Pal Gambhir, Advocate, (Mobile No.: +91-9810082347
    and +91-9999983935) is appointed as a Sole Arbitrator to adjudicate
    the disputes between the parties.

    ii. The remuneration of the Arbitrator shall be in terms of Schedule IV of
    the Arbitration Act
    .

    iii. The Arbitrator is requested to furnish a declaration in terms of Section
    12
    of the Arbitration Act prior to entering into the reference. In the
    event, there is any impediment to the Arbitrator‟s appointment on that
    count, the parties are given liberty to file an appropriate application

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    before this Court.

    iv. It shall be open to the respondent to raise counter-claims, if any, in the
    arbitration proceedings.

    v. It is made clear that all the rights and contentions of the parties,
    including, the arbitrability of any of the claims and/or counter-claims,
    any other preliminary objection, as well as claims on merits of the
    dispute of either of the parties, are left open for adjudication by the
    learned Arbitrator.

    vi. The parties shall approach the Arbitrator within two (2) weeks, from
    today.

    28. It is made clear that this Court has not expressed any opinion on the
    merits of the case.

    29. The petition is disposed of in the aforesaid terms.

    30. The Registry is directed to send a copy of this order to the learned
    Sole Arbitrator, for information and compliance.

    MINI PUSHKARNA
    (JUDGE)
    APRIL 10, 2026
    Kr/Au/Ak/Sk

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