Newsletter - December, 2024

Interpretation of Arbitration Clauses Must Ensure Full Effect: Rajasthan High Court

[M/s Argon Remedies Pvt. Ltd. vs. Rajasthan Medical Services Corporation Ltd. ARBAP-64/2023]

The Rajasthan High Court recently emphasized that arbitration agreements should be interpreted to honor the parties’ intent to resolve disputes through arbitration. Even if certain clauses seem to limit the scope, courts should interpret them to uphold, not undermine, the arbitration process.

The dispute arose when M/s Argon Remedies Pvt. Ltd. alleged wrongful cancellation of a purchase order by Rajasthan Medical Services Corporation Ltd. Despite the Respondent’s objection to the arbitration clause’s validity, the Court ruled in favor of arbitration, affirming that the clause demonstrated the parties’ clear intent to arbitrate, even without explicit wording on the finality of the arbitrator’s decision.