Madras HC Protects Doctor’s Independence – Arbitration Petition of Hospital Rejected
judgment dated 23.2.2026 of the Madras High Court in Arbitation O.P. (Com.Div.) No.708 of 2025 of MIOT Hospitals Private Limited Vs. Dr. Balaraman Palaniappan
Clauses of the Professional Agreement between Hospital and Cardio Thoracic Surgeon provide for non-compete, non-solicit and from rejoining rival hospitals or practicing within 15 kms for three years.
Madras HC criticized Hospital for importing “cut-copy-paste” non-compete clauses from corporate contracts into medical practice professional agreement with the Doctor
Non-compete and non-solicitation clauses in professional agreement are unenforceable against Doctors.
Madras HC – Arbitration Clause embedded in professional agreement of doctor containing void restrictive covenants’ cannot survive.
Madras HC – Hospitals must respect the professional independence of doctors, disputes must be limited to law obligations like notice periods.
Madras HC strong observations – Hospitals cannot project themselves as “rival businesses” in a way to restrain doctor’s independence.
Madras HC – since restrictive convenants were void and termination of professional agreement was valid, no arbitration dispute of hospital with the doctor remained for appointment of arbitrator.
Madras HC – Doctors Not Bound by Corporate-style Non-compete clauses in the professional agreement of the Hospital
Madras HC Protects Doctor’s Independence – Arbitration Petition of Hospital Rejected
In this section 11 petition for appointment of arbitrator, the dispute was in respect of the professional agreement with the respondent – Consultant Surgeon for three years.
Clause 10.2 provided for three months’ advance notice or professional fees for early termination of the agreement. Clause 2.3 provided for liquidated damages.
Clause 8.3 and Clause 8.3 provided for non-solicitation and non-compete restrictions for a period of three years.
However, before completion of three years period the respondent had resigned and terminated the agreement. Moreover, the respondent did not give three months’ advance notice or professional fees as required by Clause 10.2 of the agreement.
By no stretch, one hospital can treat another hospital as a rival and consequently, non-compete clause never form part of an agreement between a hospital and a doctor.
