Arbitrability of healthcare and medical tourism Conflicts in India A comparative study of US & EU Jurisdictions
Abstract:
Paper focuses on arbitrability of medical disputes and medical tourism disputes and draws inspiration from foreign jurisdiction such as Californian and Utah legislation as well as European regulatory frameworks on how arbitration in medical filed can be implemented effectively. This paper also suggests that India needs to have tailored arbitration laws for medical disputes.
Introduction:
Medical disputes that arise from the cross border medical tourism disputes posses unique challenges as there are multiple parties involved across various jurisdictions. In the context of India, medical disputes cases are resolved via traditional litigation and the Consumer Protection Act but there are also a lot of added benefits if these disputes are resolved via arbitration. A Dispute Resolution clause is therefore essential to an agreement. Enforcing an order or decree in a foreign country would be challenging, but arbitration makes this aspect of enforceability easier because arbitral rulings are globally recognised and enforceable. The patient is responsible for implementing the order against any foreign parties involved in the medical procedure in their home state if they are accused of carelessness or causing harm. For example, recipients of kidney transplants often go to countries such as Korea, Mexico, Jordan, India, and Turkey from all over the world. Although this may seem commonplace, a successful kidney transplant requires the cooperation of several parties, including the recipient, the donor, doctors, hospitals, insurance providers, the government, and local authorities. An arbitration clause in the parties’ medical agreement will be essential in addition to the award’s enforcement in the state where the patient is scheduled to have surgery, as the parties may disagree at any point in such a complex circumstance.
How can India resolve medical disputes via Arbitration?
There have been various cases in India that answer the question of that why this paper has a pro-arbitration stance in medical cases. In the Landmark case of Dr. Kunal Saha vs. Dr. Sukumar Mukherjee & Others[1], Anuradha Saha’s death in May 1998 from toxic epidermal necrosis, which was purportedly caused by medical negligence on the part of Dr. Sukumar Mukherjee and others at AMRI Hospital in Kolkata, Kunal Saha’s legal battle commenced. Anuradha’s health rapidly deteriorated after receiving large dosages of steroids treatment despite her failing condition, ultimately resulting in her death. Along with filing complaints with the National Consumer Disputes Redressal Commission (NCDRC) and the West Bengal Medical Council, Kunal Saha also launched criminal and civil actions against the doctors and the hospital. The NCDRC dismissed his complaint in 2006, claiming that physicians are not always required to cure patients, as one of the case’s many legal defeats. Following a 15-year legal struggle, the Supreme Court ruled Drs. Mukherjee, Prasad, Haldar, and AMRI Hospital responsible in 2013. As a result, Saha received one of the highest compensation awards in India for medical negligence, ₹5.96 crore.
Resolution of the case of Dr. Kunal Saha vs. Dr. Sukumar Mukherjee & Others via Arbitration:
The 15 years of legal struggle would have ended in a very short time span if this matter was referred to Arbitration by the Indian Courts. This case also signifies the importance of having a specific dispute resolution forum for medical disputes where Arbitration is mandatory in nature, unless both the parties mutually agree that they would want to continue with traditional litigation. A fast-track remedy can be achieved as in Arbitration parties are free to choose their Arbitrator and having a Arbitrator from the medical field in such cases would be beneficial for both the parties involved. Indian Courts draw positive inference from the foreign laws which advocate for Arbitration. Californian law is one of the most prominent examples.
International Perspective on Arbitrability of Medical Disputes:
Californian Law:
The California law supports arbitration and regulates the arbitration agreements between patients and doctors, which creates a suitable environment for Arbitral agreements. California Civil Procedure Code, Section 1281 states that “a written agreement to submit to an arbitration an existing controversy or a controversy thereafter arising is valid, enforceable and irrevocable, save upon grounds as exist for revocation of any contract.” Similarly, Section 1295(a) “requires that arbitration clauses in contracts for the provision of health care services must appear in the first article of the contract and must use specific language”. Section 1295 (e) states that “any contract that complies with these requirements will not be deemed unconscionable.”[2] The Supreme Court of California has been aggressively pursuing Arbitration for medical disputes as it can be clearly seen in the case of Ruiz v. Podoisky[3],that arbitration contracts that patients sign can bind their heirs in wrongful death lawsuits, even if the heirs did not sign the contract. The court stressed that Section 1295 of the California Code of Civil Procedure makes this intent enforceable if the arbitration agreement expressly specifies that it extends to heirs. By requiring arbitration for claims resulting from medical treatment, including wrongful death lawsuits, this historic ruling strengthens the enforcement of arbitration agreements in healthcare settings and enables providers to reduce litigation risks. The California Supreme Court decided that, provided the agreement expressly states so, arbitration agreements in hospital settings may cover wrongful death claims. The court emphasised how crucial it is for contracts to have unambiguous language so that all parties are aware of the arbitration clause’s extent. Indian Courts can establish the same precedent in order to avoid similar issues in future cases and refer cases to arbitration to avoid delays in the due process of law and justice. The Californian Judiciary has supported the Arbitration in medical tourism agreements [4].
Lessons for India:
Healthcare contracts must include arbitration clauses that are clear and conspicuous, as required by the California Civil Procedure Code. This strategy can be used by Indian healthcare providers and legal drafters by including explicit arbitration clauses in all contracts for medical services. This will eliminate any misunderstandings that would otherwise result in protracted litigation by ensuring that all parties—patients, healthcare providers, and insurers—understand their rights and obligations.
The Utah Legislature:
The Utah legislature changed Utah Code Ann. § 78B-3-421[5], a state statute that permits healthcare providers to demand arbitration agreements from individuals in exchange for providing non-emergency care. The goal of this modification is to make medical malpractice dispute settlement more efficient. The change has sparked worries about patient rights and access to justice, but it also represents a larger trend towards arbitration in hospital settings.
Lessons for India:
India must take care to protect patient rights even as the Utah model has effectively cut dispute resolution delays by implementing arbitration agreements in non-emergency treatment. A safety net for those who could otherwise be harmed by a mandated procedure could be provided by establishing an initial cooling-off period during which patients can choose whether to opt out of arbitration.
The Southern California Arbitration Project:
This project can be taken into consideration as prominent examples of public opinion for Arbitration of Medical disputes. The California Medical Association (CMA) and the California Hospital Association (CHA) funded a pilot arbitration project that proved so successful that it led to the widespread arbitration of medical malpractice cases. In July 1969, a comparative study between two comparable groups of hospitals was conducted since there was a dearth of relative qualitative historical data regarding the use of arbitration in the hospital setting.
Eight hospitals that took part in the Southern California Arbitration Project served as the sample for the group of hospitals who had adopted arbitration. The patient may choose to sign an arbitration agreement for any disagreements with the hospital resulting from that hospitalisation in a similar group of institutions. The patient has thirty days from the time of hospital discharge to withdraw the arbitration agreement. Less than 1% of the 500,000 patients admitted to the eight hospitals initially declined or revoked their acceptance of the arbitration option within 30 days, demonstrating the remarkable level of patient acceptance of the option. It was discovered that hospitals arbitrating medical malpractice claims incurred less money and resolved disputes more quickly and efficiently than hospitals that did not. Settlements were also found to be lower.[6]
Lessons for India:
The Southern California Arbitration Project serves as an example of how specialised arbitration panels with medical conflict specialists can expedite case settlement and reduce expenses. Similar panels or centres might be established in India, especially in large cities where high-profile conflicts and medical tourism are prevalent. These facilities would function according to regulations created especially for the intricacies of healthcare conflicts, including those involving numerous parties, international legal concerns, and the delicate nature of medical malpractice lawsuits.
Federal Arbitration Act:
The Federal Arbitration Act supports a contractual approach to the private arbitration agreements. The parties allowed to have their disputes resolved through mechanisms that don’t include traditional process of litigation. The Clause of arbitration under this act is applicable to to the parties who are involved in the contract to resolves the disputes arising out of the particular contract. In one of the decisions of the Supreme Court of USA it was established that the Federal Arbitration act is a substantive law rather than a procedural law. In a Case of Doctor’s Associates v. Casarotto [7]court held that there was difference in treatment of Arbitration Clause as compared to other contractual obligation by the state legislation, the role of the state is limited when it comes to interpretation. The above case was discussed as it highlights the grass root level complication when it comes to interpretation of arbitration clauses. The international awards and their enforcement are not discussed by the FAA. According to Article III of the 1958 New York Convention, awards granted in one foreign country are enforceable in any other foreign country provided that the nation in question is a party to the 1958 New York Convention. The Courts will only set aside the award if Article III’s requirements are met.[8]
Lessons for India:
By incorporating FAA principles and international conventions like the New York Convention, India may bring its arbitration structure into line with worldwide best practices and guarantee that arbitral rulings are enforceable both nationally and globally. In addition to boosting stakeholder confidence, this alignment would establish India as a desirable location for resolving international healthcare disputes.
Europe on arbitrability of Medical Disputes:
One notable arbitration case that demonstrates the intricacies of multinational licencing arrangements in the healthcare industry is Kolon Life Science v. Mitsubishi Tanabe Pharma Corporation[9]. Context Two companies that specialize in cell and gene therapy include Mitsubishi Tanabe Pharma Corporation, a Japanese pharmaceutical company, and Kolon Life Science, a South Korean corporation. The disagreement stemmed from a licensing deal for Invossa, the first cell-mediated gene therapy treatment for osteoarthritis in the world. This treatment was created to treat degenerative osteoarthritis, a widespread ailment that is especially prevalent in older populations. Allegations that Kolon had mislabelled therapeutic components and concealed a clinical hold placed on the therapy by the US Food and Drug Administration (FDA) prompted the arbitration. Due to this lack of disclosure, regulatory concerns were raised. An ICC arbitral tribunal found in Mitsubishi Tanabe’s favor in January 2021 and mandated that Kolon pay a substantial sum of money. The tribunal’s ruling emphasized how crucial it is for license agreements in the life sciences industry to be transparent and to follow legal requirements. This case provides as an excellent illustration of how arbitration may be a useful tool in the pharmaceutical business for settling intricate cross-border conflicts. As signatories to the New York Convention, South Korea and Japan enable international arbitration and guarantee the recognition and enforceability of arbitral rulings internationally. This case serves as an example of the vital role arbitration plays in resolving conflicts in the healthcare industry, especially those involving license agreements. It emphasizes how important it is for multinational cooperation to follow regulatory requirements and communicate clearly, as breaking these rules can have serious financial repercussions.
The Brussels Regulation[10]:
The jurisdiction, recognition, and execution of judgments in civil and commercial proceedings inside the European Union are determined in large part by the Brussels Regulations, especially the Brussels I Regulation and its recast version. Nevertheless, they expressly state that arbitration is not covered by them, which has important ramifications for how arbitration fits in with EU law.
Article 1(2)(d) of Brussels regulation[11]
Arbitration Exclusion: The Brussels I Regulation’s Article 1(2)(d) specifies that arbitration is not covered by the Regulation. Due to this exclusion, Member States are free to handle arbitration in their own ways as it is not subject to the regulations outlined in the Regulation.
Effect on Court Decisions: Under the Brussels framework, court rulings pertaining to the presence or legality of an arbitration agreement are not binding on other courts. This implies that a court’s decision regarding a matter pertaining to an arbitration agreement need not be abided by courts in other Member States.
Recognition of the New York Convention: The 1958 New York Convention is given precedence above the requirements of the revised Brussels I Regulation. This strengthens the legitimacy and enforcement of international arbitration agreements by stating that, in the event of a dispute between an arbitral award and a court ruling, the arbitral award should be upheld.
Conclusion:
Before we say that India needs to make medical disputes arbitrable in nature, there is a very crucial factor that needs to be taken into consideration i.e. India cannot just take this decision based on the foreign jurisdiction as those laws are not India centric. Why a do we need new laws when the Consumer Protection Act deals with medical disputes?
The answer for this question lies with the concept of ‘Transplant Effect’[12] that helps us understand that even when there is a pre-existing common framework of laws, they undergo changes due to local, social and institutional influences. Therefore, there is needs to have India specific laws that govern the procedure of arbitration in medical disputes. That is because medical disputes are even criminal in nature and the Arbitration and Conciliation Act of 2021 does not facilitate arbitrability of criminal disputes. First and most important advantage will be that it is time efficient and reduces the workload of judiciary thereby ensuring that justice is both swift and equitable for all parties involved. Second benefit is that Prime Minster of India while delivering a speech at ‘National Initiative towards Strengthening Arbitration and Enforcement in India’ and quoted that “An enabling alternate dispute resolution ecosystem is a national priority for India. We need to promote India globally as an arbitration hub.”[13] The President of the International Court of Arbitration, Claudia Salomon stated that India initially has to become an ‘Arbitration friendly’ in order for India to achieve its dream to become a ‘Global Arbitration Hub’[14]. India would be taking a step forward for achieving its dream of being a ‘Pro Arbitration’ nation as well if it makes medical disputes arbitrable.
[1] Dr. Kunal Saha v. Dr. Sukumar Mukherjee [AIR 2010 Supreme Court 1162].
[2]California Code of Civil Procedure, § 1281 https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=CCP§ionNum=1281 accessed 7 April 2025
[3] Ruiz v Podolsky (2009) 175 Cal App 4th 227 (Cal Ct App) https://scocal.stanford.edu/opinion/ruiz-v-podolsky-33899 accessed 7 April 2025
[4] Madden v Kaiser Foundation Hospitals [1976] 17 Cal 3d 699 (Cal Sup Ct) https://law.justia.com/cases/california/supreme-court/3d/17/699.html accessed 7 April 2025
[5] Utah Code Ann. § 78B-3-421 (2023) https://le.utah.gov/xcode/Title78B/Chapter3/78B-3-S421.html accessed 7 April 2025
[6] Lisa M Bassis, ‘Arbitration of Medical Malpractice Disputes – Some Problems’ (1986) 41 Dispute Resolution Journal 102 https://heinonline.org/HOL/Page?handle=hein.journals/inslj41&div=46&g_sent=1&casa_token=&collection=journals accessed 7 April 2025
[7] Doctor’s Associates Inc v Casarotto 517 US 681 (1996) https://supreme.justia.com/cases/federal/us/517/681/ accessed 7 April 2025
[8] Elizabeth Rolph, Erik Moller and John E Rolph, ‘Arbitration Agreements in Health Care: Myths and Reality’ (1997) 60 Law and Contemporary Problems 153 https://www.jstor.org/stable/1191998 accessed 7 April 2025
[9] Kolon Life Science v. Mitsubishi Tanabe Pharma Corporation 533 F. Supp. 3d 170 (D.N.J. 2021)
[10] European Parliament, Challenges and Prospects for the European Medical Tourism Sector (Study, 2015) https://www.europarl.europa.eu/RegData/etudes/STUD/2015/509988/IPOL_STU(2015)509988_EN.pdf accessed 7 April 2025
[11] Regulation (EU) No 1215/2012 of the European Parliament and of the Council of 12 December 2012 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters (recast) [2012] OJ L351/1 https://eur-lex.europa.eu/legal-content/EN/ALL/?uri=celex%3A32012R1215 accessed 7 April 2025
[12] T T Arvind, ‘The “Transplant Effect” in Harmonization’ (2010) 59(1) International and Comparative Law Quarterly 65 https://www.jstor.org/stable/25622270 accessed 13 March 2025
[13] Narendra Modi, ‘Valedictory Speech at National Initiative Towards Strengthening Arbitration and Enforcement in India’ (Prime Minister’s Office, India, 23 October 2016) https://www.pmindia.gov.in/en/news_updates/valedictory-speech-by-prime-minister-at-national-initiative-towards-strengthening-arbitration-and-enforcement-in-india/ accessed 13 March 2025.
[14] R Sai Spandana, ‘Supreme Court Review 2024: Mostly Friendly Towards Arbitration’ (Supreme Court Observer, 23 January 2025) https://www.scobserver.in/journal/supreme-court-review-2024-mostly-friendly-towards-arbitration/ accessed 13 March 2025
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