A petition under Section 34 of the Arbitration Act against an interim award is maintainable where the order determines rights or forecloses a party's defense.

ORDER :

N.ANAND VENKATESH, J.

The petitioner has filed the petition under Section 34 of the Arbitration and Conciliation Act, 1996 [for brevity hereinafter referred to as 'the Act'] against the order passed by the Sole Arbitrator on 27.10.2025 in an application filed under Section 16 of the Act.

2.The Registry raised an objection on 21.11.2025 to the effect that the petition filed under Section 34 of the Act, as against an order passed under Section 16 of the Act is not maintainable. For the above objection raised by the Registry, the learned counsel for the petitioner gave an explanation stating that the order passed by the Arbitral Tribunal is in the nature of an interim award as per Section 31 (6) r/w Section 2 (c) of the Act and therefore the petition filed under is maintainable.

3.Since the Registry was not convinced with the explanation given by the learned counsel for petitioner, the case file was placed before me and I directed the Registry to list the petition under the caption “For Maintainability”.

4.When the matter was listed on 10.12.2025, the respondent was also represented by a counsel who had engaged Mr.Vijay Narayan, learned Senior Counsel. Therefore, this Court thought it fit to first hear both sides on the question of maintainability of the petition filed under Section 34 of the Act, as against an order passed under Section 16 of the Act. Accordingly, the matter was heard at length today and the orders were reserved only on the question of maintainability of this petition.

5.The brief facts, shorn of unnecessary details, are that the respondent had taken an Industrial All Risk Insurance Policy from the petitioner, which covers two kinds of losses viz., Material Damage [MD] and Business Interruption [BI]. There was a fire accident on 07.04.2020 and as a result, the respondent sustained losses and consequently made claims both under MD and BI. Insofar as MD claim is concerned, the surveyor submitted a report and accepted the claim to an extent of nearly Rs.33 Crores even though the respondent had made a higher claim. With respect to the BI claim, the surveyor through a report dated 05.08.2023, rejected the entire claim. Based on this report, the petitioner issued a letter of repudiation dated 03.05.2024.

6.The respondent invoked arbitration through a notice dated 23.05.2024 and made a claim with respect to the quantum under MD claim and the complete rejection of the BI claim which resulted in the repudiation of the claim.

7.The respondent approached this Court and filed Arb.OP(Com.Div).No.319 of 2024 for appointment of a Sole Arbitrator. The petitioner opposed this petition mainly on the ground that repudiation of the claim made by the petitioner cannot be a subject matter of arbitration as per condition 12 of the policy. The said objection was dealt with at length by the learned Single Judge and by an order dated 06.12.2024, the objection was overruled and a Sole Arbitrator was appointed.

8.After the commencement of the Arbitral proceedings, the respondent submitted a statement of claim by making a claim of Rs.14.23 Crores towards MD and Rs.218.61 Crores towards BI.

9.The petitioner filed an application under Section 16 of the Act on the ground that the Arbitration Clause under the policy only empowers the Arbitral Tribunal to hear the disputes on quantum and issue of repudiation cannot be considered by the Arbitral Tribunal.

10.The Arbitral Tribunal vide order dated 27.10.2025, rejected the application. Aggrieved by the same, the present petition has been filed under Section 34 of the Act, mainly on the ground that the