The Court exercised its power under Section 11 of the Arbitration and Conciliation Act, 1996, to appoint a Sole Arbitrator based on the mutual consensus of the parties to resolve disputes arising from an insurance policy claim.

Digitally signed by PREETI KUMARI Date: 2026.04.23 18:17:36

Order on Board

1. This is an application under Section 11(5) and (6) of the Arbitration and Conciliation Act, 1996 for appointment of an Arbitrator.

2. The applicant has prayed for the following relief(s):

“In the aforementioned facts and circumstances, the Applicant herein humbly prays before this Hon'ble Court to pass following orders which are made in addition and/or in alternate to each other:

(a) This Hon'ble Court may kindly be pleased to invoke its power under Section 11(5) & (6) of the Arbitration & Conciliation Act, 1996 (as amended) and in exercise thereof be pleased to appoint Sole Arbitrator to adjudicate the dispute and difference arisen between the parties as stipulated by the terms and conditions therein of the subject Iffco Tokio Industrial All Risk Policy bearing Policy No. 12632289 dated 18.07.2023, in the interest of justice; and

(b) This Hon'ble Court may kindly be pleased to pass such further orders as may deem fit in the facts and circumstances of this case.”

3. The facts, in brief, is that the applicant i.e., M/s Balaji Power, a unit of M/s Hira Ferro Alloys Limited, is engaged in the business of electricity generation, whereas respondent No. 1 i.e., IFFCO -Tokio General Insurance Co. Ltd., a company incorporated under the provisions of the Companies Act, 1956, is engaged in the business of issuance of insurance policies, and respondent No. 2 is its Branch Head for Raipur region. On 18.07.2023, the applicant obtained an Iffco Tokio Industrial All Risk Policy bearing Policy No. 12632289, valid from 20.07.2023 to 19.07.2024, upon payment of premium amounting to Rs. 11,69,135/-. The said policy covered material damage up to Rs. 71,86,76,446/-, machinery breakdown up to Rs. 44,94,63,000/- and Business Interruption under Fire Loss of Profit (FLOP) up to Rs. 16,00,00,000/-. The applicant operates a Biomass Power Plant utilizing biomass such as rice husk for generation of electricity and has installed a Turbine Generator manufactured by M/s Triveni Turbines Ltd. (OEM), which is also covered under the said policy. That on 04.08.2023, a sudden fire broke out in the Applicant’s plant causing extensive material damage to the TG Building and entire power plant, which was immediately intimated to the Respondents vide email dated 04.08.2023. Pursuant thereto, the Respondents appointed M/s Proclaim Insurance Surveyors & Loss Assessors Pvt. Ltd. for assessment; however, the claim was registered only under Material Damage vide Claim No. 12006257, ignoring the Fire Loss of Profit aspect despite clear indication that fire was the root cause.

4. Further the applicant’s plant remained shut for more than six months as the turbine was sent to the OEM at Bengaluru for repairs, resulting in substantial business losses. The Applicant, through its internal committee report (Annexure A-3), as well as the Root Cause Analysis (RCA) report prepared by the OEM (Annexure A-5), consistently established that the cause of the incident was external fire. Despite submission of multiple evidences including DCS data, relay data, log sheets and video recordings, the Respondents and their appointed surveyor ignored the same and attempted to classify the incident under Machinery Breakdown to avoid liability under FLOP. The applicant reiterated its claim vide email dated 09.01.2024, upon which a separate Claim No. 12006735 was allotted for FLOP. Further, in the meeting dated 16.02.2024, the Respondent