JUDGMENT

ANISH DAYAL, J.

1. This appeal has been filed by appellant under Section 37 of the Arbitration and Conciliation Act, 1996 [‘A&C Act’] assailing the impugned judgment dated 18th September 2025 passed by the Single Judge of this Court in OMP (COMM.) No.194/2022, dismissing the objections filed by the appellant under Section 34 of A&C Act that sought setting aside of the arbitral award dated 28th July 2021 and order dated 28th August 2021 passed by the Arbitral Tribunal [‘AT’].

Factual Background

2. Appellant is a Government of India undertaking and is the insurer of the policy in question. Respondent, the insured, is company incorporated in India engaged in business of manufacturing stainless steel, billets, flats, HR and CR coils, bright bars, pipes and allied products, with its factory in Paonta Sahib, District Sirmour, Himachal Pradesh.

3. The policy in question is a “Standard Fire and Special Perils Policy” which covered the risks of plant, machinery, stocks and building on a reinstatement basis at the factory of the respondent. On 27th August 2011, respondent intimated the appellant that during the intervening night between 26th and 27th August 2011, incessant rain led to heavy floods, resulting in destruction and damage to respondent’s plant, machinery, equipment, stocks, and building. Surveyors were appointed by the appellant for assessment of loss. Since the policy was on reinstatement basis and respondent had not reinstated the damaged plant, machinery within 12 months, surveyor assessed the loss both on market value basis at Rs.10,45,03,252/- and on reinstatement basis at Rs. 19,84,08,960/-.

4. Appellant alleged that respondent, being satisfied with surveyor’s assessment on market value basis, issued a Consent Letter dated 18th January 2014 accepting Rs.10,45,00,000/- towards full and final settlement. Appellant paid Rs. 8,92,73,204/- on 25th April 2014, and Rs.1,03,92,758/- on 13th August 2014, and the balance amount was adjusted towards reinstatement premium of Rs.7,26,796/- and value of salvage of Rs. 41,07,242/- which was handed over to respondent.

5. After about 42 months from the date of issuance of the Consent Letter and 34 months from receipt of final settlement amount, respondent, vide letter dated 21st June 2017, alleged that the consent had been signed under coercion, financial stress and under threat of repudiation. A copy of the surveyor report was sought but no additional claim was made.

6. Vide letter dated 11th August 2017, respondent invoked the arbitration clause under the policy, nominating their arbitrator. Appellant nominated its arbitrator. Both the nominated arbitrators failed to appoint the Presiding Arbitrator. Respondent approached this Court under Section 11 of A&C Act, and by order dated 18th December 2018, the Court appointed Sh. Ajit Prakash Shah, former Chief Justice of this Court, as the Presiding Arbitrator.

7. Vide award dated 28th July 2021, AT directed appellant to pay respondent a sum of Rs. 33,26,25,300/- along with interest @ 9% pa from 01st February 2012, till realization of the amount.

8. Respondent filed an application under Section 33(a) of A&C Act, seeking correction of a typographical error relating to estimation of loss. By order dated 28th August 2021, AT allowed the application, correcting paragraph 212 of the Award, the operative portion of the award remained unaltered.

9. Objections under Section 34 of A&C Act were filed before this Court and vide impugned judgement, the same were rejected and enforcement petition [OMP(ENF.) (COMM.) 21/2022] was allowed.

Submissions on behalf of appellant

10. Counsel for appellant through their written submissions and oral arguments have, inter alia, submitted as under:

10.1 The impugned award was in contravention of the fundamental policy of Indian law besides being patently illegal and perverse, as AT had arrived at their findings on a completely perverse reasoning, contrary to pleadings and evidence on record;

10.2 There wer