* IN THE HIGH COURT OF DELHI AT NEW DELHI % Judgment reserved on: 24.03.2026 Judgment pronounced on: 02.04.2026 + O.M.P. (COMM) 182/2023, I.A. 9296/2023, I.A. 7305/2024 &

I.A. 7697/2026 THE ORIENTAL INSURANCE COMPANY LTD. .....Petitioner Through: Mr. Abhishek K Gola, Advocate.

versus JINDAL INDIA LIMITED .....Respondent Through: Mr. Ishaan Chhaya, Advocate.

CORAM:

HON'BLE MR. JUSTICE AVNEESH JHINGAN

J U D G M E N T

1. The present petition is filed under Section 34 of the Arbitration & Conciliation Act, 1996 (for short „the Act‟) for setting aside of the arbitral award dated 10.02.2023.

2. The brief facts are that the respondent/claimant is engaged in the manufacturing of Galvanised Steel Sheets, Corrugated Sheets & Coils and operates an Aluminium Foil division at NH-6 Mouza Jangalpur Hawra, West Bengal comprising of an old mill and a new mill. The respondent took an Industrial All Risk Policy from the petitioner valid from 13.01.2017 to 12.01.2018. The policy covered risk of fire, machinery breakdown and indemnity for business loss for a period of six months on account of business interruption i.e. Fire loss of Profit (FLOP).

2.1 On the night of 27.09.2017 a fire broke out in the new unit of aluminium foil division. The petitioner appointed a surveyor (hereinafter referred to as „first surveyor‟). The survey report dated 25.12.2018 assessed the loss to the tune of Rs.13,31,13,073/- against the claim of Rs.19,31,69,106/-. The petitioner raised certain queries with regard to the method of calculation of Business Interruption Loss (for short „BIL‟). The first surveyor gave two additional reports dated 12.10.2019 and 18.11.2019 enhancing the business loss to Rs.17,02,77,352/- and Rs.17,38,24,536/- respectively. In both reports, a disclaimer was made that the first surveyor stood by the initial report dated 25.12.2018. On being dissatisfied with the report, the petitioner under Section 64UM of the Insurance Act, 1938 (for short „1938 Act‟) appointed a second surveyor who assessed the BIL to the tune of Rs. 3,84,80,892/- and this amount was paid. Dissatisfied with the loss assessed, the respondent initiated arbitration proceedings by serving a notice under Section 21 of the Act and claimed an amount of Rs.13,53,43,644/- towards BIL alongwith interest. The arbitrator framed the following issues:

(I) Whether the present claim is barred by limitation?

OPR.

(II) If the answer to Issue No. (I) is in negative whether the dispute under the Industrial All Risk Policy bearing No.

31170/11/2017/711 is arbitrable and if so, to what effect?

(III) If the answer to Issue No. (II) is in affirmative whether the payment of Rs.3,84,80,892/- to the Claimant by the Respondent and the consequent issuance of discharge vouchers stopped the Claimant from raising the present claim, if so, to what effect? OPR.

(IV) If the answer to Issue No. (III) is in negative to what amounts is the Claimant entitled to under the present claim, if so, to what effect? OPC.

(V) Is the Claimant entitled to interest on the claim so awarded and if so, at what rate and for what period? OPC.

(VI) Relief.

3. The claim was held to be within limitation and the dispute to be arbitrable. Issue no. 3 was decided in favour of the respondent holding that the respondent by receiving an amount of Rs.3,84,80,892/- was not estopped from raising the dispute. The arbitrator held that the appointment of the second surveyor without recording reasons or affording an opportunity of hearing to the respondent was not valid. Proceeding on the basis that the petitioner had accepted the report of the first surveyor dated 25.12.2018 for loss of machinery assessed at Rs.27 crores and had found fault only with the assessment of BIL, the arbitrator awarded the assessed amount of Rs.13,31,13,073/- and the amount of Rs.3,84,80,892/- already paid was to be adjusted. Interest @ 7% per annum was granted in case the payment was not made within one month from the date of the award.

4. Learned counsel for the petitioner contended