Interpretation Of Arbitration Clauses Under Insurance Policies

INTRODUCTION

Recently, the Hon'ble Supreme Court of India, in the case titled Oriental Insurance Company Vs M/S Narbheram Power & Steel Ltd. bearing Civil appeal no.2268 of 2018 (arising out of S.L.P.(c) No.33621 of 2017), adjudicated upon the interpretation of arbitration clauses under Insurance agreements/ contracts.

RELEVANT FACTS

In the present case the Respondent - M/S Narbheram Power & Steel Pvt. Ltd (herein after referred as "NPSL") entered into an Insurance Policy pertaining to "Fire Industrial All Risk Policy" (herein after referred as the "said policy") with the Appellant - Oriental Insurance Company ("Appellant") in respect of the factory situated in Odisha.

In October 2013, a cyclone affected large parts of the state including NPSL's factory. NPSL suffered damages estimated at INR 39,336,224. Accordingly, the appellant being the Insurer was informed and a surveyor was appointed. Based on the report of the surveyor, NPSL requested the Insurer to