Dispute Is Non-Arbitrable When There Is Denial Of Claim By Insurance Co. Under Policy

Last updated: 13 January 2023
Quick Summary
The Bombay High Court has ruled that if an insurance company denies liability for a claim entirely, rather than disputing the amount payable, the dispute is not arbitrable. This decision stems from a case where an insurer repudiated a claim as 'No Claim', despite a surveyor's assessment. The court found that the policy's arbitration clause only applied to disputes over the quantum of payment when liability was admitted, not when liability itself was disputed.

Court :
Bombay High Court

Brief :
THE HON'BLE BOMBAY HIGH COURT HELD THAT –when an Insurance Company has not accepted the liability under the Insurance Policy and has repudiated the claim as "No Claim", then such denial of claim would not itself amount to an arbitrable dispute. The Insurance Policy clearly provided that if the Insurance Company has disputed or not accepted the liability under the policy, there shall be no reference to Arbitration.

Citation :
M/S. MALLAK SPECIALITIES PVT LTD.(A) VS. THE NEW INDIA ASSURANCE CO.LTD. .. RESPONDENT

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