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M/S Papcoat India Pvt. Ltd. vs. The United India Insurance Co. Ltd.

Arbitration Petition · 2026:DHC:7751Decided 10 Sept 2026New Delhi Bench
ARB.P. 1257/2026CNR: DLHC010335412026
Justice Om Prakash Shukla

Background

The petitioner sought appointment of an arbitrator to resolve a dispute under an insurance policy (the "United Bharat Sookshma Udyam Suraksha Policy"). The insurer objected that the policy's own arbitration clause required each party to first nominate its own arbitrator, who would then jointly appoint a presiding arbitrator: a mechanism the parties had not yet followed.

Decision Breakdown

Since the contractually prescribed two-arbitrator nomination mechanism had not been attempted first, the petitioner's counsel sought leave to withdraw the petition, with liberty to nominate its arbitrator directly and approach the Court again only if the process failed. The respondent's counsel undertook that, once its arbitrator was nominated, it would name its own arbitrator within two weeks so the two could jointly appoint a presiding arbitrator. The Court granted this leave and liberty and dismissed the petition as withdrawn.

Lesson Learnt

Before rushing to court for appointment of an arbitrator, parties must first follow any arbitrator-nomination mechanism specifically laid out in their contract (such as an insurance policy): courts will send parties back to that process if it hasn't been tried.

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