The Delhi High Court has ruled in favor of the petitioner, Numero Uno Clothing Ltd., in a dispute with United India Insurance Co. Ltd. over the existence of an arbitration agreement in two insurance policies. The policies, issued on January 31, 2024, contained arbitration clauses, despite the existence of an IRDAI Circular dated October 27, 2023, which allegedly superseded arbitration clauses in fire insurance policies. The respondent, United India Insurance, had argued that the circular rendered the arbitration clauses in the policies ineffective, but the court rejected this argument.
The court held that by issuing policies after the circular with arbitration clauses intact, the respondent had effectively waived its right to rely on the circular to deny the existence of an arbitration agreement. The court noted that party autonomy is a core principle of arbitration law, and if the respondent intended to rely on the circular, it should not have included arbitration clauses in the policies issued after the circular.
The court also observed that the circular would apply to policies existing as on the date of the circular or on the date of being gazetted, but where a policy had been issued after the circular and still contained an arbitration clause, there was no justification for the insurer to argue that the clause stands deleted unless it plainly intended to retain arbitration.
The court allowed the petition and directed the respondent to appoint its nominee arbitrator within two weeks, and the two nominee arbitrators to appoint the presiding arbitrator within a further two weeks. The court’s decision emphasizes the importance of party autonomy in arbitration and the need for insurers to clearly indicate their intention to rely on regulatory circulars when issuing policies.
The case highlights the complexities of arbitration law and the need for careful consideration of regulatory circulars and their impact on insurance policies. The court’s decision provides clarity on the issue and sets a precedent for similar cases in the future. The petitioner was represented by a team of advocates, including Saurav Agarwal and Ritika Jhurani, while the respondent was represented by Senior Advocate Vishnu Mehra. The case was decided on November 20, 2025, and is reported as Numero Uno Clothing Ltd. v. United India Insurance Co. Ltd., 2025 SCC OnLine Del 8704.