INDIA Law and Practice Contributed by: Neeraj Tuli, Rajat Taimni, Amrit Singh and Anuj Bahukhandi, Tuli & Co
quantum and the coverage position is relatively clear, parties often seek to resolve the claim through nego- tiations following the surveyor’s or loss assessor’s assessment. In larger and complex claims, this may involve several rounds of discussions and revised assessments before either party takes a final posi- tion. Where there is a significant dispute on coverage, liability or the application of an exclusion, settlement becomes more difficult, and parties are more likely to preserve their respective positions and pursue the dis- pute through the contractual or statutory mechanism available to them. There is an increased appetite to consider mediated settlements in view of the costs and the uncertainties associated with litigation in India. The decision to settle or proceed therefore depends on the merits of the claim, the amount in dispute and the significance of the issue beyond the individual claim. 2. Jurisdiction and Choice of Law 2.1 Choice of Law in Insurance Contracts An Indian insurance policy issued by an Indian insurer to an Indian insured must be governed by Indian law, other than for marine insurance contracts. The gov- erning law of a reinsurance contract is left to the ced- ant and the reinsurer to determine. Party autonomy in relation to choosing foreign law to apply to an Indian insurance contract is strictly limited to marine insurance. 2.2 Jurisdiction and Forum Selection Indian Courts generally uphold jurisdiction clauses in insurance contracts where the chosen Court is other- wise competent to entertain the dispute, provided the jurisdiction remains within India. Parties may, by agreement, select one among several Courts having jurisdiction, but cannot confer jurisdic- tion on a Court which would not otherwise possess it or has no legal ties with the case. The intention to make a jurisdiction clause exclusive is determined from the language of the contract and must be suffi-
ciently clear. The Supreme Court has consistently rec- ognised this principle within the insurance context. In New India Assurance Co Ltd v T K Nanjunda Setty and Sons , 1963 SCC OnLine Kar 104, the Court upheld clauses requiring proceedings under insurance poli- cies to be instituted in specified Courts, where those Courts otherwise had territorial jurisdiction. More recently, in 2025, in Rakesh Kumar Verma v HDFC Bank Ltd , 2025 SCC OnLine SC 752, the Supreme Court reiterated that an exclusive jurisdiction clause is enforceable where the selected Court is competent to exercise jurisdiction, and the agreement demonstrates an intention to exclude other competent forums. Party autonomy in matters of jurisdiction is generally respected, subject to mandatory law and public policy and when it remains within India. Where no express choice has been made, the Courts determine territorial jurisdiction by applying the applicable statutory rules having regard to factors including the place where the contract is executed or performed, the location of the risk, and the place where the opposite party actually and voluntarily resides or carries on business, or per- sonally works for gain. Jurisdiction clauses are commonly found across life, general and health insurance policies, particularly in retail policies, while commercial insurance and rein- surance contracts may contain more standardised jurisdiction and arbitration provisions. Reinsurance contracts may confer jurisdiction to foreign institu- tions. 2.3 Cross-Border Disputes and Conflicts Issues An Indian party and a foreign party can legally choose foreign law as the governing law and select a foreign jurisdiction or foreign arbitral seat for their contract. The only exception is where a specific mandatory Indi- an statute overrides party autonomy, such as Section 46 of the Insurance Act, 1938 (“Insurance Act”) that provides for applicability of Indian law for direct non- marine insurance policies issued in India, or where the agreement violates fundamental Indian public policy. Parties’ contractual choice of governing law, jurisdic- tion and, where applicable, arbitral seat is generally upheld by Indian Courts. This is particularly relevant
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