Delhi HC: Arbitration Invoked for Unpaid ESI Super Speciality Treatment Bills

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Published 13 October 2026

Statutes: Arbitration and Conciliation Act, 1996 — s.11(5), s.11(6)
Source: Indian Kanoon (Delhi HC)

Bottom Line Up Front (BLUF)

The Delhi High Court, in Balaji Medical And Diagnostic Research v. Employees State Insurance Corporation, entertained a petition under Section 11(5) and (6) of the Arbitration and Conciliation Act, 1996, for the appointment of a sole arbitrator. The petitioner sought resolution for unpaid bills for super speciality treatment services provided to ESI beneficiaries, which the respondent denied were pending.

Ratio Decidendi · Legal Principle Established

The core legal principle is that a petition for the appointment of an arbitrator under Section 11(5) and (6) of the Arbitration and Conciliation Act, 1996, is maintainable when one party invokes an arbitration clause in an agreement for resolution of disputes, and the other party denies the existence of a dispute or refuses to concur with the appointment of an arbitrator.

Practice & Procedural Impact for Advocates

Advocates should ensure clear invocation of arbitration clauses, specifying the dispute and proposing an arbitrator. Litigants facing non-payment under service agreements with arbitration clauses can seek judicial intervention for arbitrator appointment if the counterparty disputes the claim or refuses arbitration. Counsel must verify the applicable procedural law (BNSS/CrPC) for new proceedings and evidence law (BSA/IEA) for new proceedings, though the Arbitration Act remains unchanged.

Key Legal Takeaways

1Section 11(5) and (6) of the Arbitration and Conciliation Act, 1996, is the appropriate remedy for appointing an arbitrator when a party refuses to concur.
2A clear notice invoking arbitration, detailing the dispute and proposing an arbitrator, is crucial.
3Denial of pending bills by the respondent does not preclude the court from considering the appointment of an arbitrator under the Act.

The Legal Issue This petition, filed under Section 11(5) and (6) of the Arbitration and Conciliation Act, 1996, sought the appointment of a sole arbitrator. The petitioner, Balaji Medical And Diagnostic Research, had an agreement with the Employees State Insurance Corporation (ESIC) to provide super speciality treatment services to ESI beneficiaries. The dispute arose from the petitioner's claim that complete payments for services rendered between 2013 and 2020 were not reimbursed, leading them to invoke Clause 35 of the agreement's arbitration clause. ESIC, in its reply, denied any pending bills and refused to concur with the proposed arbitrator, necessitating judicial intervention for the appointment.

Court's Reasoning The Delhi High Court entertained the petition, acknowledging the petitioner's invocation of the arbitration clause and the respondent's refusal to concur with the appointment of an arbitrator. The court's role under Section 11(5) and (6) of the Arbitration and Conciliation Act, 1996, is to appoint an arbitrator when the parties fail to agree on one, or when one party fails to act as per the appointment procedure. The mere denial of the claim by the respondent does not negate the existence of a dispute that warrants arbitration, especially when an arbitration agreement is in place. The court's primary consideration at this stage is the existence of a valid arbitration agreement and the failure of the parties to appoint an arbitrator as per the agreement.

Why It Matters This case highlights the procedural recourse available to parties under the Arbitration and Conciliation Act, 1996, when a dispute arises from a contractual agreement containing an arbitration clause. It reinforces that a party cannot unilaterally refuse arbitration by simply denying the claim. The court will step in to ensure the arbitration mechanism, agreed upon by the parties, is operationalized. For advocates, it underscores the importance of a clear and timely invocation of arbitration and the proper procedure for seeking judicial appointment of an arbitrator. For new proceedings, counsel should confirm the applicable procedural law (Bharatiya Nagarik Suraksha Sanhita or Code of Criminal Procedure) and evidence law (Bharatiya Sakshya Adhiniyam or Indian Evidence Act), though the Arbitration and Conciliation Act, 1996, remains unchanged.