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SUPREME COURT OF INDIA
ABHAY S. OKA, UJJAL BHUYAN, JJ.
Arabian Exports Private Limited – Appellant
Versus
National Insurance Company Ltd. – Respondent
Civil Appeal Nos. 6372-6373 of 2025 (@ Special Leave Petition (Civil) Nos. 16907-16908 of 2012)
Decided On : 06-05-2025
Arbitration and Conciliation Act, 1996 – Section 11(6) – Appointment of Arbitrator – Doctrine of Kompetenz-Kompetenz is now firmly embedded in Arbitration Jurisprudence in India – Arbitral Tribunal is competent to rule on its own jurisdiction including on the issue of existence or validity of an arbitration agreement – Object is to minimize judicial intervention which is an acknowledgment of concept of party autonomy – High Court was wrong in rejecting Section 11(6) applications of appellant – Question as to whether appellant was compelled to sign standardized voucher/advance receipt forwarded to it by respondent out of economic duress and whether notwithstanding receipt of Rs.1,88,14,146.00 as against claim of Rs. 5,71,69,554.00 claim to arbitration is sustainable or not are clearly within domain of Arbitral Tribunal – Impugned order of High Court set aside – A retired Judge of Bombay High Court appointed as sole Arbitrator. (Paras 40, 41, 42 and 43)
Facts of the case:
Short issue for consideration in these appeals is whether a dispute raised by an insured after giving a full and final discharge voucher to Insurer can be referred to arbitration.
Findings of Court:
It would be appropriate for this Court to appoint a retired Judge of Bombay High Court as sole Arbitrator. Accordingly, we appoint Justice (Retd.) Suresh Chandrakant Gupte (Mobile No.- 9821010104) as the sole Arbitrator. Parties to report to the sole Arbitrator by 15.05.2025.
Result : Appeals allowed.
Based on the legal document provided, here are the key points regarding the appointment of the arbitrator and the resolution of the dispute:
JUDGMENT
UJJAL BHUYAN, J.
Leave granted.
2. These appeals by special leave are directed against the order dated 02.12.2011 passed by the High Court of Judicature at Bombay in Arbitration Application Nos. 186-187 of 2011.
3. In this case, delay was condoned and notice was issued on 11.05.2012.
4. The short issue for consideration in these appeals is whether a dispute raised by an insured after giving a full and final discharge voucher to the insurer can be referred to arbitration.
5. As we shall deliberate upon, this issue is no longer res integra.
6. However, for a proper perspective, relevant facts may be briefly noted.
7. Appellant is a company incorporated under the provisions of the Companies Act, 1956. It is engaged in the business of exporting meat and meat products. For this purpose, appellant used to process the meat and store the same at its factory premises at Taloja in the State of Maharashtra.
8. On 08.10.2004, appellant took a comprehensive Standard Fire and Special Perils Policy bearing No. 260301/11/04/3100585 from the respondent towards insuring the meat processing and cold storage unit as also the building, plant and machinery, furniture, fixtures and fittings in the Taloja plant for an amount of Rs.3,28,55,000.00 which was for the period from 09.10.2004 to 03.10.2005.
9. Appellant also took a Fire Declaration Policy bearing No. 260301/11/04/3301441 insuring all its stock-in-trade and finished products stored in the cold storage facility at its factory premises at Taloja. This policy was for an amount of Rs.5,76,85,000.00 and covered the period from 15.03.2005 to 15.03.2006.
10. It is stated that appellant had paid the insurance premium towards both the insurance policies.
11. On 26.07.2005, there was very heavy and unprecedented rainfall in several parts of Maharashtra including at Taloja. Because of such unprecedented and very heavy rainfall, the factory premises at Taloja was completely flooded and got submerged under water for several hours. It is stated that all communication lines had broken down and there were no means of communication to and fro the Taloja plant leaving the incident unnoticed till 28.07.2005. It is further stated that appellant had suffered severe loss due to the damage caused to the factory building, plant and machinery, furniture, fixtures and accessories as well as the stock lying at the Taloja plant.
12. Appellant had informed the respondent on 29.07.2005 regarding the damage suffered at the Taloja plant and requested the respondent to depute a surveyor to assess the damage. Appellant claimed loss and damage to the plant and machinery etc. under the Standard Fire and Special Perils Policy for an amount of Rs. 56,07,027.00. Appellant also claimed loss and damage qua the stock in cold storage under the Fire Declaration Policy for an amount of Rs. 5,15,62,527.00
13. It is stated that on 28.07.2005, Dr. A.S. Patil (it is not stated who he was or who had authorized him) had inspected the factory premises at Taloja and after inspecting the stock-in-trade certified that the same was unfit for human consumption. On 29.11.2005, Chempro Inspection Private Limited, the surveyor appointed by the respondent, conducted a survey at the Taloja plant. In its report dated 29.11.2005, the surveyor acknowledged the loss suffered by the appellant.
14. Unfortunately, despite repeated requests and reminders by the appellant, respondent failed to settle the claims of the appellant.
15. After a considerable delay, appellant was presented with an undated and standardized voucher/advance receipt for a sum of Rs. 1,88,14,146.00 sometime in December, 2008.
16. Due to financial strain caused by the delay on the part of the respondent to settle the claims coupled with the pressure exerted by various bankers and creditors, appellant was left with no other option but to sign and submit to the respondent the said undated and standardized voucher/advance receipt on 12.12.2008 for an amount of Rs. 1,88,14,146.00 being claimed under
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