The tribunal can appoint an expert to aid its understanding, and an insurer is not bound by the surveyor's report if it relies on valid grounds to depart from it.

JUDGMENT :

SANDEEP V. MARNE, J.

1. Petitioner-Insurance Company has filed the present Petition under Section 34 of the Arbitration and Conciliation Act, 1996 (Arbitration Act) challenging unanimous Award of the Three-Member Arbitral Tribunal dated 20 September 2022. By the impugned Award, the Tribunal has awarded a sum of Rs.30,99,555/- in favour of the Respondent alongwith interest @ 12.5% p.a. from 16 August 2016 till realisation. The Arbitral Tribunal has also awarded costs of Rs.29,44,021/- to the Respondent.

2. Petitioner is a nationalised general insurance company. The Respondent is an incorporated entity engaged in manufacturing of various types of wooden boards. The Respondent has its manufacturing plants at Pantnagar (Uttarakhand), Coimbatore (Tamilnadu) and Bhiwandi (Maharashtra). The Respondent availed insurance cover under the Policy named -Industrial All Risk Policy dated 7 February 2015 from the Petitioner, which covered its factory at Pantnagar (Uttarakhand). On 6 April 2015 a fire broke out in Respondent’s plant at Pantanagar. The fire took place in the hot press loader and un-loader section of MDF production. Although the main plant was not damaged, there was substantial damage to the parts and components and some damage was also caused to six Platens and there was loss of Hydraulic Oil and Thermic Fluid. On the date of the incident, Respondent informed the Petitioner about the same. As per the provisions under Section 64-UM of the Insurance Act, 1938 (Insurance Act) a Surveyor was appointed by the Petitioner for assessment of loss/damage caused to the Respondent. On 8 April 2015, the Surveyor carried out first physical verification of the affected site. The Surveyor visited the site on 6^th and 7^th July 2015 for second verification. He thereafter visited the affected site on 13/14^th April 2016 for the third time. On 30 May 2016, Surveyor issued final survey report assessing net loss payable by the Petitioner to the Respondent at Rs.39,82,897/-. Petitioner paid to the Respondent sum of Rs.31,91,305/-. The Respondent invoked arbitration clause and a three-member Arbitral Tribunal was constituted by the Respondent comprising of former Chairman and former Assistant General Manager, who in turn nominated the Presiding Arbitrator. The Respondent filed Statement of Claim claiming sum of Rs.55,07,924/- in following terms:-

3. The Petitioner filed its Statement of Defence. Upon completion of the pleadings, the Arbitral Tribunal in its second meeting opined that appointment of Expert was warranted and proceeded to finalise the points for determination. Petitioner objected to appointment of Expert and the objection was rejected by the Arbitral Tribunal. By order dated 25 March 2018, Arbitral Tribunal appointed Mr. Milind Bhatavdekar, as an Expert. The Expert visited the site of the incident and prepared report dated 31 August 2018. The Expert also participated in the meeting of Arbitral Tribunal. The Respondent filed affidavit of evidence. Petitioner also examined witnesses. The Expert appointed by the Arbitral Tribunal was also questioned by the Tribunal.

4. The Arbitral Tribunal thereafter made an Award dated 20 September 2022 partly allowing the claim of the Respondent. The Arbitral Tribunal has awarded total sum of Rs.30,99,555/- in favour of the Respondent in respect of following claims:

a) Platens a sum of Rs.9,39,000/-

b) Hydraulic Oil Rs.18,04,807/-.

c) Thermic Fluid Rs.8,47,896/-;

d) VFD AC Drive