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HIGH COURT OF CALCUTTA
S. P. Mitra
NEW INDIA ASSURANCE CO. LTD. - Appellant
Versus
DALMIA IRON AND STEEL LTD. - Respondent
Award Case 5 Of 1961
Decided On : MAY 19, 1964
ARBITRATION - INSURANCE POLICY - AWARD - SETTING ASIDE - JURISDICTION OF ARBITRATORS - WAIVER - ESTOPPEL - ACQUIESCENCE - ABSENCE OF PROTEST OR OBJECTION - CONSTRUCTION OF POLICY - ERROR OF LAW ON THE FACE OF THE AWARD - INHERENT LACK OF JURISDICTION.
Fact of the Case:
The petitioner took out an insurance policy from the respondent for an International Harvester or Motor Tractor Crane. The policy contained an arbitration clause. A dispute arose between the parties as to the quantum of loss suffered by the petitioner. The petitioner appointed its arbitrator, and the respondent failed to appoint its arbitrator within time. An application was made to the court, and another arbitrator was appointed. The two arbitrators selected their umpire. The umpire awarded Rs. 12,200/- for costs of repairs, Rs. 16,500/- for hiring cranes to replace the damaged crane, and Rs. 11,300/- for costs of and incidental to the reference. The petitioner filed an application to set aside the award, contending that the umpire had no jurisdiction to award Rs. 16,500/- for hiring charges as it was a consequential damage not covered by the policy.
Finding of the Court:
The court held that the petitioner had waived its right to object to the umpire's jurisdiction to award Rs. 16,500/- for hiring charges by failing to raise the objection at an early stage of the proceedings. The court also held that the umpire had jurisdiction to decide whether the claim for hiring charges came within the scope of the insurance policy, and that the umpire's decision on this issue was not an error of law apparent on the face of the record.
Issues: 1. Whether the petitioner had waived its right to object to the umpire's jurisdiction to award Rs. 16,500/- for hiring charges by failing to raise the objection at an early stage of the proceedings? 2. Whether the umpire had jurisdiction to decide whether the claim for hiring charges came within the scope of the insurance policy? 3. Whether the umpire's decision on this issue was an error of law apparent on the face of the record?
Ratio Decidendi: 1. The court held that the petitioner had waived its right to object to the umpire's jurisdiction to award Rs. 16,500/- for hiring charges by failing to raise the objection at an early stage of the proceedings. The court relied on the principles of waiver, estoppel, acquiescence, and absence of protest or objection. The court noted that the petitioner had allowed the claim to be raised before the arbitrators and the umpire without objection and had participated in the adjudication of this dispute by the arbitrators and the umpire. 2. The court held that the umpire had jurisdiction to decide whether the claim for hiring charges came within the scope of the insurance policy. The court noted that the arbitration clause in the insurance policy was fairly wide and covered 'all differences' arising out of the policy. 3. The court held that the umpire's decision on this issue was not an error of law apparent on the face of the record. The court noted that there was no statement or indication in the body of the umpire's award as to how the relevant terms in the insurance policy had been construed by him.
Final Decision: The court dismissed the petitioner's application to set aside the award with costs.
( 1 ) THIS is an application for setting aside the award of an umpire. The petitioner took, out an Insurance Policy from the New India Assurance Co. Ltd. in respect of an International Harvester or Motor Tractor Crane. The Policy was issued on June 4, 1959. On December 19, 1959, the petitioner informed the Insurance Co. that the Harvetser had met with an accident. The claim forms were sent by the Insurance Co. and were submitted by the petitioner duly filled in There were disputes and differences between the parties as to the quantum of loss suffered by the petitioner. The Insurance policy contained an arbitration clause. In terms of the arbitration agreement, the petitioner appointed its arbitrator. The respondent failed to appoint its arbitrator within time. An application was made to this Court and ultimately, through the intervention of the. Court, another arbitrator was appointed. The two arbitrators thereupon selected their umpire. The present application is directed against the umpire's award. The umpire, it appears, has awarded: (a) Rs. 12,200/- on account of costs of repairs; (b) Rs. 16,500/- in respect of the claim made in paragraph 17 of the Statement of Claim; and (c) Rs. 11,300/- for costs of and incidental to the reference,
( 2 ) THE award of Rs. 16,500/- arises out of a claim for hiring cranes to replace the damaged crane while the sanction for repairs was being withheld by the insurer.
( 3 ) MR. A. C. Sircar, learned counsel for the petitioner, has urged before me that this award of Rs. 16,500/- should never have been made by the umpire. Firstly, this is an award with regard to a dispute which never arose before reference to arbitration, and, secondly under the policy of insurance (Section I), the Company had no liability for consequential damages.
( 4 ) LEARNED counsel for the respondent does not dispute that the claim arising out of hiring charges was made only in the Statement of Claim submitted to the arbitrator appointed by the insured, In other words, the dispute with respect to this claim did not arise before the single arbitrator entered into the reference. The same Statement of Claim, was also filed before the two arbitrators and the umpire subsequently. Learned counsel's main contention is that it is no longer open to the petitioner to object to the award of Rs. 16,500/- inasmuch as the petitioner allowed the claim to be raised before the arbitrators and the umpire without objection and participated in the adjudication of this dispute by the arbitrators and the umpire (vide paragraph 20 of the affidavit-in-opposition of Satish Chandra Gupta affirmed on the 20th April 1964 ).
( 5 ) MY attention has been invited to the relevant documents in this connection. I find that the claim relating to hiring charges has been made in paragraphs 15, 16, 17 and 19 of the Statement of Claim. These paragraphs have been dealt with in paragraphs 9 and 13 of the counter-statement but no objection as to the jurisdiction, of the arbitrators or the umpire to entertain this claim has been taken.
( 6 ) THEN on the 22nd July, 1961, issues were raised before the arbitrators and the umpire who were all sitting together and were settled. From paragraph 14 of the petition I find that the second issue was as follows: "is the claimant entitled to claim the sum of Rs. 40,903. 60 np. as pleaded in paragraph 17 of the statement of claim?" There was no protest on behalf of the petitioner either as to the framing of Issue No. 2 or the determination thereof. Thereafter, I am told, evidence was led on behalf of both the parties and recorded by the arbitrators and the umpire. It was only on the 5th March, 1963, when arguments were being heard that learned counsel appearing for the Insurance Company for the first time submitted to the arbitrators and the umpire that the claim concerning hiring charges was not covered by the insurance policy. In fact this submission of learned counsel for the petitioner cannot be said to b
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