By way of present petition under Section 11(4)(a) of the Arbitration & Conciliation Act, 1996, the petitioner seeks appointment of an Arbitrator on behalf of the respondent, allegedly, on the ground that despite notice, respondent had failed to appoint an Arbitrator in terms of clause 13 of the Contract of Insurance.

It is not in dispute that the petitioner who has a factory at B-70, Sector-57, Noida (U.P.) had got the same insured against fire and so also the stocks, plant, machinery and office equipments vide an insurance policy No.361303/11/03/3100322 issued in its favour by the respondent. It is also not in dispute that a fire broke out in the aforementioned premises on September 13, 2004 resulting in extensive damage to the building, office equipment, plant, machinery and stocks lying therein. The petitioner lodged an insurance claim of Rs.3,60,60,694/- with the respondent who in order to get the loss assessed appointed a surveyor by the name of Rakesh Kapoor & Co. The surveyor assessed the loss to the tune of Rs.1,71,23,531/-. Pursuant thereto, respondent offered to pay a sum of Rs.1,50,72,523/- to the petitioner which it accepted by way of full and final settlement and also issued a receipt dated March 29, 2006 in token of satisfaction of its claim. However, ten days after having accepted the aforesaid sum of Rs.1,50,72,523/-, on April 07, 2006 petitioner wrote a letter to the respondent stating therein that it had accepted the lesser amount than that claimed by it, as it was in acute need of funds and had issued the discharge vouchers without prejudice to its right to take recourse to law to recover differential amount, interest and liquidated damages. Hence, it asked the respondent to provide it with details of deduction along with reasons thereof. This letter was followed by a notice to the respondent dated October 26, 2007 alleging therein that the letter of acceptance whereby the petitioner had agreed to receive the sum of Rs.1,50,72,523/- was obtained from it under duress and coercion by the respondent. Accordingly, by virtue of the notice, petitioner invoked the arbitration clause, informed the respondent that it had already appointed Mr. Atul Datt as its Arbitrator and called upon the respondent to appoint its Arbitrator within the next 30 days, failing which it said that it will take appropriate legal proceedings.

On January 03, 2008, the respondent replied to the notice but declined to appoint an Arbitrator on the ground that the claim stood settled between the parties and with that, the contract of insurance also came to an end including the arbitration clause.

Let me at this stage reproduce the arbitration clause, on basis of which the petitioner is seeking appointment of an Arbitrator on behalf of the respondent. The same runs as under:-“13. If any dispute or difference shall arise as to the quantum to be paid under this policy (liability being otherwise admitted) such difference shall independently of all other questions be referred to the decision of a sole arbitrator to be appointed in writing by the parties to or if they cannot agree upon a single arbitrator within 30 days of any party invoking arbitration, the same shall be referred to a panel of three arbitrators, comprising of two arbitrators, one to be appointed by each of the parties to the dispute/difference and the third arbitrator to be appointed by such two arbitrators and arbitration shall be conducted under and in accordance with the provisions of the Arbitration and Conciliation Act, 1996.

It is clearly agreed and understood that no difference or dispute shall be referable to arbitration as herein before provided, if the Company has disputed or not accepted liability under or in respect of this policy.

It is hereby expressly stipulated and declared that it shall be a condition precedent to any right of action or suit upon this policy that the award by such arbitrator/arbitrators of the amount of the loss or