Manmohan Singh, J.

1. The present petition has been filed by the petitioner under Section 34 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as “the Act”) seeking setting aside of the Arbitral Award dated 1st August, 2012 passed by the Arbitral Tribunal of quorum comprising three arbitrators.

2. Brief facts of the present case are that the petitioner is a Company duly incorporated under the Companies Act, 1956 and having its registered office at IFFCO Tokio General Insurance Co. Ltd., IFFCO Sadan, C-1, District Centre, Saket, New Delhi-110017. The respondent is Indorama Synthetics India Ltd., a company having its registered office at Nagpur, Maharashtra and Corporate office at Gurgaon, Haryana. The respondent manufactures Polyester Staple Fibre, Partially Oriented Yarn, Fully Drayn Yarn, Draw Texturized Yarn and Polyester Chips. The petitioner’s Nagpur branch issued to respondent a Fire Loss of Profit Policy (Policy No.11171258 dated 28th February, 2007 – hereinafter referred to as the (“LOP Policy”) and a Standard Fire and Special Perils Policy (Policy No.11179590 dated 31st March, 2007 – hereinafter referred to as Material Damages policy or the MD Policy). Both policies were worded in accordance with the policy wording statutorily mandated by the Tariff Advisory Committee (hereinafter referred to as the “TAC”) set up under Section 64U of the Insurance Act, 1938 to stipulate policy wordings for all general insurance companies.

3. The MD Policy covers the respondent/insured for the risk of physical damage/loss to its property insured caused by the specific perils listed in the said policy. The loss of profit policy covers the peril of the loss of profits on account of the business interruption arising out of the consequence of the fire. The said LOP policy provides the mode of the computation of loss of profit by providing the methods of arriving at the loss of profit. The said policy also contained the definition indemnity period for which the said loss is required to be covered.

4. On 29th October, 2007, during the currency of the insurance policies, a fire broke out in Control Panel Room (in plant CP2 and CP3) of the respondent’s polyester plant-I and four sets of control panels were burnt/gutted/destroyed. Due to this fire, plants CP2 and CP3 that were manufacturing Polyester Staple Fibre (PSF), Partially Oriented Yarn (POY), Fully Drayn Yarn (FDY), Draw Texturized Yarn (DTY) and Polyester Chips came to a standstill. The said manufacturing activity remained stalled from the two plants 238 days, however the maximum indemnity period is 6 months, so the interruption of business is involved as per policy document for 182 days whereafter the respondent purchased 3 sets of control panels for making operational remaining 3 PSF draw lines. As per petitioner, on the date of the fire, the respondent had a stock in hand of 52,000 metric tonnes of the above said items which was sufficient to meet any sale requirement for a substantially long period.

5. After the incident of fire, the respondent informed the petitioner of the fire and the damage caused. Upon information, the petitioner appointed Mr.Adarsh Gupta of Messrs Adarsh Associates, New Delhi, as the Surveyor, to assess the loss under the MD and LOP policies, who visited the site for inspection on 31st October, 2007. By way of a letter dated 7th December, 2007, the respondent filed a provisional loss of profits claim (under the Fire Loss of Profit Policy) for Rs.25 crores on the basis of reduction in output from Plants CP2 and CP3 for two months, i.e. upto 31st December, 2007 which is the alternative basis provided under the loss of profit policy as against the turnover basis of computing the loss of profits.

6. On 8th January, 2008, while the survey and assessment of the loss was continuing, the Surveyor Adarsh Gupta submitted his interim report