Point of law: Arbitral Award -Courts should not interfere with an award merely because an alternative view on facts and interpretation of contract exists. The Courts need to be cautious and should defer to the view taken by the Arbitral Tribunal even if the reasoning provided in the award is implied unless such award portrays perversity unpardonable under Section 34 of the Arbitration Act.

JUDGMENT

VIBHU BAKHRU, J

1. Oriental Insurance Co. Ltd. (hereinafter ‘OICL’) has filed the present petition under Section 34 of the Arbitration and Conciliation Act, 1966 (hereinafter the ‘A&C Act’), inter alia, impugning an Arbitral Award dated 28.08.2020 (hereafter the ‘impugned award’) passed by the Arbitral Tribunal constituted of Justice (Retd.) Kurian Joseph, a former judge of the Supreme Court of India as the sole arbitrator. The impugned award was rendered in the context of disputes relating to the insurance claims made by the respondent (hereinafter ‘AFPL’) under the insurance policy issued by OICL.

2. AFPL is a company engaged in the business of manufacture of footwear. AFPL had a valid “Standard Fire and Special Perils Policy (bearing policy number 510000/11/2018/483 with period of insurance commencing from 00:00 on 25.10.2017 to the midnight of 24.10.2018 – hereafter the ‘Policy’). In terms of the Policy, AIPL was insured against the specified risks for a sum of Rs.9,70,00,000.

3. On 09.12.2017, a fire broke out in AFPL’s manufacturing plant (bearing Plot No. 213, HSIIDC, Footwear Park, Sector-17, Bahadurgarh, Jhajjar, Haryana) which resulted in AFPL suffering substantial loss. On 11.12.2017, OICL appointed a surveyor (M/s Timeline Insurance Surveyors and Loss Assessors Private Limited – hereafter the ‘Surveyor’) to survey and assess the loss caused to the stock, building, plant and machinery due to the aforesaid incident.

4. On 10.01.2018, AFPL lodged a claim amounting to Rs.10,98,28,543.70/-. The Final Survey Report was filed on 12.06.2018 and the same quantified the loss suffered by AFPL at Rs.4,70,15,504.79/- excluding the Goods and Services Tax (GST) thereon. On 12.11.2018, OICL made an on-account payment of Rs.2,00,00,000/-. On 13.12.2018, OICL informed AFPL that its claim had been approved for a sum of Rs.4,70,15,505/-, subject to adjustment of the on-account payment made by it on 12.11.2018. It further directed AFPL to provide a discharge voucher in the given format duly filled, stamped and counter-signed by the bank. On 15.12.2018, AFPL submitted the discharge voucher (hereinafter ‘the Discharge Voucher’) as required by OICL.

5. On 20.12.2018, OICL released the balance sum of Rs.2,70,15,505/- to AFPL. On 26.12.2018, AFPL sent a protest letter stating that the Discharge Voucher was executed by it under protest and requested for a copy of the Final Survey Report. By way of a notice dated 29.01.2019, AFPL invoked the agreement to refer the disputes to arbitration as contained in the Policy. OICL responded to the said notice on 28.02.2019. It denied the averments made by AFPL but suggested the name of Mr. R.K. Kaul to be appointed as the arbitrator to adjudicate the disputes between the parties. AFPL did not agree with the proposed name and suggested that a retired High Court Judge be appointed as an Arbitrator.

6. Eventually, on 22.05.2019, OICL appointed Justice Kurian Jospeh, a former Judge of the Supreme Court of India as the Sole Arbitrator and he entered reference on 27.05.2019.

7. On 13.07.2019, AFPL filed its Statement of Claim before the Arbitral Tribunal, raising the following claims:-

8. In addition to the total claim of Rs.4,