The court affirmed that an arbitral tribunal's findings, based on sufficient factual analysis of claims, are to be respected unless manifestly erroneous.

JUDGMENT

Sanjeev Narula, J. The present petition under Section 34 of the Arbitration and Conciliation Act, 1996 [hereinafter referred to as "the Act"] arises out of an arbitral award dated 14th August, 2020 directing the Petitioner [hereinafter referred to as "NIC"] to pay: (i) a sum of Rs.3,11,94,796/- (which includes principal amount of Rs.1,93,47,430/-, plus simple interest awarded at Rs.1,31,02,645/-, less Rs.12,55,279/- paid under interim award dated 10th March, 2017) along with post-award interest @12% p.a. from 15th August, 2020 till the date of payment, (ii) pre-award interest @ 11% p.a. for the period from 1st April, 2014 to 14th August, 2020, amounting to Rs.1,31,02,645/-, and (iii) cost of Rs.24,77,325/-.

2. NIC impugns the grant of: (i) Claim No. 1 against loss to the building; (ii) Claim No. 2 towards loss caused to the plant & machinery; (iii) Claim No. 4 towards loss caused to stocks; (iv) Claim No. 7 awarding interest; and (v) Claim No. 9 awarding cost.

3. BRIEF FACTS:

3.1. NIC is a Public Sector Undertaking (PSU) engaged in the business of providing various general non-life insurance policies.

3.2. Respondent No. 1-M/S. Digital World [hereinafter referred to as "Digital"], the Claimant in the Arbitration - is a sole proprietorship of one Mr. Ashok Gupta, engaged in the business of printing digital images on textile/cloth by heat transfer method through computerized machines.

3.3. Respondent No. 2-Small Industries Development Bank of India (SIDBI) - is a Public Sector Undertaking engaged in the business of promoting, developing and financing in the Micro, Small and Medium Enterprises (MSME) sector¹ . It is, as such, only a proforma party to the instant proceedings and is not represented through any counsel.

3.4. Digital obtained a Standard Fire and Special Perils Policy from NIC for the period 30th September, 2011 to 29th September, 2012 insuring building, plant & machinery, furniture & fixtures, stock of fabrics, and stock in process, situated at D- 21, Sector-6, Gautam Budh Nagar, Noida.

3.5. On 26th September, 2012 at about 14:00 hours, employees of Digital heard a blast at the ground floor of the afore-noted premises which resulted in fire and smoke.

3.6. Upon receipt of intimation of the incident, NIC appointed a Statutory Surveyor-M/s Rakesh Kapoor & Company [hereinafter referred to as the "Surveyor"] to conduct survey and assess the loss, as mandatorily required under Section 64UM of the Insurance Act, 1938 [hereinafter referred to as the "Insurance Act"].

3.7. After physical verification of the documents provided by Digital, the Surveyor submitted its detailed report and assessed net loss towards damage to the building, plant & machinery, furniture & fixture and stocks as Rs.12,55,279/-.

3.8. Aggrieved with this assessment, Digital filed a complaint before National Consumer Dispute Redressal Commission, New Delhi. During the course of adjudication of the said complaint, parties agreed to refer their disputes to arbitration, and a sole Arbitrator was appointed.

3.9. Before the Arbitral Tribunal, Digital made the following claims: