Arbitration can only be invoked when the liability is admitted by the parties, as per the terms of the arbitration clause.

ORDER

1. Heard learned counsel for the respective parties.

2. An application under Section 11 of the Arbitration and Conciliation Act, 1996 has been filed seeking appointment of an Arbitrator for adjudication of certain disputes which have arisen between the parties.

3. Attention of this Court is drawn to clause 13 of the agreement entered into between the parties at page No. 170 of the application, which reads as follows:-

"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 provision of the Arbitration and Conciliation Act, 1996.

It is clearly agreed and understood that no difference or dispute shall be reterable to arbitration as hereinbefore 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 condition precedent to any right of action or suit this policy that the award by such arbitrator/arbitrators of the amount of the loss or damage shall be first obtained."

4. Referring to the aforesaid provision of arbitration clause, the learned counsel representing the respondent Insurance Company placed reliance on two judgments rendered by Hon'ble Supreme Court in similar circumstances i.e. in the case of Oriental Insurance Company Limited Vs. M/s. Narbheram Power and Steel Pvt. Ltd. (AIR 2018 SC 2295) and in the case of United India Insurance Co. Ltd. & Anr. Vs. Hyundai Engineering and Construction Co. Ltd. & Ors. (AIR 2018 SC 3932).

5. It goes without saying that admittedly, the petitioner had entered into the Insurance Agreement with the respondent Insurance Company and the coverage note is found at page No.42 of the application. The specific items covered under the 'Asset Description' for the purpose of cover are quoted below:-

6. Learned counsel for the respondent Insurance Company submits that under Column 5 i.e. Stocks and stocks in process, the insured sum is indicated as 0(zero). Although a fire did take place in the factory premises of the petitioner on 05.12.2015, it appears that the Insurance Company appointed a Surveyor to go and assess the damage and stock claim. The Surveyor had gone to the site and under Annexure-6, he submitted a final survey report. From the survey report, it is clear that stocks in process were not covered under the Insurance Agreement. However, he has referred to the proposal submitted by the petitioner which covered the stocks in process and submitted a report to the Insurance Company indicating that if the Insurance Company accepts amendment to the cover to include the stocks in process then the claim towards stocks in process could be entertained by the Insurance Company.

7. Learned counsel for the respondent Insurance Company submits that the report of the Surveyor insofar as stocks in process was considered and repudiated by the Insurance Company inter-alia on the ground that the cover note issued in favour of the petitioner Company did not indicate any cover