The arbitration clause in the insurance policy applied even in cases of complete denial of liability by the insurance company.

1. The arbitration clause between the parties provides that "If any difference arises as to the amount of any loss or damage, such difference shall independently of all other questions be referred to the decision of an arbitrator, to be appointed in writing by the parties in difference, ***** ***** And it is hereby expressly stipulated and declared that it shall be condition precedent to any right of action or suit upon the policy that the award by such arbitrator, arbitrators or the umpire, of the amount of the loss or damage if disputed, shall be first obtained". On this arbitration clause it is obvious that before recourse can be had to an ordinary civil Court in a claim arising under a policy of insurance, as in this case, award of the arbitrator in regard to the amount of loss or damage is a condition precedent.

2. Of the respondents, respondent No, 1 having suffered loss under a policy of insurance with the applicant on account of fire and destruction of insureds timber, it appointed an arbitrator, respondent No. 2, under the arbitration clause, to arbitrate on the loss or damage suffered by it. The applicant then applied under section 33 of the Arbitration Act, 1940, for an order that the matter was not for arbitration because the applicant was completely denying the liability under the policy of insurance in regard to the claim by respondent No. 1. This application was dismissed by the learned trial Judge on July 28, 1966, basing himself on The Great American Insurance Co. Ltd. v. Bodh Rap, AIR 1953 Punj 50, in which, though the insurance company had not specifically rejected the claim, the learned Judges having considered Jureidini v. National British and Irish Millers Insurance Co. Ltd., 1915 AC. 499 and Eagle Star and British Dominions Insurance Co. Ltd. v. Dina Nath, AIR 1923 Bom 249 observed:

"In the concluding sentence of the arbitration clause it is stated that it shall be a condition precedent to any right of action or suit upon the policy that the award by such arbitrator, arbitrators or umpire of the amount of the loss or damage if disputed shall be first obtained. In plain English the concluding sentence of the arbitration clause provides that no suit upon the policy shall be instituted unless the arbitrator has ascertained the amount of the loss or damage, if disputed. In case it is found that the arbitration clause only applies to a difference as to amount of loss or damage, and, therefore, not to a claim which the company rejected altogether, whatever the loss might he, the condition stated in the concluding sentence of the arbitration clause will not be satisfied when the company decides to deny its liability under the Policy. Clearly, this was not the result contemplated by the arbitration clause."

The observation of the learned Judges supports the decision of the learned trial Judge.

3 What was urged before the learned trial Judge was that the applicant insurance company having completely rejected the claim of respondent No. 1 and denied liability outright, the arbitration clause was not attracted, because it was only attracted with regard to the quantum of damage or loss and not in a case of complete denial of liability. It is this argument which is reiterated in this revision application on the side of the applicant insurance company. Now, obviously the observation of the learned Judges in Bodh Rajs case goes against the argument. But the learned counsel for the applicant refers to Jureidinis and Dina Naths cases and contends that where there is a total rejection of the claim and denial of liability, the arbitration clause, as in this case, and in those cases the clause was exactly the same, is not attracted. However, the learned Judges explained away those cases as not relevant in Bodh Rajs case and the same consideration applies in the present case. I consider, however, that the correct statement of law in this respect has been given by Falshaw, J. (as he then was) in Great American