- (1.) The Court : Mr. Gupta for the respondent has very strenuously tried to interpret the following arbitration clause in the agreement between the parties : "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 provisions of the Arbitration and Conciliation Act, 1996. It is clearly agreed and understood that no difference or dispute shall be referable 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 a condition precedent to any right of action or suit upon this policy that the award by such arbitrator/arbitrators of the amount of the loss or damage shall be first obtained."
(2.) The plaintiff's case is that their factory was insured against, inter alia, the peril of fire and special perils with the respondent insurance company. There was a cyclone in October, 2013 which caused heavy damage to the factory. The claim of the petitioner is based on this alleged loss.
(3.) The respondent insurer while rejecting the claim of the petitioner on 26th December, 2014 had advanced the following reasons: "1. Alleged loss of imported coal is clearly an inventory shortage. 2. There was no actual loss of stock in process. 3. The damage to the sponge iron is due to inherent vice. 4. The loss towards buildings/sheds etc. are exaggerated to cover Insured maintenance. 5. As there is no material damage thus business interruption loss does triggered.";