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Delhi High Court - Orders

Kalpataru Power Transmission Limited vs Oriental Insurance Company Limited on 11 May, 2023

Author: Yashwant Varma

Bench: Yashwant Varma

                    $~2
                    *     IN THE HIGH COURT OF DELHI AT NEW DELHI
                    +     ARB.P. 1323/2022
                          KALPATARU POWER TRANSMISSION LIMITED
                                                                          ..... Petitioner
                                           Through: Mr. Ashish Mohan, Mr. Sunil
                                                      Mittal, Ms. Anu Tiwari, Mr.
                                                      Vikrant Baleria, Mr. Pranav
                                                      Saigal, Advs.
                                           versus
                          ORIENTAL INSURANCE COMPANY LIMITED
                                                                       ..... Respondent
                                           Through: Mr. Apoorv Sarvaria, Adv.
                          CORAM:
                          HON'BLE MR. JUSTICE YASHWANT VARMA
                                           ORDER

% 11.05.2023

1. Learned counsel who has entered appearance on behalf of the respondent prays for and is granted three weeks time to file a reply.

2. The Court also takes note of Clause 6 of the policy and which constitutes the arbitration clause. The same is reproduced hereinbelow:-

"6.The Insured shall at the expense of the Company do and concur in doing and permit to be done all such acts and things as may be necessary or required by the Company in the interest of any rights or remedies, or of obtaining relief or indemnity from parties (other than those insured under this Policy) to which the company shall be or would become entitled or subrogated upon their paying for or making good any loss or damage under this Policy, whether such acts and things shall be or become necessary or required before or after the insured's indemnification by the company.

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 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 Signature Not Verified dispute shall be referable to arbitration as hereinbefore Digitally Signed By:NEHA Signing Date:17.05.2023 11:25:56 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.

If a claim is in any respect fraudulent, or if any false declaration is made or used in support thereof, or if any fraudulent means or devices are used by the Insured or anyone acting on his behalf to obtain any benefit under this Policy, or if a claim is made and rejected and no action or suit is commenced within three months after such rejection or, in case of arbitration taking place as provided therein; within three months after the Arbitrator or Arbitrators or Umpire have made their award, all benefit under this Policy shall be forfeited.

If at the time any claim arises under this Policy there be any other insurance covering the same loss, damage or liability the company shall not be liable to pay or contribute more than their rateable proportion of any claim for such loss, damage or liability.

This insurance may be terminated at the request of the Insured at any time in which case the Insurers will refund appropriate premium amount subject to the following conditions.

i) Claims experience under the policy as on date of cancellation should be less than 60 % of reworked premium.

ii) The unexpired period is not less than 3 months or 25% of the policy period, whichever is less.

iii) Testing period should not have commenced.

This insurance may also at any time be terminated at the option of the Insurer by 15 days notice to that effect being given to the Insured in which case the Insurers shall be liable to repay on demand a rateable proportion of the premium for the unexpired term from the date of cancellation."

3. It is pointed out that on a plain reading of that provision, it would appear that parties may not be in a position to seek resolution of disputes by way of arbitration where liability is denied by the respondent.

4. The Court also takes note of the latter part of the same Clause which again reiterates that the dispute shall not be referable to arbitration, if the insurance company has either disputed or not accepted liability under the policy. Matter requires consideration.

5. List again on 07.08.2023.

YASHWANT VARMA, J.

MAY 11, 2023 neha Signature Not Verified Digitally Signed By:NEHA Signing Date:17.05.2023 11:25:56