ORIENTAL INSURANCE CO LTD Vs. MERCURY RUBBER MILLS

JUDGEMENT

(1.) THIS is an appeal from the judgment dated 09. 04. 1987 passed by the learned Single Judge of this Hon ble Court in Suit No. 2279-A/85 wherein the petition filed by the Respondent herein was allowed and the dispute existing between the parties was referred to arbitration to ascertain what amount was due to the Respondent from the Appellant, under the contract of insurance.

(2.) M/s. Mercury Rubber Mills, the Respondent had entered into contract of insurance with the Oriental Insurance Co. Ltd. vide policy No. 2130/302/02211/44/05/80/00034 dated 29. 12. 1980. The appellant had agreed to pay to the Respondent all losses of profit which the Respondent might suffer due to the breakdown of its machinery installed at its factory premises situated at 35th K. M. milestone, G. T. Karnal Road, Rasoi, District Sonepat, Haryana.

(3.) THE insurance policy had an arbitration Clause which reads as under:-If any 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 an arbitrator, to be appointed in writing by the parties in difference, or if they cannot agree upon a single arbitrator to the decision of two disinterested persons as arbitrators of whom one shall be appointed in writing by each of the parties within two calendar months after having been required so to do in writing by the other party in accordance with the provisions of the Arbitration act, 1940, as amended from time to time and for the time being in force. In case either party shall refuse or fail to appoint arbitrator within two calendar months after receipt of notice in writing requiring an appointment, the other party shall be at liberty to appoint sole arbitrator, and in case of disagreement between the arbitrators, the difference shall be referred to the decision of an umpire who shall have been appointed by them in writing before entering on the reference and who shall sit with the arbitrators and preside at their meetings. It is clearly agreed and understood that no difference or dispute shall be referable to arbitration as herein before 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 to action or suit upon this policy that the award by such arbitrator, arbitrators or umpire of the amount of the loss or damage shall be first obtained. It is also hereby further expressly agreed and declared that if the Company shall disclaim liability to the insured for any claim here under and such claim shall not, within 12 calendar months from the date of such disclaimer have been made the subject matter of a suit in a court of law, then the claim shall for all purposes be deemed to have been abandoned and shall not thereafter be recoverable hereunder.