ORIENTAL INSURANCE COMPANY LTD Vs. CHANDIGARH AROMATICS

JUDGEMENT

(1.) THERE is an arbitration clause No. 18 of the insurance policy which provided that in case difference arose between the parties they will first agree to have a sole Arbitrator appointed in writing and in case they fail to do so then by giving two months time each party can have one Arbitrator.

(2.) THE differences arose. The defendants issued a notice of 15 days under the Arbitration Act of 1940 (for short the 'act') suggesting to the petitioner to agree to the appointment of sole Arbitrator of the person named in the notice failing which it was indicated therein that the respondents shall be free to adopt any recourse available under tie Act. The petitioner did not agree to the appointment of the named person as sole Arbitrator.

(3.) THE two notices relied upon by the respondents had created confusion and it has to be decided by the trial Court whether the petitioner was to comply with the same, whether it has railed to comply with the terms of the agreement and whether the Arbitrator suggested by the respondents can proceed as a sole Arbitrator. Till this matter is decided by the trial Court I am of the view that it will not be in the interest of justice to permit the sole Arbitrator to proceed with the arbitration.