LILA EMPORIUM Vs. SENIOR DIVISIONAL MANAGER

JUDGEMENT

(1.) The applicant has filed this Arbitration Application seeking appointment of an Arbitrator under Sec. 11(6) of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as "the Arbitration Act").

(2.) It is pleaded in the Arbitration Application that the applicant has obtained a Standard Fire and Special Peril Policy (Material Damage) by paying premium effective from 15/11/2019 to 14/11/2020. The insurance policy covers damages caused by flood and inundation. Due to heavy rain in Jaipur, a situation of flood was created and the entire insured stock of the policy holder got damaged. The claimant raised a claim of Rs.43,65,328.00 out of which a sum of Rs.14,47,645.00 was paid by the respondent - Insurance Company. It is also pleaded that the respondent has arbitrarily made deduction reducing the claim of the applicant, which gave rise to a dispute between the parties. The applicant gave a notice to the respondent for referring the matter to the Arbitrator and appointed Shri N.P. Upadhyay (Retired District and Sessions Judge) as a Sole Arbitrator. The respondent challenged the order of appointment of the Arbitrator and the application filed by the respondent under Sec. 14 of the Arbitration Act was allowed and the appointment of Shri N.P. Upadhyay as the Sole Arbitrator was terminated.

(3.) It is pleaded by the counsel for the applicant that there is an arbitration clause. The notice for appointing the Arbitrator was issued by the applicant, however, the Sole Arbitrator appointed by the applicant was challenged by the non-applicant-respondent before the Commercial Court and the Commercial Court has terminated the mandate of the Sole Arbitrator appointed by the applicant. It is prayed by the counsel for the applicant that since there is an arbitration clause and the mandate of the Arbitrator appointed by the applicant, has been terminated, the Court should appoint an Arbitrator under Sec. 11(6) of the Arbitration Act. Counsel for the applicant has placed reliance on Vidya Drolia and Ors. Versus Durga Trading Corporation and Ors.: (2021) 2 SCC 1 and The Oriental Insurance Co. Ltd. and Ors. Versus Dicitex Furnishing Ltd.: (2020) 4 SCC 621.