M/S MAKRO v. M/S THE NEW INDIA ASSURANCE CO. LTD. & ANR.

1. This is a petition filed under Section 11(6) of the Arbitration & Conciliation Act, 1996 (‘Act’) for appointment of an Arbitrator. The arbitration clause between the parties reads as under: "10. Arbitration and Disclaimer: If any dispute or difference shall arise as to the quantum to be paid under the 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 2019:DHC:4879 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 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 a condition precedent to any right of action or suit upon this Policy that award by such arbitrators or umpire of the amount of the loss or damage shall be first obtained." It is also hereby expressly agreed and declared that if the Company shall disclaim liability to the Insured for any claim herein 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. "

2. Learned counsel appearing for the respondent has filed the reply and has objected to the present petition on the ground that the petitioner had received the claim amount from the respondents towards full and final settlement of its claim and cannot invoke the arbitration clause as no dispute survives between the parties. It is further averred in the reply that the petitioner has failed to plead and establish any fraud/coercion/ undue influence by the respondent at the time of full and final settlement by the petitioner.

3. Learned counsel for the respondent submits that in view of the full and final settlement, the Arbitration Clause cannot be invoked in terms of the judgment of the Apex Court in United India Insurance Co. Limited vs. Antique Art Exports Private Limited, (2019) 5 SCALE 419. The relevant para of the judgment relied upon by the respondent is as under:-

4. I have examined the pleadings of the parties and heard the learned counsels.

5. The only objection raised by the respondent to the appointment of the Arbitrator is that the petitioner without any fraud/undue influence/coercion had settled the matter with the respondent and this was a full and final settlement. There is no denial or dispute to the existence of the Arbitration Agreement between the parties. In a recent judgment by the Apex Court in the case of M/s. Mayavati Trading Pvt. Ltd. vs. Pradyuat Deb Burman, (Civil Appeal No.7023/2019 decided on 05.09.2019) has overruled the judgment in the case of United India Insurance (supra) and has held that the defence of full and final settlement of a claim will not be considered by the Court while examining the petition under Section 11(6) of the Act. The Apex Court has held that all that needs to be seen at the time of deciding Section 11(6) of the Act is the existence of the Arbitration Agreement and no more and nothing else. The relevant paras of the judgment are extracted hereunder: -

6. In view of the said judgment of the Apex Court, the objection raised by the petitioner to the present petition cannot be sustained.

7. At this stage, learned counsel for the respondents submits that he has no objection to the appointment of a Sole Arbitrator, but his right to file an application under Section 16 of the Act be kept open.

8. With the consent of the parties, Mr. Amrit Pal Gambhir, Advocate, is appointed as sole Arbitrator to adjudicate the disputes between the parties.

9. The rights and contentions of the parties on the merits of the disputes as well as right of respondents to file an application under Section 16 of the Act is kept open.

10. The Arbitrator shall give a disclosure before entering upon reference. Fee of the Arbitrator shall be fixed as per the Fourth Schedule of the Act as mutually decided by the parties.

11. The address and mobile number of the learned Arbitrator is as under: Mr. Amrit Pal Gambhir, Advocate C-101, Ground Floor, Part-I, New Delhi-110048. Mobile No. 9810082347

12. Copy of this order be sent to the learned Arbitrator.

13. The petition is disposed of in the above terms.