NDLI: The Oriental Insurance Co. Ltd. & Anr. Vs. Dicitex Furnishing Ltd.

Content Provider	Supreme Court of India
e-ISSN	30484839
Language	English
Access Restriction	NDLI
Subject Keyword	s.11(6) appointment of arbitrator Arbitration and Conciliation Act 1996 Court’s jurisdiction to examine the arbitrability of the dispute
Content Type	Text
Resource Type	Law Judgement
Jurisdiction	India
Act(s) Referred	Arbitration and Conciliation Act, 1996 (26 of 1996)
Case(s) Referred	Referred Case 0 Referred Case 1 Referred Case 2 Referred Case 3
Case Type	Appeal
Court	Supreme Court of India
Disposal Nature	Appeal Dismissed
Headnote	Arbitration and Conciliation Act, 1996 – s.11(6) – Application under, for appointment of arbitrator – Court’s jurisdiction to examine the arbitrability of the dispute in the context of no objection certificates/discharge vouchers given by the insured to the insurer in discharge of the claim – Economic duress or coercion, if exists – In 2011, the respondent-insured obtained Standard Fire and Special Peril Policy from the appellant to cover the stocks of goods lying in its three separate godowns– Total sum insured was @ ` 13 crores– On 25.05.12, fire broke out destroying the stock in the godowns – Appellant appointed surveyor – Respondent lodged claim for ` 14.88 crores – Surveyor recommended payment of ` 12.93 crores to the respondent– However, the appellant appointed new surveyor – Appellant released ` 3.50 crores on 04.03.13 – Respondent signed the discharge voucher – As per new surveyor’s report, the assessment worked to ` 7.16 crores which was offered to the respondent in May 2014, in full and final settlement of the claim – Accepted reluctantly by the respondent – By letter dtd. 06.06.14, the respondent withdrew the letter dtd. 31.05.14 submitted along with the discharge voucher the claim – Respondent informed the appellant that the huge difference between the total amount claimed and the final claim settlement amount needs to be resolved, failing which the respondent would invoke the arbitration, as per the terms and conditions of the Policy – Respondent filed application u/s.11(6) for appointment of arbitrator – Allowed by Single Judge – On appeal, held: An aggrieved party can be the victim of economic coercion which results in its signing a document which discharges the other party of its obligations – Several letters spanning over two years stating that the respondent was facing financial crisis on account of the delay in settling the claim,were addressed to the appellant – Overall reading of respondent’s application u/s. 11(6) clearly shows that its grievance 389 final settlement of full and with respect to the involuntary nature of the discharge voucher was articulated– At this stage, the Court is required to ensure that an arbitrable dispute exists, has to be prima facie convinced about the genuineness/credibility of the plea of coercion – It cannot be too particular about the nature of the plea, which necessarily has to be made and established in the substantive (arbitration) proceeding – Reasoning in the impugned judgment cannot be faulted.
Judge	Hon'ble Mr. Justice S. Ravindra Bhat
Neutral Citation	2019 INSC 1234
Petitioner	The Oriental Insurance Co. Ltd. & Anr.
Respondent	Dicitex Furnishing Ltd.
SCR	[2019] 14 S.C.R. 389
Judgement Date	2019-11-13
Case Number	8550

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The Oriental Insurance Co. Ltd. & Anr. Vs. Dicitex Furnishing Ltd.

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The Oriental Insurance Co. Ltd. & Anr. Vs. Dicitex Furnishing Ltd.

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