High Court appointed an arbitrator where valid arbitration clause existed

1. The petitioner insured its factory with the respondent under Standard Fire and Special Perils Policy. On 25th October, 2012, a fire broke out in the insured premises whereupon the petitioner lodged a claim with the respondent. The respondent appointed a surveyor to assess the petitioner's loss on 27th October, 2012. and in February, 2013, the respondent appointed second surveyor. 

2. On 17th November, 2014, the surveyor assessed the petitioner's loss at Rs.6,04,36,887/- and sought the concurrence of the petitioner. The petitioner claims that the respondent forced it to give the concurrence. The petitioner invoked the arbitration clause of the policy with respect to the balance claim amount.

3. The petitioner filed a petition under Section 11(6) of the Arbitration and Conciliation Act, 1996, for appointment of an arbitrator.

4. The High Court held as under:

There is a valid arbitration agreement between the parties contained in clause 13 of the insurance policy. The disputes have arisen between the parties as the respondent has paid Rs. 5,62,32,959/- to the petitioner against their claim of Rs.12,69,51,063/-. The petitioner has validly invoked the arbitration vide letter dated 10th July, 2015.8.2. The respondent's objection to the appointment of the arbitrator is not sustainable in view of the catena of judgements discussed in para 5 above and IRDA's circular dated 24th September, 2014. That apart, there is no merit in the respondent's objection because the petitioner, in its letter dated 17th November, 2014, agreed to accept the part payment without prejudice to its rights and subject to the terms and conditions of the policy, meaning thereby that the petitioner reserved its right to claim the balance amount in terms of the policy. 8.3. The petition is allowed and Justice Mukul Mudgal (Retd.) is appointed as the sole arbitrator to adjudicate the disputes between the petitioner and respondent No.1 including their claims as well as counter claims.