Case Note & Summary
The applicant, Tainwala Personal Care Products Pvt. Ltd., filed an application under Section 11(6) of the Arbitration and Conciliation Act, 1996 seeking appointment of an arbitrator. The dispute arose out of a proposal for a Standard Fire and Special Perils Policy submitted by the applicant to the respondent, Royal Sundaram Alliance Insurance Co. Ltd. The respondent issued a risk cover note on 14 February 2008, which stated that the policy document was under preparation and would be submitted in due course. However, by a letter dated 18 February 2008, the respondent informed the applicant that the consideration received was lower than the offer and that the respondent was not in a position to cover the risk. The applicant contended that the letter was antedated, as a surveyor appointed by the respondent had referred to instructions issued on 20 February 2008. The applicant invoked the arbitration clause contained in what was described as a standard policy document. The court noted that no policy document was ever executed between the parties. The risk cover note merely stated that the policy was under preparation. In the absence of a specific arbitration agreement binding the parties, the application under Section 11 was held not maintainable. The court also observed that even the alleged arbitration clause in the standard policy was limited to disputes as to quantum to be paid under the policy, liability being otherwise admitted. Since there was no concluded contract containing an arbitration clause, the application was dismissed.
Headnote
A) Arbitration Law - Appointment of Arbitrator - Section 11(6) Arbitration and Conciliation Act, 1996 - Maintainability - Applicant sought appointment of arbitrator under Section 11(6) relying on an arbitration clause in a standard fire policy - However, no policy was executed between the parties; only a risk cover note was issued which stated that the policy document was under preparation - The risk cover note did not contain any arbitration clause - Held that in the absence of a specific arbitration agreement binding the parties, the application under Section 11 is not maintainable (Paras 1-2).
Issue of Consideration
Whether an application under Section 11(6) of the Arbitration and Conciliation Act, 1996 is maintainable in the absence of a concluded arbitration agreement between the parties.
Final Decision
The application under Section 11(6) of the Arbitration and Conciliation Act, 1996 is dismissed as not maintainable in the absence of an arbitration agreement.
Law Points
- Arbitration agreement must be in writing
- Section 7 of Arbitration and Conciliation Act
- 1996
- Section 11(6) application not maintainable without arbitration agreement
- Insurance policy not executed
- Risk cover note not containing arbitration clause
