*1* 15-103-10 srj IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION ARBITRATION APPLICATION NO.103 OF 2010 Kumar Synthetics Ltd. ..Applicant. v/s. M/s. Cholamandalam MS General Insurance Company Ltd. ..Respondent. Mr. Durgesh Singh a/w. Ms. Preeti Menon i/b. India Law Firm, for Applicant. Mr. S.R.Singh i/b. S.R.Singh & Co., for Respondent. CORAM : S.J. VAZIFDAR, J. DATE : 24 th JANUARY, 2011. P.C. :- 1 This is an application under section 11 of the Arbitration & Conciliation Act, 1996. 2 There is no dispute that a contract of insurance was entered into between the parties. Clauses 11 and 13 of the Insurance Policy read as under:- “11. If at the time of any loss or damage happening to any property hereby insured there be any other subsisting insurance or insurances, whether effected by the insured or any other person or persons covering the same property, this Company shall not be liable to pay or contribute more than its ratebale proportion of such loss or damage.” *2* 15-103-10 “13. If any dispute or difference shall arise as to the quantum to be paid under this 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 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 in arbitration as hereibefore 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 in any right of action or suit upon this policy that the award by such arbitrator/arbitrators of the amount on the loss or damage shall be first obtained.” 3 The Respondents paid only a part of the claim and denied its liability to pay the balance in view of the clause 11. The Respondents contended that the insured goods had been placed by the Applicant with M/s. New Empire Textile Processors Pvt. Ltd. as bailees and that the said bailee had obtained an insurance for the same goods from another Insurance Company. Accordingly, it was submitted that the Respondent was not liable to pay the entire claim but was liable to pay only its proportionate amount. 4 For the purpose of this application, it not necessary to decide whether the Respondent’s construction clause 11 is correct or not. It is a moot point whether the Insurance policy referred to in clause 11 is one which is taken out for or on behalf of the Applicant or whether it was taken *3* 15-103-10 out only for the benefit of the party obtaining such insurance. What is important to note, however, is that the Respondent by having raised this contention denied not merely the quantum it was liable to pay but its liability to pay as well. In that event, the claim would be barred in view of clause 13 which contemplates a reference to arbitration only disputes and differences as to the quantum where the liability is otherwise admitted. 5 In view of this, it not necessary to consider the Respondent’s defence that there is no substantive/ live claim in view of the voucher issued by the Applicant accepting the payment in full and final satisfaction of its claim. 6 The Application is, therefore, dismissed.