AI Structured Summary
Not yet generated for this judgment
Judgment
Gokal Chand Mital, J.—There is an arbitration clause No. 18 of the insurance policy which provided that in case difference arose between the parties they will first agree to have a sole Arbitrator appointed in writing and in case they fail to do so then by giving two months time each party can have one Arbitrator.
The differences arose. The defendants issued a notice of 15 days under the Arbitration Act of 1940 (for short the ''Act'') suggesting to the petitioner to agree to the appointment of sole Arbitrator of the person named in the notice failing which it was indicated therein that the respondents shall be free to adopt any recourse available under tie Act. The petitioner did not agree to the appointment of the named person as sole Arbitrator.
Thereafter, the respondents again issued a notice dated 24-5-1989 to the petitioner indicating that the petitioner was to appoint an arbitrator within two months of the receipt of the earlier notice but since it failed to do so the named Arbitrator shall be the sole Arbitrator and requested the Arbitrator to enter upon the reference. The petitioner filed an application u/s 9 of the Act before the Civil Court for setting aside the appointment of Arbitrator and alongwith it moved an application for stay of proceedings before the Arbitrator. The application for stay of proceedings before the Arbitrator has been dismissed by the trial Court by an order dated 21-10-1989. This is revision against the said order.
After hearing learned counsel for the parties, I am of the view that the proceedings before the Arbitrator deserve to be stayed till it is finally decided that he can proceed to enter upon the reference as sole Arbitrator.
The two notices relied upon by the respondents had created confusion and it has to be decided by the trial Court whether the petitioner was to comply with the same, whether it has railed to comply with the terms of the agreement and whether the Arbitrator suggested by the respondents can proceed as a sole Arbitrator. Till this matter is decided by the trial Court I am of the view that it will not be in the interest of justice to permit the sole Arbitrator to proceed with the arbitration.
Accordingly, the revision is allowed. The order of the Court below is set aside and the Arbitrator appointed by the respondents is restrained from proceeding with the arbitration till application u/s 9 of the Act is decided by the trial Court.