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Informist, Thursday, Jul 18, 2024

 

NEW DELHI – The Supreme Court today rejected a plea by SBI General Insurance Co Ltd against the Gujarat High Court's order appointing an arbitrator to adjudicate a dispute with Krish Spinning. Rejecting the plea, the apex court said the existence of an arbitration clause in the insurance policy bought by Krish Spinning was not disputed by SBI General Insurance. 

 

The dispute raised by Krish Spinning being one of quantum and not of liability, prima facie, fell within the scope of the arbitration agreement, the court said.

 

The dispute is over a standard fire and special perils insurance policy bought by Krish Spinning from SBI General Insurance for a total sum insured of 72 mln rupees in 2018. During the period when insurance coverage was active, there were two incidents of fire at Krish Spinning's factory.

 

Krish Spinning claimed that it suffered a loss of 80.85 mln rupees in the two fire incidents – 17.62 mln rupees in the first fire incident and 63.23 mln rupees in the second. A surveyor appointed by SBI General Insurance, however, assessed the quantum of loss at 8.42 mln rupees.

 

Although Krish Spinning signed an advance discharge voucher confirming the receipt of 8.42 mln rupees from SBI General Insurance as the full and final settlement for the claim, the company later claimed that it had to sign the voucher as it was badly in need of money. 

 

In 2020, Krish Spinning issued a legal notice to SBI General Insurance calling them to release the balance payment of the claim amount from the first fire incident. Krish Spinning said that if they had not signed the advance discharge voucher, then their second claim of fire incident might have been detrimentally affected. It alleged coercion and undue influence by SBI General Insurance in signing the voucher. 

 

Krish Spinning moved the high court to seek the appointment of an arbitrator for the dispute. Contesting this, SBI General Insurance said that the claim raised by Krish Spinning was stale and having once signed the consent letter, it was not open for it to turn around and raise a dispute. The high court in its order last year approved Krish Spinning's request to appoint an arbitrator in the case.  End

 

 

Reported by Surya Tripathi

Edited by Saji George Titus

 

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