Courts must not conduct intricate evidentiary enquiry on whether insurance claims raised by a party are time-barred or not, says SC
Supreme Court on Thursday held that the courts deciding an application for appointment of an arbitrator must not conduct an intricate evidentiary enquiry on whether the insurance claims raised by a party are time-barred or not. This, it said, should be left for determination by the arbitrator itself.
Dismissing SBI General Insurance Co's appeal against the Gujarat High Court’s order that appointed an arbitrator to decide the dispute over insurance claims raised by Krish Spinning, a bench led by Chief Justice DY Chandrachud said “the effect of the aforesaid clarification is only to streamline the position of law, so as to bring it in conformity with the evolving principles of modern-day arbitration, and further to avoid the possibility of any conflict between the two decisions that may arise in future.
It said the dispute raised by Krish being one of quantum and not of liability, prima facie, felt within the scope of the arbitration agreement and the dispute regarding 'accord and satisfaction' as raised by the insurance company can be decided by the arbitral tribunal as a preliminary issue.
However, the apex court ruled that a court while deciding the issue of limitation should limit its enquiry to examining whether the arbitration application has been filed within the period of limitation of three years or not.
In 2018, Krish Spinning, which had obtained a standard fire and special perils insurance policy from SBI for Rs 7.2 crore. During the period of insurance cover, two incidents of fire took place at its
