Calcutta HC Sets Aside Arbitral Award In Insurance Dispute Citing Insufficient Evidence
Date
7/25/2024 2:24:55 PM
(MENAFN- KNN India)
New Delhi, Jul 25 (KNN) In a significant ruling, the Calcutta High Court has set aside an arbitration award in a case involving Oriental Insurance Company Limited and M/S. Sarada Rani Enterprises.
The court found that the arbitral tribunal's decision lacked proper evidentiary basis and was arbitrarily determined.
The court criticised the arbitral tribunal for disregarding two crucial reports: one from the insurer's surveyor and another from an independent court-appointed surveyor.
Instead, the tribunal's reliance on a single letter from the respondent was deemed insufficient proof for the claim.
In its analysis, the High Court noted significant discrepancies in the claimed amounts at different stages of the proceedings. This inconsistency further undermined the credibility of the respondent's claims.
The court emphasised that arbitral decisions must be based on substantial evidence, not mere unilateral claims. This principle is crucial for maintaining the integrity of the arbitration process and ensuring fair outcomes for all parties involved.
Citing recent Supreme Court judgments, the High Court clarified that the case involved fundamental flaws in decision-making rather than mere technical defects. This distinction is important as it highlights the severity of the issues found in the arbitral award.
The ruling underscores the importance of robust evidence in arbitration proceedings and sets a precedent for scrutinizing arbitral awards. It also highlights the courts' role in ensuring fairness and adherence to legal principles in alternative dispute resolution mechanisms.
This decision is likely to have far-reaching implications for insurance claims and arbitration practices in India, potentially leading to more stringent standards for evidence presentation and evaluation in future cases.
The dispute arose when Sarada Rani Enterprises sought compensation for damaged cement bags in their godowns, claiming substantial business losses.
The arbitral tribunal initially ruled in favor of Sarada Rani Enterprises, prompting Oriental Insurance to challenge the award under Section 34 of the Arbitration and Conciliation Act, 1996.
(KNN Bureau)
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