United India Insurance Co. Ltd. vs Antique Art Exports Pvt. Ltd.
[2019] 5 S.C.R. 521; 2019 INSC 415
Coram: Hon’ble Justice A.M. Khanwilkar & Hon’ble Justice Ajay Rastogi
Forum: Hon’ble Supreme Court of India
Case No.: Civil Appeal No. 3284 of 2019 with Civil Appeal No.3285 of 2019
Date of Decision: March 28, 2019

Facts & Background:

  • United India Insurance Co. Ltd., an insurance company, was the Appellant.
  • Antique Art Exports Pvt. Ltd., the claimant, operated its factory in Panipat and was the Respondent.
  • The Respondent purchased two Standard Fire and Special Perils Policies in 2013. Due to alleged short circuits, fires occurred on September 25 and October 25, 2013.
  • Upon being notified of the incidents, the Appellant appointed M/s Protocol Surveyors & Engineers Pvt. Ltd. and engaged an investigator to conduct fact-finding reports. Subsequently, the claims were approved.
  • On 5 May 2016, the Appellant approved the fire claim for Rs. 2,81,44,413 for the 25 October 2013 incident and Rs. 2,20,36,840 for the 25 September 2013 incident. The Respondent accepted both claims without objection and executed discharge vouchers.
  • On July 11, 2016, the Respondent requested additional reports but did not allege coercion. Nearly 11 weeks later, on July 27, 2016, the Respondent raised allegations of fraud, coercion, and undue influence in obtaining consent without providing prima facie evidence.
  • The Respondents filed an application under Section 11(6) of the Arbitration and Conciliation Act, 1996, before the Delhi High Court, alleging coercion in executing discharge vouchers. The Appellant contested this, asserting voluntary execution and the absence of an arbitral dispute.
  • The High Court, relying on Section 11(6A) of the Arbitration and Conciliation Act, 1996, observed the arbitration agreement's undisputed existence and appointed a sole arbitrator to adjudicate the dispute.
  • Hence, the present appeal.

Main Issue:

  • Was the discharge acceptance of the compensation and signing of the discharge letter voluntary or under coercion or undue influence, and was the Respondent justified in invoking Section 11(6) of the Act? (Paragraph 12)