In another judgment involving the appointment of an arbitrator, the Supreme Court emphasized that a mere plea of fraud, coercion or undue influence by one party is not enough to get an arbitrator appointed unless the allegations are backed by satisfactory evidence on record.
In this case, United India Insurance vs Antique Art Exports Ltd, the company had purchased a policy covering fire and special perils. There was an accident in the factory and two claims were made. The insurer paid both and the exporter sent a reply accepting the computation made by the insurer and attaching a final discharge voucher.
However, after 11 weeks, the exporter alleged that the vouchers were given under duress. It moved the Delhi High Court, requesting it to appoint an arbitrator. The high court appointed one on the ground that since there were allegations of duress, the issue should be settled in arbitration. The insurer appealed to the Supreme Court. It set aside the high court order observing that it committed a manifest error by passing the order mechanically and pointing out the delay in raising the complaint after sending the discharge voucher.
