Khatram v. The New India Assurance Co. Ltd. Civ. Case 34-A-68; 24/1/70; Platt j.
It was agreed in a commercial vehicle policy of insurance agreement between plaintiff and defendant that all differences arising out of the policy would be referred to the decision of an Arbitrator to be appointed by the parties. By the same agreement, any claim against the defendant Insurance Company had to be referred to arbitration within twelve months of the Insurance Company dis-claiming liability otherwise the claim would be deemed to have been abandoned. In an action filed by plaintiff defendant pleaded that there was no cause of action as the plaintiffs had not resorted to arbitration first. After this action had been dismissed, plaintiffs appointed an Arbitrator and informed defendants whereupon the defendants replied that the plaintiffs were no longer entitled to have recourse to the provisions of arbitration. Plaintiff brought this suit and defendants took a preliminary objection that once again plaintiffs had brought their suit prematurely without first referring to arbitration. Plaintiffs argued that by reason of its attitude towards plaintiff’s claim, the defendant company had waived the condition precedent of obtaining an award and it was estopped from claiming that such an award is a condition precedent to any right of action. The Defendant’s reply was that they had merely pointed out to the plaintiffs that they had no right to go to arbitration, and this did not mean that they need not go to arbitration, and that plaintiffs were not entitled to go to arbitration after having lost their first suit.
Held: (1) “What is really said by the plaintiffs is that there was no possible reason for them to go on to arbitration at all. Therefore it is contended that whatever the plaintiffs did, the defendants would simply object to any stop taken. Although it was not Mr. Vohora but Mr. Lakha who referred me to BARRETT BROS. (TAXIS) LTD. v. DAVIES (1966) 1 W.L.R. 1334. It may be that that authority was more in favour of the plaintiffs than the defendants. Lord Denning (at page 1339) made the point very clearly that he law never compels a person to do that which is useless and unnecessary. So in that case although the Insured ought to have informed the Insurers of the details of the Police investigation and legal action taken against him, the Insurers had received all this information from the Police direct. Therefore they could not complain because the Insured had not duplicated all the information which the Police had provided the. In Lord Denning’s view, it would have been useless and unnecessary for the Insured to provide it. In the instant case, the situation was different, but if the defendants were saying that whatever the plaintiffs did with regard to arbitration, they could not go to arbitration at all, what use was it for the plaintiffs to have delayed the matter by trying to get an Arbitrator appointed to whom the defendants would simply object? It is this aspect of the letter of the 26th September which I think is of greatest importance. In these circumstances I find the following comment in Russell on Arbitration 16th Ed. p. 85 of some guidance. A party will be precluded from setting up a condition precedent in an agreement if he waives his right to insist on arbitration as a condition precedent, “or if by his neglect or default, the claiming party had been unable to obtain an award in spite of taking all proper steps to do so.” Several
Cases are then cited of which CIA. PANAMENA EUROPEA NAVIGATION v.
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