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Issues Involved:
1. Validity of the arbitration agreement under section 33 of the Indian Arbitration Act. 2. Validity of the award pronounced by the arbitrator despite a court's injunction. Detailed Analysis: 1. Validity of the Arbitration Agreement: The appellant-company challenged the arbitration agreement's validity, arguing that the arbitration clause had ceased to be operative. The company contended that the question of the arbitration agreement's existence and validity should be determined by the court under section 33 of the Indian Arbitration Act, not by the arbitrator. The relevant clause in the insurance policy stated that all differences arising out of the policy should be referred to arbitration, and if the company disclaimed liability, the claim must be referred to arbitration within twelve months, failing which the claim would be deemed abandoned. The company's case was that it disclaimed liability on three occasions, and the respondent did not take action within the stipulated twelve months, thus abandoning the claim. The respondent argued that there was no valid disclaimer by the company, as the branch manager lacked the authority to disclaim liability. The court had to decide whether the dispute fell under the arbitrator's jurisdiction or the court's. The court referred to section 33 of the Arbitration Act, which allows any party to challenge the existence or validity of an arbitration agreement. It concluded that the dispute required recourse to the insurance contract, making it a difference arising out of the policy. Thus, the arbitrator had jurisdiction as the parties made him the sole judge of all differences arising out of the policy. The court cited precedents like Heyman v. Darwins, Ltd., Macaura v. Northern Assurance Co., and Stebbing v. Liverpool and London and Globe Insurance Company Limited to support its decision. The court rejected the appellant's contention that the arbitration agreement's existence was challenged, as both parties admitted being bound by the clause. The real question was whether the respondent complied with the agreement's conditions, not the agreement's effect. The High Court's view that the arbitrator had jurisdiction was upheld. 2. Validity of the Award: The appellant argued that the award was invalid as it was pronounced despite a court's injunction directing the arbitrator not to pronounce any award. However, this issue did not fall within the appeal's scope, as the application under section 33 was filed before the award was pronounced and did not reference the award or the circumstances invalidating it. The appellant's request to amend the petition under section 33 to include facts invalidating the award was rejected. The Subordinate Judge had indicated that objections to the award should be filed in the appropriate court, and the appellant did not take this course. The court refused to widen the original petition's scope and investigate facts without lower courts' judgments. In conclusion, the appeal was dismissed with costs, affirming that the arbitrator had jurisdiction to decide the dispute, and the award's validity could not be challenged in the current appeal.
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