Insurance arbitration clause strictly barred arbitration after repudiation of liability; civil suit was the proper remedy.

An insurance policy arbitration clause was construed strictly and held to permit arbitration only where liability was admitted and the dispute concerned quantum. Because the insurer repudiated the claim and denied liability under the policy, the clause expressly barred reference to arbitration. The repudiation was not a mere dispute over quantification but a refusal of the claim altogether, so the insured's remedy lay in a civil suit. The view that the clause was internally inconsistent was rejected, and the appointment of an arbitrator was held unjustified. The order appointing the arbitrator was set aside.

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Issues: Whether, under the insurance policy arbitration clause, disputes could be referred to arbitration after the insurer repudiated the claim and denied liability under or in respect of the policy.

Analysis: The arbitration clause was construed strictly according to its terms. It provided arbitration only where the dispute was as to quantum and liability was otherwise admitted, and it expressly excluded reference to arbitration where the insurer had disputed or not accepted liability under or in respect of the policy. The repudiation communication gave reasons for refusing the claim altogether and did not merely raise a dispute about quantification. The clause therefore operated as an express bar to arbitration, and the insured's remedy lay in a civil suit. The High Court's view that the clause was internally discordant was rejected.

Conclusion: The dispute was not arbitrable under the policy clause after repudiation of liability, and the appointment of an arbitrator was unjustified. The order appointing the arbitrator was set aside in favour of the appellant.

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