ROYAL EXCHANGE ASSURANCE v. KOOMSON

JUDGMENT OF ARCHER J.

The applicants, Royal Exchange Assurance, were served with third party notice at the request of the defendant who has been sued by the plaintiff claiming ¢72,000 (seventy-two thousand cedis) for loss, pain and suffering as a result of the alleged negligent driving by the defendant of Vauxhall car No. AS 4511 on 16 August 1965; the said car having been insured with the Royal Exchange Assurance against third party risks.

[p.680]

The Royal Exchange Assurance has applied to the court under section 8 of the Arbitration Act, 1961,1 to stay the third party proceedings. Section 8 of the Act reads:

“If any party to an arbitration agreement, or any person claiming through him, commences any legal proceedings in any court against any other party to the agreement, or any person claiming through him, in respect of any matter agreed to be referred, any party to those legal proceedings may apply to that court to stay the proceedings, and that court, if satisfied that there is no sufficient reason why the matter should not be referred in accordance with the agreement, and that the applicant was, at the time when the proceedings were commenced, and still remains, ready and willing to do all things necessary to the proper conduct of the arbitration, may make an order staying the proceedings.”

The language in this section clothes the court with unfettered discretion and the question I have to ask myself is whether this is one of those cases in which I have a discretion. The Royal Exchange Assurance by paragraphs (4), (5) and (6) of their affidavit in support of the motion depose as follows:

“(4) That the company admits issuing to the defendant the said policy in respect of his vehicle registration No. AS 4511 but that the same was issued subject to the terms and conditions contained therein.

(5) That condition 8 in the said policy provides that all differences arising out of the said policy shall be referred to arbitration and that an award of such arbitration shall be a condition precedent to any right of action against the insurance company.

(6) That when this claim was brought by the plaintiff against the defendant the insurance company repudiated liability to indemnify the defendant on the ground that the policy herein only covers a private car and excludes liability to passengers travelling or carried on the vehicle."

The applicants therefore rely on condition 8 in the policy and insist that the defendant is bound by that condition and t