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PETITIONER: INTERNATIONAL AIRPORT AUTHORITY OF INDIA

       Vs.

RESPONDENT: K.D. BALI & ANOTHER

DATE OF JUDGMENT29/03/1988

BENCH: MUKHARJI, SABYASACHI (J) BENCH: MUKHARJI, SABYASACHI (J) RANGNATHAN, S.

CITATION:  1988 AIR 1099            1988 SCR  (3) 370  1988 SCC  (2) 360        JT 1988 (2)     1  1988 SCALE  (1)631  CITATOR INFO :  R          1988 SC2232  (13)  D          1991 SC 933  (11)

ACT:      Arbitration Act,  1940-Whether a  party to  arbitration proceedings  can   seek  revocation   of  authority  of  the arbitrator  appointed   under  sections   5   and   11-Of-on apprehension in  the mind  of such a party about bias of the arbitrator-Determination of the question.

HEADNOTE: %      This  petition   for  special  leave  was  against  the judgment and  order of  the High  Court of Bombay, rejecting the application  for revocation  of  the  authority  of  the respondent No.  1, the  sole arbitrator under sections 5 and 11 of the Arbitration Act, 1940 (’The Act’).      The petitioner  invited tenders for the construction of the terminal  building  of  a  new  international  passenger complex (Phase II) at the Bombay Airport. The respondent No. 2, a partnership firm, submitted a tender which was accepted and a  formal agreement  followed, with  a provision  in the agreement  for   settlement  of   disputes  through  a  sole arbitrator appointed  under clause  25 of  the conditions of contract by the competent authority.      Certain disputes  arose in  which the petitioner sought claims amounting  to Rs.85  lakhs. The  respondent No. 2-the contractor-approached the  petitioner to  refer the disputes to  arbitration.   The  Chief  Engineer  of  the  petitioner appointed respondent  No. 1  as the  arbitrator and  made  a reference with  regard to  the claim  of  Rs.85  lakhs.  The respondent No.  2 asked  the Chief Engineer to refer further disputes to  the arbitrator  and, accordingly,  on 16th May, 1986, a  second reference was made with regard to 11 further points of  dispute with  claims amounting to Rs.1.17 crores. On 23rd  December, 1986,  the Chief  Engineer made reference No. 3  to the  Arbitrator with  regard to claim amounting to Rs.5.81 crore.  Thereafter, by  applications of  8th and 9th June, 1987,  the  petitioner  expressed  objections  to  the references  Nos.   2  and  3  made  by  the  Chief  Engineer contending that  the references  were null  and void,  being

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irregularly made, and took preliminary objections before the arbitrator to  the arbitration  proceedings, being  lack  of jurisdiction of the arbitrator on the ground that he was not validly appointed  so far  as references  Nos. 2  and 3 were concerned. On 7th 371 August, 1987,  the petitioner made an application before the arbitrator under  section 13(b)  of the Act with the request to state  the matter before him for the opinion of the Court as special case.      The arbitrator  by his  order dt.  3rd  October,  1987, rejected the said application and the preliminary objections of the  petitioner. Thereafter, the petitioner alleging that the arbitrator  had formed  his own  opinion  regarding  the matters in  issue, filed an appliction before the High Court for the revocation of the authority of the arbitrator on the ground of  apprehension in  the petitioner’s mind about bias of the  arbitrator. The High Court by its judgment and order dt. 2nd  February, 1988,  rejected the  application  of  the petitioner. The  petitioner then moved this Court for relief by special leave.      Dismissing the petition for special leave, the Court, ^      HELD: It  was necessary to reiterate first what are the parameters by  which an  appointed arbitrator can be removed on the  appliction of a party. It is well-settled that there must be  purity in  the administration of justice as well as quasi-justice involved  in the  adjudicatory process  before the  arbitrator.   Once  the   arbitrator   enters   on   an arbitration, he  must not  be guilty  of any  act which  can possibly  be   construed  as  indicative  of  partiality  or unfairness. It  is not  a question  of the  effect  which  a misconduct on  his part  had in  fact upon the result of the proceeding, but  of  what  effect  it  might  possibly  have produced. It  is not  enough to  show that even if there was misconduct on  his part,  the award was unaffected by it and was in  reality just;  the arbitrator  must not  do anything which is  not in  itself fair and impartial. In the words of Lord O’Brien, L.C.J, there must be a real likelihood of bias and not  a mere  suspicion of bias before proceedings can be quashed  on  the  ground  that  the  person  conducting  the proceedings is  disqualified  by  interest.  The  purity  of administration requires  that the  party to  the proceedings should not  have apprehension  that the  authority is biased and is likely to decide against the party, but it is equally true that  it is  not every  suspicion felt by a party which must lead  to the  conclusion that the authority hearing the proceedings is  biased, as  held  by  the  High  Court.  The apprehension must  be judged  from a healthy, reasonable and average point  of view and not on a mere apprehension of any whimsical person.  It cannot  be and  should never  be in  a judicial or  quasi-judicial proceeding that a party who is a party to  the appointment  could  seek  the  removal  of  an appointed authority  or an arbitrator on the ground that the appointee being  his nominee  had not  acceded to his prayer about conduct  of the  proceedings. It is the reasonableness and apprehension 372 of an  average honest  man that must be taken note of. There was  no   substance  found   in  the   alleged  grounds   of apprehension of bias, examined in this light. [378D-G; 379D- H; 380A-B]      The High Court had examined five circumstances advanced before it.  The first was that the arbitrator did not record the minutes  of the  meetings after  September 29, 1987. The

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petitioner insisted  that the  arbitrator should  record the minutes setting  out the  entire oral  arguments advanced on behalf of  the petitioner. This was not a reasonable request and the  arbitrator rightly declined to do that. This was no basis of any reasonable apprehension of bias. [380C-E]      The next  circumstance urged  was that  the preliminary objections raised  by the petitioner were rejected without a speaking order.  It was  not necessary for the arbitrator to record a  long reasoned order on the preliminary objections, and indeed  the law  does not  demand writing  such  a  long order. In  any case,  it would  be open to the petitioner to file  a  petition  under  section  33  of  the  Act  if  the petitioner felt  that the  arbitrator had no jurisdiction to entertain the  reference. It would be open to the petitioner to challenge  the award  to be  declared by  the arbitrator, including on ground of  jurisdiction. [380E-H]      The third  circumstance was  that  the  petitioner  had filed an  application under section 13(b) of the Act calling upon the  arbitrator to state a special case for the opinion of the  Court and the failure of the arbitrator to raise the question of  law was indicative of bias. This argument could not  be   accepted.  Section  13(b)  confers  power  on  the arbitrator to  state a  special case but it does not make it obligatory on  the part of the arbitrator to state a special case as  soon as  the party  desires it.  In this  case, the petitioner itself  agitated the  issue of  jurisdiction  and other questions  of law  before the  arbitrator. Once having done so,  it was  not proper  for the  petitioner to ask the arbitrator to  state a  special case. This was no ground for bias. [381A-C]      The  fourth   ground  was  that  the  first  reference, involving  a   claim  for  Rs.85  lakhs,  was  heard  for  a considerable time,  while the  arguments in  respect of  the second and  third  references  covering  claims  of  Rs.1.17 crores and  Rs.5.81 crores  were concluded by the respondent No. 2  within one and one-fourth of a day. The length of the time taken  is no  indication of  either speeding  up or any abuse of  the proceedings.  The Court  agreed with  the High Court that  there is  no rule which requires that the length of the  argument should  depend upon  the magnitude  of  the claim made. [381D] 373      The other  point urged  by the  petitioner was that the venue of arbitration was changed and this change was without the consent  of the  petitioner. Change of venue would in no manner indicate  that the  arbitrator was prejudiced against the petitioner.  This was solely a fallacious ground to make out a case of alleged bias. [381E-G]      The other ground was that as, since 9th June, 1987, the petitioner had not paid for the air-ticket of the arbitrator from Delhi  to Bombay and for his residential accommodation, the respondent  No. 2  must be  providing for the air-ticket and the  hotel accommodation  for the  arbitrator,  and  the arbitration was  likely to be biased. As rightly pointed out by the High Court, the petitioner, after the 9th June, 1987, seemed to  have  decided  that  the  arbitrator  should  not proceed with  the reference  and in  order to  frustrate the arbitration  proceedings,   started  raising  all  sorts  of frivolous and  unsustainable  contentions.  Having  realised that the  arbitrator  was  not  willing  to  submit  to  its dictates, the petitioner declined to contribute for the air- ticket, etc.  No party  should be  allowed to  throw out the arbitration  proceedings   by  such   tactics,  and  if  the arbitrator did  not surrender  to the pressure, he could not be faulted  nor could  the proceedings  of the arbitrator be

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allowed to be defeated by such a method. [381G-H; 382B-D]      Another ground  made was  that  there  was  a  loss  of confidence. There  was no  reasonable ground for such a loss of confidence. Every fancy of a party cannot be a ground for removal of the arbitrator. [382D]      The Court  was in  agreement with  the learned Judge of the High  Court expressing  unhappiness over  the manner  in which attempts  had been  made  to  delay  the  proceedings. [382G]      The Court  found no ground to conclude that there could be any ground for reasonable apprehension in the mind of the petitioner for revocation of the authority of the arbitrator appointed by  the petitioner  itself.  While  endorsing  and fully maintaining  the integrity  of the  principle ’justice should not only be done, but should manifestly be seen to be done’, it is important to remember that the principle should not be  led to  the erroneous impression that justice should appear to  be done than it should in fact be done. There was no reasonable  ground  of  any  suspicion  of  bias  of  the arbitrator. The  conduct of  the  arbitrator  did  not  fall within the  examples given  and principles enunciated in the instances  of  cases  where  bias  could  be  found  in  the Commercial Arbitration  by  Mustill  and  Boyd,  1982,  Edn. [383A-C] 374      Russell on  Arbitration, 18th  Edition,  page  378,  Re Brion and  Brien, [1910]  2 I.R. 83, 89; The King (De Vesci) v. The  Justices of  Queen’s Country, [1908] 2 I.R. 285; The Queen v.  Rand  &  Ors.,  [1986]  1  Q.B.  230;  Ramnath  v. Collector, Darbhanga,  ILR 34  Pat. 254;  The Queen v. Meyer and Ors., [1875] 1 Q.B. 173; Ekersley and Ors. v. The Messey Docks and  Harbour Board,  [1894]  2  Q.B.  667;  Gallapalli Nageswara Rao  v. The  State of Andhra Pradesh, [1960] 1 SCR 580; Mineral  Development Ltd.  v. State  of Bihar, [1960] 2 SCR 609; Ranjit Thakur v. Union of India & Ors., A.I.R. 1987 SC 2386 and R.V. Camborne Justices Ex parte Pearce, [1954] 2 All. E.R. 850, 855 referred to.

JUDGMENT:      CIVIL APPELLATE  JURISDICTION: Special  Leave  Petition (Civil) No. 2545 of 1988.      From the  Judgment and  Order  dated  2.2.1988  of  the Bombay High Court in Arbitration Petition No. 234 of 1987.      G. Ramaswamy,  Additional Solicitor General, K.V. Kini, S. Bharthari and P.H. Parekh for the Petitioner.      K.S. Cooper,  D. Karkali,  R. Karanjawala  and Mrs.  M. Karanjawala for the Respondents.      The Judgment of the Court was delivered by      SABYASACHI MUKHARJI, J. After hearing the parties fully we had  by our  order dated  10th March,  1988 dismissed the special  leave   petition   under   Article   136   of   the Constitution. We  stated therein  that we would indicate the reasons by  a separate  judgment later.  We do  so  by  this judgment.      This is  a petition  for leave  to appeal under Article 136 of  the Constitution  from the judgment and order of the learned  Judge  of  the  High  Court  of  Bombay  dated  2nd February, 1988.  By the  impugned judgment the learned Judge has rejected the application for revocation of the authority of respondent  No. 1,  Shri K.D. Bali, sole arbitrator under sections 5  and 11 of the Arbitration Act, 1940 (hereinafter called ’the  Act’). In  order to  appreciate the contentions raised, it  may be  stated that  the  International  Airport

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Authority of  India which  was the  petitioner in  the  High Court and  is the  petitioner herein had invited tenders for the  work  of  construction  of  terminal  building  of  new international passenger  complex (Phase  II) at  the  Bombay Airport at 375 Sahar, Bombay.  Respondent No.  2, M/s.  Mohinder Singh  and Company, a  partnership firm  having  registered  office  at Delhi and  carrying on business in Bombay submitted a tender and it  was accepted  for the  value  of  Rs.7,26,31,325.  A formal agreement  followed on  22nd January, 1982. It is not necessary to  refer to  the clauses of the agreement for the present purposes.  It may be reiterated, however, that there was provision  in the  agreement for  settlement of disputes through appointment  of sole  arbitrator under  clause 25 of the Conditions  of  Contract  by  the  competent  authority. Certain disputes arose in which the petitioner sought claims amounting  to  Rs.85  lakhs.  Respondent  No.  2  contractor approached the  petitioner by  letter dated  22nd  February, 1985 to  refer the  disputes with regard to claims amounting to Rs.85  lakhs to  the arbitration.  One Shri K.K. Sud, the Chief Engineer  of the  petitioner by  his letter  appointed respondent No.  1 as  the arbitrator  and made the reference with regard  to the  claim of Rs. 85 lakhs on 23rd February, 1985. On  8th March,  1985, it appears from the narration of the events in the judgment impugned that the arbitrator gave directions to the parties regarding submission of pleadings. Respondent No.  2  filed  pleadings  within  time,  but  the petitioner filed  its pleadings  after a  delay of two and a half months.  On 17th March, 1986 respondent No. 2 addressed a letter  to the  Chief Engineer  asking  for  reference  of further disputes  to the arbitration and accordingly on 16th May, 1986  a second  reference was made referring 11 further points  of   dispute.  A   third  reference  was  sought  by respondent No.  2 on 22nd May, 1986 in respect of seven more claims but the petitioner informed on June 12, 1986 that the third reference was premature. It appears that in respect of the  second  and  third  references  the  assertion  of  the petitioner was that these disputes were not referable to the arbitrator. The  arbitrator  had  directed  the  parties  to submit their  statements in  respect of second reference and though respondent  No. 2  submitted  its  claim  within  the stipulated period, the petitioner had again delayed doing so according  to   the  learned  Judge  and  according  to  the assertions of respondent No. 2 for a period of three months. On 16th  May, 1986  the Chief  Engineer made reference No. 2 with regard  to claims  amounting to  Rs.1.17 crores  to the arbitrator. On 23rd December, 1986 the Chief Engineer of the petitioner made  another reference  being reference No. 3 to the arbitrator  with regard  to claims  amounting to Rs.5.81 crore. The  petitioner by  its applications  of 8th  and 9th June, 1987 expressed its objections to the references Nos. 2 and 3  made by  the  Chief  Engineer  as  according  to  the petitioner the  said references  were null and void as these were irregularly  made. On 26th June, 1987 the petitioner by its written  submissions took  preliminary objection  before the arbitrator 376 to  the   said  arbitration   proceedings,  being   lack  of jurisdiction of  the arbitrator  on account of the fact that he was not validly appointed as far as references Nos. 2 and 3 were  concerned. The  petitioner by  its application dated 3rd August,  1985 noted  that respondent No. 1 had not noted the  minutes  of  the  meeting  dated  10th  of  June,  1985 correctly. The  petitioner by  its application  on  15th  of

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June, 1987  requested respondent  No. 1  not to proceed with the arbitration  proceedings till its preliminary objections regarding jurisdictional  aspects were decided and also made it  clear  that  it  was  appearing  under  protest  in  the proceedings before  him. The  petitioner on  17th June, 1987 made oral submissions before respondent No. 1 with regard to its preliminary  objections. Respondent  No. 1  directed the petitioner to  submit the  rest of  its submission by way of written submissions.  The  petitioner  by  its  applications dated 22nd  and 25th  June, 1987,  respectively objected  to respondent No.  1 directing it to make submissions by way of written submissions and thus hurrying up the proceedings. On 26th June, 1987 the petitioner submitted written submissions to respondent  No. 1.  Respondent No.  1 by  his order dated 27th June,  1987 directed  that further proceedings would be undertaken only  after the extension of time. Respondent No. 2 applied  for enlargement  of time and the same was granted by the  High Court.  On 7th  August, 1987  application under section 13(b) of the Act was made before the arbitrator with a request  to state the matter before it as Special Case for the opinion of the Court.      The arbitrator  by his  order dated  3rd October,  1987 rejected the  said application  of the  petitioner and  also rejected the preliminary objections of the petitioner at the same time.  On 14th  October, 1987  the  petitioner  by  its letter noted  the fact  that it  has sent the minutes of the meeting with regard to the proceedings held on 28th and 29th September, 1987 to the arbitrator as directed by him. In the said  letter  the  petitioner  also  protested  against  the arbitrator’s  decision   of  changing   the  venue   of  the proceedings and  also the  inconvenient dates being fixed by him. The  petitioner by  its letter dated 11th October, 1987 conveyed its  concern to  the arbitrator  that he  has  been rushing through  the proceedings. On 16th December, 1987 the petitioner alleging  apprehension that  respondent No. 1 had formed his  own opinion  regarding the matters in issue. The petitioner  approached  the  High  Court  with  the  instant application. This  application  was  rejected  by  the  High Court. The  learned Judge changed the date fixed for hearing of the  application for  extension of  time by enlarging the time to make the award by 15th February, 1988. 377      The main contention for the revocation of the authority of the  arbitrator was about the alleged apprehension in the mind of  the petitioner  about bias  of the sole arbitrator. The learned Judge of the High Court was unable to accept any ground for  alleged apprehension.  It  is  apparent  as  the learned Judge  noted that respondent No. 2 had complied with the directions  of the  arbitrator about  the conduct of the proceedings but  the petitioner went on seeking adjournments after adjournments.  Respondent  No.  2  complained  to  the arbitrator on  4th May,  1987  about  the  delaying  tactics adopted by  the  petitioner  and  thereupon  the  arbitrator directed that  the hearing  would take  place on 8th and 9th June, 1987  and no  further adjournment  would  be  granted. After this  direction  was  given  by  the  arbitrator,  the petitioner addressed  a letter  dated 25th  May, 1987 to the arbitrator objecting  to the  jurisdiction in respect of the second  and   third  references.   The  objections   to  the jurisdiction raised  by the  petitioner were, that the claim made in  the second  and third  references  were  barred  by principles analogous to Order II Rule 2 of the Code of Civil Procedure, the  Chief Engineer had no authority to refer the disputes to  the arbitration,  the claims made by respondent No. 2  were beyond  the stipulated  period of  90  days  and

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therefore were not arbitrable and the time for declaring the award having expired, the Arbitrator could not continue with the arbitration  proceedings. On 8th June, 1987 as mentioned hereinbefore the  learned advocate for the petitioner orally made submissions on the issue of jurisdiction and thereafter sought adjournment  till June  9, 1987  for  filing  written submissions. On  9th June,  1987 apart  from filing  written submissions  further   oral  arguments   were  advanced  and thereafter an  adjournment was sought beyond June 1987. This adjournment was sought because the time to declare the award was expiring  by June,  1987. The hearing was adjourned till June 17,  1987 and again the petitioner’s advocate argued on preliminary objections  about  jurisdiction.  The  arguments were advanced  on the next adjourned dates, that is, June 26 and June  27, 1987. It further appeared that as the time for making the  award had  expired and  the petitioner  did  not consent to  the extension  of time,  respondent No.  2 filed petition to  the High  Court of Bombay for extension of time on  June   21,  1987.  Thereafter  the  petitioner  made  an application before the arbitrator under section 13(b) of the Act calling  upon the  arbitrator to  state special case for the opinion  of the  High Court  on  certain  alleged  legal objections. In  the meanwhile  the petition for extension of time filed in the Bombay High Court was granted and the time for declaring  the award was extended till January 15, 1988. Thereafter the arbitrator fixed the hearing on September 28, 1987 and  the advocate  for the  petitioner again reiterated the  preliminary  objections  to  the  jurisdiction  of  the arbitrator and 378 insisted upon  the  arbitrator,  passing  an  order  on  the application under  section 13(b)  of the Act. The arbitrator rejected the  preliminary objections  by his order dated 3rd October, 1987  and also  the application for stating special case to  the High  Court under section 13(b) of the Act. The Petitioner’s advocate  thereupon sought  adjournment of  the hearing and  accordingly hearing  was adjourned  on  several dates. Ultimately, the arbitrator fixed the hearings on 30th October, 1987  and  31st  October,  1987.  The  hearing  was postponed  to  2nd  November,  1987  and  on  that  day  the petitioner’s  advocate   remained  absent.   Thereafter  the hearing proceeded on 6th November and 11th November, 1987 as well as  on 13th,  18th and  19th November, 1987. Respondent No. 2  concluded arguments, while the arguments on behalf of the petitioner  were  advanced  on  December  3,  1987.  The arguments further  proceeded on  December  8  and  9,  1987. Thereafter on  December 17,  1987 the  present petition  was filed for  revocation of the appointment of respondent No. 1 as the  sole arbitrator. In our opinion, the above narration gives a glimpse how a party can try to prolong a proceeding.      Several points were taken in support of the application for  revocation.   It  was  sought  to  be  urged  that  the petitioner had  lost confidence  in the  sole arbitrator and was apprehensive  that the arbitrator was biased against the petitioner. It  is necessary  to reiterate before proceeding further what  are  the  parameters  by  which  an  appointed arbitrator on  the application of a party can be removed. It is  well   settled  that   there  must   be  purity  in  the administration of  justice as  well as  in administration of quasi-justice as  are involved  in the  adjudicatory process before the  arbitrators. It  is  well  said  that  once  the arbitrator enters in an arbitration, the arbitrator must not be guilty  of any  act which  can possibly  be construed  as indicative of partiality or unfairness. It is not a question of the  effect which misconduct on his part had in fact upon

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the result  of the  proceeding, but  of what effect it might possibly have  produced. It is not enough to show that, even if  there   was  misconduct  on  his  part,  the  award  was unaffected by  it, and  was in reality just; arbitrator must not do  anything which  is not in itself fair and impartial. See Russell  on  Arbitration,  18th  Edition  page  378  and observations of Justice Boyd in Re Brien and Brien, [1910] 2 I.R. 83 at p. 89. Lord O’Brien in The King (De Vesci) v. The Justices of  Queen’s Country,  [1908] 2 I.R. 285 observed as follows:           "By bias  I understand  a real  likelihood  of  an           operative   prejudice,    whether   conscious   or           unconscious.  There   must  in   my   opinion   be           reasonable evidence to satisfy us that there was a           real likelihood of bias. I do not think that their 379           vague  suspicions   of  whimsical  capricious  and           unreasonable people  should be  made a standard to           regulate our  action here. It might be a different           matter if  suspicion rested  on reasonable grounds           was reasonably  generated and  but certainly  mere           flimsy  grounds  elusively  generated  and  morbid           suspicions should  not  be  permitted  to  form  a           ground of decision."  (Emphasis supplied) See The Queen v. Rand and others, [1866] 1 Q.B. 230; Ramnath v. Collector,  Darbhanga, I.L.R.  34 Pat.  254; The Queen v. Meyer and others, [1875] 1 Q.B. 173 and Eckersley and others v. The Mersey Docks and Harbour Board, [1894] 2 Q.B. 667.      In the  words of Lord O’Brien, LCJ there must be a real likelihood of  bias. It is well settled that there must be a real likelihood  of bias  and not  mere  suspicion  of  bias before the proceedings can be quashed on the ground that the person  conducting   the  proceedings   is  disqualified  by interest. See in this connection Gullapalli Nageswara Rao v. The State  of Andhra  Pradesh, [1960]  1 SCR 580 and Mineral Development Ltd.  v. State  of  Bihar,  [1960]  2  SCR  609. Recently this  Court in  a  slightly  different  context  in Ranjit Thakur v. Union of India and others, A.I.R. 1987 S.C. 2386 had occasion to consider the test of bias of the Judge. But there must be reasonableness of the apprehension of bias in the  mind of  the party.  The  purity  of  administration requires that  the party  to the proceedings should not have apprehension that  the authority  is biased and is likely to decide against  the party.  But we  agree with  the  learned Judge of  the High  Court that it is equally true that it is not every  suspicion felt  by a party which must lead to the conclusion that  the authority  hearing the  proceedings  is biased. The  apprehension must  be judged  from  a  healthy, reasonable and  average  point  of  view  and  not  on  mere apprehension of any whimsical person. While on this point we reiterate that  learned counsel appearing for the petitioner in his  submissions made  a strong  plea that his client was hurt and  had apprehension  because the arbitrator being the appointee of  his client  was not acceding to the request of his client which the petitioner considered to be reasonable. We  have  heard  this  submission  with  certain  amount  of discomfiture because  it cannot  be and  we hope  it  should never be  in a  judicial or  a quasi-judicial  proceeding  a party who  is a  party to  the appointment  could  seek  the removal of  an appointed  authority  or  arbitrator  on  the ground that  appointee being  his nominee had not acceded to his 380 prayer about the conduct of the proceeding. It will be a sad

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day in the administration of justice if such be the state of law.  Fortunately,   it  is  not  so.  Vague  suspicions  of whimsical, capricious  and unreasonable  people are  not our standard to  regulate our  vision. It  is the reasonableness and the  apprehension of  an average honest man that must be taken note  of. In  the  aforesaid  light,  if  the  alleged grounds of  apprehension of  bias are  examined, we  find no substance in  them. It  may be mentioned that the arbitrator was appointed  by the  Chief Engineer of the petitioner, who is in the service of the petitioner.      The learned  Judge had  examined the five circumstances advanced before  him. The  first was that the arbitrator did not record  the minutes  of the meetings after September 29, 1987. The  learned Judge  found that  there was  no merit in this complaint.  After 29th September, 1987 the petitioner’s advocate orally  made submissions that the arbitrator had no jurisdiction to  entertain the dispute. The advocate for the petitioner also  desired to  file written  arguments and the arbitrator did  not object  to the same. In spite of it, the petitioner insisted  that the  arbitrator should  record the minutes setting  out the  entire oral  arguments advanced on behalf of  the petitioner.  This in  our opinion  was not  a reasonable request  to make  and the  arbitrator had rightly declined to  do so.  This is  no  basis  of  any  reasonable apprehension of bias.      The next  circumstance urged  was that  the preliminary objections raised  by the petitioner were rejected without a speaking order.  It was  not necessary for the arbitrator to record a  long reasoned  order on the preliminary objections and indeed  the law  does not  demand writing  such  a  long order. In  any case,  it will  be open  to the petitioner to file any  petition in the Court under section 33 of the Act, if  the   petitioner  felt   that  the   arbitrator  had  no jurisdiction to  entertain the reference, but the petitioner did not  choose to  adopt that course and proceeded to argue for a considerable length of time, the issue of jurisdiction before the  arbitrator. The arbitrator was not bound to give a reasoned  order at  every stage  of the  proceedings.  The arbitration proceedings  would then never come to an end. It was not  in dispute that the terms of reference required the arbitrator to  give reasons for the award to be declared. It would be,  therefore, always  open  for  the  petitioner  to challenge  the  award  to  be  declared  by  the  arbitrator including on  the ground of jurisdiction. The learned Single Judge of  the High Court has so held and we are in agreement with him on this point. 381      The third  circumstances was  that the  petitioner  had filed application  under section  13(b) of  the Act  calling upon the  arbitrator to state a special case for the opinion of the  Court on  the question of law and the failure of the arbitrator to  raise this  question of law was indicative of the bias.  We are  unable to  accept this  argument. Section 13(b) confers  power on the arbitrator to state special case but it  does not  make it  obligatory on  the  part  of  the arbitrator to  state a  special case  as soon  as the  party desires to  do so. In the instant case the petitioner itself agitated issue  of jurisdiction before the arbitrator and by its conduct submitted the question of jurisdiction and other questions of  law for  determination of the arbitrator. Once having done  so, it was not proper for the petitioner to ask the arbitrator  to  state  a  special  case.  This,  in  our opinion, is no ground for bias.      The fourth  ground was  that the first reference, where the  claim  involved  was  Rs.85  lakhs,  was  heard  for  a

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considerable time,  while the arguments in respect of second and third  references, which  covered the  claim of  Rs.1.17 crores and Rs.5.81 crores were concluded by respondent No. 2 within one  and one  fourth of a day. The length of the time taken is no indication either of speeding up or of any abuse of the  proceedings. We  agree with  the learned  Judge that there is  no rule which requires that the length of argument should depend upon the magnitude of the claim made.      The other  point sought  to be  urged by the petitioner was that  the venue  of the  arbitration  was  changed  from conference  room   at  Santacruz  Airport,  Bombay,  to  the conference room  at Indian Merchants Chambers at Churchgate, Bombay. It  is the  claim of the petitioner that this change of venue  was without  the consent  of  the  petitioner.  It appears from  the affidavit filed before the High Court that the  venue   was  changed  because  of  disturbance  at  the conference room  at Santacruz and this fact was known to the petitioner all  along. Change  of venue  in no  manner would indicate that  the arbitrator  was  prejudiced  against  the petitioner and  no prayer  was made to the arbitrator not to change the venue. This is solely a fallacious ground to make out a  case of  alleged bias.  The other ground was that the petitioner and  respondent No.  2 used to share the costs of the air  ticket of  the arbitrator  from Delhi to Bombay and back. It  was  submitted  that  since  9th  June,  1987  the petitioner has not paid for the ticket and also not provided for residential  accommodation at  Santacruz Airport. It was further submitted  that respondent  No. 2  must be providing the  air-ticket   and  also   hotel  accommodation   to  the arbitrator and  the receipt  of these facilities was enough, according to the petitioner, to 382 establish that  the arbitration  was likely to be biased. It is said  that the  petitioner made these allegations because the petitioner  declined to  contribute for the costs of the air-ticket  and   providing  for   the  accommodation.   The petitioner obstructed  at all  stages of  the proceedings of arbitration, what  the arbitrator  did he  did openly to the knowledge of  the respondents.  As  the  learned  Judge  has rightly pointed  out the  petitioner after  9th  June,  1987 seems to have decided that the arbitrator should not proceed to  hear  the  reference  and  in  order  to  frustrate  the arbitration  proceedings   started  raising   all  sorts  of frivolous and  unsustainable contentions.  Having failed and realised that  respondent No. 1 was not willing to submit to the dictates  of the  petitioner, the petitioner declined to contribute   for    the   air-ticket   and   providing   for accommodation. No  party should  be allowed to throw out the arbitration proceeding by such tactics and if the arbitrator has  not   surrendered  to  pressure  in  our  opinion,  the arbitrator  cannot   be  faulted   on  that  score  nor  the proceedings of  the arbitrator  be allowed to be defeated by such method.      There was  another ground  sought to  be made before us that there  was a  loss of confidence. We find no reasonable ground for  such loss  of confidence. Every fancy of a party cannot be  a ground  for removal  of the  arbitrator. It was alleged  that   there  were   counter  claims  made  by  the respondents. These  counter claims  have not  yet been dealt with by  the arbitrator. Our attention was drawn to page 188 of Volume  II of  the paper  book where  a counter claim had been  referred  to.  It  appears  that  the  petitioner  has separately  treated  these  counter  claims.  These  counter claims have  not yet been considered by the arbitrator. That is no  ground for any apprehension of bias. An affidavit was

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filed before  us that on 6th March, 1988 a letter was served indicating the dates for hearing as 7th to 10th March, 1988.      It appears that the matter was adjourned thereafter but by merely making an application for adjournment and refusing to  attend   the  arbitration  proceeding,  a  party  cannot forestall arbitration proceeding.      We are  in agreement with the learned Judge of the High Court expressing  unhappiness as  to  the  manner  in  which attempts had  been made  to delay the proceeding. There is a great deal  of legitimate  protest at  the delay in judicial and quasi-judicial  proceeding. As a matter of fact delay in litigation in courts has reached such proportion that people are losing  faith in  the adjudicatory process. Having given our anxious  consideration to  the grounds  alleged in  this application, 383 we find no ground to conclude that there could be any ground for reasonable  apprehension in  the mind  of the petitioner for revocation  of the authority of the arbitrator appointed by  the   petitioner  itself.   While  endorsing  and  fully maintaining the  integrity of  the principle ’justice should not only be done, but should manifestly be seen to be done’, it is important to remember that the principle should not be led to  the erroneous  impression that justice should appear to be  done  that  it  should  in  fact  be  done.  See  the observations of Slade, J. in R. v. Cambore Justices Ex parte Pearce, [1954] 2 All. E.R. 850 at 855. We are satisfied from the facts mentioned hereinbefore that there is no reasonable ground of any suspicion in the mind of the reasonable man of bias of the arbitrator. Instances of cases where bias can be found in  Commercial Arbitration  by Mustill  and Boyd, 1982 Edn. The  conduct of  the present  arbitrator does  not fall within the  examples given  and  the  principles  enunciated therein.      The petition  for leave to appeal, therefore, fails and it is accordingly dismissed. S.L.                                       Appeal dismissed. 384