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        Companies Law

        1988 (8) TMI 380 - SC - Companies Law

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        Apprehended bias in arbitration requires cogent material; a named arbitrator cannot be removed on mere suspicion. A named arbitrator appointed under the contract cannot be removed for apprehended bias unless there is objective, cogent material showing a reasonable ...
                      Cases where this provision is explicitly mentioned in the judgment/order text; may not be exhaustive. To view the complete list of cases mentioning this section, Click here.
                        Provisions expressly mentioned in the judgment/order text.

                            Apprehended bias in arbitration requires cogent material; a named arbitrator cannot be removed on mere suspicion.

                            A named arbitrator appointed under the contract cannot be removed for apprehended bias unless there is objective, cogent material showing a reasonable likelihood of bias. A mere subjective suspicion, imagination, or vague apprehension is insufficient, especially where the parties accepted the contractual arrangement and knew the relevant administrative hierarchy. In the absence of allegations of dishonesty, mala fides, personal interest, incapacity, or other concrete material affecting impartiality, revocation of the arbitrator's authority is not justified. On the facts stated, the request to remove the named arbitrator was rejected as the apprehension of bias was found inadequate.




                            Issues: Whether a named arbitrator appointed under the contract could be removed on the ground of apprehended bias under Section 5 of the Arbitration Act, 1940.

                            Analysis: The contract itself provided for arbitration by the Superintending Engineer concerned, and the parties had entered into that arrangement knowing the administrative hierarchy and the relationship between the Chief Engineer and the Superintending Engineer. Removal of a named arbitrator requires a reasonable apprehension of bias based on cogent materials, not a mere subjective suspicion or imagination. In the absence of allegations touching honesty, capacity, mala fides, interest in the subject-matter, or any concrete material showing a real likelihood of bias, the apprehension was held to be insufficient for revocation of the arbitrator's authority.

                            Conclusion: The removal of the named arbitrator was unjustified and the appointment could not be revoked on the facts found.

                            Ratio Decidendi: A named arbitrator agreed to by the parties cannot be removed merely on vague or speculative apprehension of bias; there must be objective, cogent material showing a reasonable likelihood of bias.


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                            ActsIncome Tax
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