Contractual arbitrator appointment must be respected unless real bias is shown, with courts avoiding substitution of the agreed mechanism.

Contractual appointment of an arbitrator should ordinarily be enforced where the arbitration clause provides a specific nomination mechanism, and a court should not substitute an independent arbitrator merely because the appointing authority is a party to the contract. Allegations of bias justify departure from the agreed procedure only on specific facts showing a real or reasonably founded apprehension of bias, not on mere suspicion or the fact that the arbitrator is chosen from the defendant's engineers. The text states that, on the facts proved, the contractual mechanism was upheld and nomination was to proceed under the stipulated clause.

---

---

Issues: Whether the Court could appoint an independent arbitrator ignoring the contractual mechanism for appointment on the ground of alleged bias of the named appointing authority or its nominee.

Analysis: The arbitration clause required disputes to be referred to a sole arbitrator appointed by the authority specified in the contract. A contractual reference cannot be disregarded merely because the appointing authority is a party to the contract. The doctrine that no person should be a judge in his own cause applies only where there are specific facts showing a real or reasonably founded apprehension of bias. Mere suspicion, or the fact that the arbitrator is chosen from the defendant's engineers, is not enough to invalidate the agreed procedure. Where the arbitration agreement is valid and feasible to operate, the parties must ordinarily be held to their bargain and the Court should not substitute a different mode of appointment.

Conclusion: The Court should not have appointed an arbitrator outside the contractual mechanism on the facts proved; the objection of bias was rejected and the contractual appointment procedure was upheld.

Final Conclusion: The appeal succeeded, and the parties were directed to proceed under the arbitration clause with nomination of the arbitrator by the stipulated authority.

Ratio Decidendi: A court exercising power under Section 20 of the Arbitration Act, 1940 should ordinarily give effect to the parties' agreed method of appointing an arbitrator, and may depart from it only on a clear showing of circumstances creating a reasonable apprehension of bias or other legal impossibility in working the contractual procedure.

---