Independent sole arbitrator appointment where a named company officer raised a reasonable apprehension of bias in arbitration.

Under Section 11(6) of the Arbitration and Conciliation Act, the Court may appoint an independent sole arbitrator where the named arbitrator gives rise to a reasonable apprehension of lack of independence or impartiality. Although a named employee-arbitrator is not automatically disqualified merely because of his connection with a party, the surrounding circumstances here showed a real possibility that the Managing Director of the respondent could not decide the dispute independently. The arbitration clause in the purchase order was treated as a valid arbitration agreement, and an independent arbitral forum was secured by appointing an arbitrator other than the respondent's Managing Director.

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Issues: Whether, in proceedings under Section 11(6) of the Arbitration and Conciliation Act, 1996, the Court should appoint an independent sole arbitrator in place of the named arbitrator where the named arbitrator is the Managing Director of the respondent and there is a reasonable apprehension that he may not act independently and impartially.

Analysis: The arbitration clause in the purchase order was a valid arbitration agreement. The dispute had arisen on payment under the purchase orders, and the respondent had not acted to secure appointment of an effective arbitrator for resolution of that dispute. Although a named employee-arbitrator is not barred merely because he is connected with one of the parties, the surrounding facts here created a real possibility that the Managing Director, being part of the respondent organization and bound by higher governmental directions, would not be in a position to decide the controversy independently. In such circumstances, the Court found it appropriate to exercise power under Section 11(6) to secure an independent arbitral forum.

Conclusion: The request for appointment of an independent sole arbitrator was accepted, and an arbitrator other than the Managing Director of the respondent was appointed.

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