TaxTMI 
TaxTMI 
1988 (8) TMI 380
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...., dated 21st September, 1984. The appellant is the Secretary to the Government, Transport Deptt. , Madras, and the respondent No. 1 is the managing partner of M/s. National Company, which was the successful tenderer of the work of construction of a bridge across the river Coovum at Koyambedu within the corporation limit of the city of Madras and accordingly the necessary contract was executed between the respondent No. 2-the Superintending Engineer (Highways) World Bank Project Circle, Madras, and the said Company on 28th April, 1979. According to the conditions of the contract between the parties, the work should have been completed on or before 5th November, 1980. The said National Company, however, according to the appellant, did not ....
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.... be appointeded arbitrator. The contract between the parties, inter alia, contained the following Arbitration Clause: "(3) The arbitrator for fulfilling the duties set forth in the arbitration clause of the Standard Preliminary Specification shall be Superintending Engineer (H) Rural Roads Tiruchira Palli Circle." Pursuant to this the Superintending Engineer of that Circle, at the relevant time, was previously appointed as arbitrator. There was succession to that office by 'another incumbent and the succeeding Superintending Engineer wanted to continue the arbitration proceedings but before that an application was made under Section 5 of the Arbitration Act, l940 (hereinafter called `the Act') for removal of the arbitrator, before ....
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....eer against the appellant. The High Court also did not examine this aspect and dismissed the appeal in limine. Hence, this appeal. Apprehension of bias in the mind of the arbitrator is a good ground for removal of the arbitrator under section 5 of the Act. The learned Judge, City Civil Court, had directed the parties to submit a list of three engineers willing to be appointed as arbitrator and if the parties express consensus one of the three from the list of the petitioner or from the list of the respondent would. be chosen and appointed as arbitrator and in case there is no consensus between the parties then from among six engineers to be mentioned by both the parties three each in a separate list one of them will be selected by draw o....
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.... reasonable man can be a ground for removal of the arbitrator. A predisposition to decide for or against one party, without proper regard to the true merits of the dispute is bias. There must be reasonable apprehension of that predisposition. The reasonable apprehension must be based on cogent materials. See the observations of Mustill and Boyd, Commercial Arbitration, 1982 Edition, page 214. Halsbury's Laws of England, Fourth Edition, Volume 2, para 551, page 282 describe that the test for bias is whether a reasonable intelligent man, fully appraised of all the circumstances, would feel a serious apprehension of bias. This Court in International Authority of lndia v. K.D. Bali and Anr., J.T. l9988 2 S.C. I held that there must be reasonabl....