TaxTMI 
TaxTMI 
1988 (3) TMI 409
X X X X Extracts X X X X
X X X X Extracts X X X X
....ombay 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 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 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 a....
X X X X Extracts X X X X
X X X X Extracts X X X X
....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 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....
X X X X Extracts X X X X
X X X X Extracts X X X X
..... 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 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 a....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e 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 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 vag....
X X X X Extracts X X X X
X X X X Extracts X X X X
....removal of an appointed authority or arbitrator on the ground that appointee being his nominee had not acceded to his prayer about the conduct of the proceeding. It will be a sad 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 t....
X X X X Extracts X X X X
X X X X Extracts X X X X
....al 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 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 indica....