Holding

There was no reasonable apprehension of bias; the arbitrator’s authority could not be revoked.

Summary

The International Airport Authority of India (IAAI) entered into a construction contract that contained an arbitration clause. When disputes arose, the Chief Engineer appointed K.D. Bali as sole arbitrator under the Arbitration Act, 1940. IAAI later challenged the arbitrator’s authority, alleging bias and seeking revocation under sections 5 and 11 of the Act, citing irregularities such as failure to record minutes, refusal to state a special case, venue change, and refusal to bear travel costs. The High Court of Bombay rejected the revocation application, and IAAI appealed to the Supreme Court. The Supreme Court held that the alleged grounds did not amount to a reasonable apprehension of bias; the standard requires a real likelihood of bias, not mere suspicion, and none of the petitioner's contentions satisfied this test. Consequently, the petition for special leave was dismissed and the arbitrator’s authority upheld.

Issues considered

Whether a party may obtain revocation of an arbitrator’s authority on the ground of apprehended bias under the Arbitration Act, 1940.
Whether the specific allegations raised by the petitioner constitute a reasonable apprehension of bias sufficient to disqualify the arbitrator.

Legislation cited

Arbitration Act, 1940s. 11, s. 13(b), s. 33, s. 5

Subjects

arbitrationbiasarbitrator removalArbitration Act 1940special leavejurisdictionpreliminary objectionsrevocation of authority

Judgment

INTERNATIONAL AIRPORT AUTHORITY OF INDIA
'1·
A
v.
K.D. BALI & ANOTHER

MARCH 29, 1988

B ISABYASACHI MUKHARJI AND S. RANGANATHAN, JJ.]

Arbitration Act, 1940-Whether a party to arbitration proceedings ""
can seek revocation of authority of the arbitrator appointed under sec-
tions 5 and 11-0f-on apprehension in the mind of such a party about
bias of the arbitrator-Determination of the question.
c 'y
This petition for special leave was against the judgment and order
of the High Court of Bombay, rejecting the application for revocation of ~ .,
the authority of the respondent No. 1, the sole arbitrator under sections
S and 11 of the Arbitration Act, 1940 ('The Act').

D The petitioner invited tenders for the construction of the terminal
building of a new international passenger complex (Phase II) at the
Bombay Airport. The respondent No. 2, a partnership firm, submitted v
a tender which was accepted and a formal agreement followed, with a
provision in the agreement for settlement of disputes through a sole
arbitrator appointed under clause 25 of the conditions of contract by )..
E the competent authority.

Certain disputes arose in which the petitioner sought claims
amounting to Rs.SS lakhs. The respondent No. 2-the contractor-
approached the petitioner to refer the disputes to arbitration. The Chief
Engineer of the petitioner appointed respondent No. 1 as the arbitrator
F and made a reference with regard to the. claim of Rs.SS lakhs. The
respondent No. 2 asked the Chief Engineer to refer further disputes to
.:}
the arbitrator and, accordingly, on 16th May, 19S6, a second reference
was made with regard to 11 further points of dispute with claims
amounting to Rs.t.17 crores. On 23rd December, 19S6, the Chief
Engineer made reference No. 3 to the Arbitrqtor with regard to claim
G amounting to Rs.S.Sl crore. Thereafter, by applications of 8th and 9th
June, 1987, the petitioner expressed objections to the references Nos. 2
and 3 made by the Chief Engineer contending that the references were ~·
null and void, being irregularly made, and took preliminary objections
before the arbitrator to the arbitration proceedings, being lack of
jurisdiction of the arbitrator on the ground that he was not validly
H appointed so far as references Nos. 2 and 3 were concerned. On 7th
370
INTERNATIONAL AIRPORT AUTHORITY v. K.D. BALI 371

August, 1987, the petitioner made an application before the arbitrator A
under section 13(b) of the Act with the request to state the matter before
him for the opinion of the Court as special case.

The arbitrator by his order dt. 3rd October, 1987, rejected the
said application and the preliminary objections of the petitioner. There-
after, the petitioner alleging that th.e arbitrator had formed his own B
opinion regarding the matters in issue, filed an appliction before the
High Court for the revocation of the authority of the arbitrator on the
• ground of apprehension in the petitioner's mind aboot bias of the
arbitrator. The High Court by its judgment and order dt. 2Ld
February, 1988, rejected the application of the petitioner. The
petitioner then moved this Court for relief by special leave.
c
Dismissing the petitionfor special leave, the Court,

HELD: It was necessary to reiterate first what are the paramet-
ers by which an appointed arbitrator can be removed on the appliction
of a party. It is well-settled that there must be purity in the administra- D
lion of justice as well as quasi-justice involved in the adjudicatory pro-
cess before the arbitrator. Once the arbitrator enters on an arbitration,
he 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 a 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 E
enough to show that even if there was misconduct on his part, the award
was unaffected by it and was io reality just; the arbitrator must not do
anything which is not io itself fair and impartial. In the words of Lord
O'Brien, L.C. J, there must be a real likelihood of bias and not a mere
suspicion of bias before proceedings can be quashed on the ground that
the person conducting the proceedings is disqualified by ioterest. The F
purity of administration requires that the party to the proceedings
should not have apprehension that the authority is biased and is likely
to decide against the party, but it is equally true that it is not every
suspicion felt by a party which must lead to the conclusion that the
authority hearing the proceedings is biased, as held by the High Court.
The apprehension must be judged from a healthy, reasonable and aver- G
age point of view and not on a mere apprehension of any whimsical
person. It cannot be and should never be in a judicial or quasi-judicial
proceeding that a party who is a party to the appointment could seek the
removal of an appointed authority or an arbitrator on the ground that
the appointee being his nominee had not acceded to his prayer about
conduct of the proceedings. It is the reasonableness and apprehension H
372 SUPREME COURT REPORTS [1988] 3 S.C.R.

of an average honest man that must be taken note of. There was no
"f·
A
substance found in the alleged grounds of apprehension of bias,
examined in this light. [378D-G; 379D-H; 380A-B]

The High Court had examined five circumstances advanced
before it. The first was that the arbitrator did not record the minutes of
B the meetings after September 29, 1987. The petitioner insisted that the
:j.
arbitrator should record the minutes setting out the entire oral argu-
men ts advanced on hehalf of the petitioner. This was not a reasonable /
request and the arbitrator rightly declined to do that. This was no basis
of any reasonable apprehension of bias. [380C-E] -
c raisedThe next circumstance urged was that the preliminary objections ~
by the petitioner were rejected without a speaking order. It was
not necessary for the arbitrator to record a long reasoned order on the
r\

preliminary objections, and indeed the law does not demand writing
such a long order. In any case, it would be open to the petitioner to file a
petition under section 33 of the Act if the petitioner felt that the
D arbitrator had no jurisdiction to entertain the reference. It would be
open to the petitioner to challenge the award to be declared by the
arbitrator, including on ground of jurisdiction. [380E-H]

The third circumstance was that the petitioner had filed an appli-
cation under section l3(h) of the Act calling upon the arbitrator to state );.
E a special case for the opinion of the Court and the failure of the
arbitrator to raise the question of law was indicative of bias. This argu-
ment could not be accepted. Section 13(b) confers power on the
arbitrator to state a special case but it does not make it obligatory on the
part of the arbitrator to state a special case as soon as the party desires
it. In this case, the petitioner itself agitated the issue of jurisdiction and
F other questions of law before the arbitrator. Once having done so, it
was not proper for the petitioner to ask the arbitrator to state a special
case. This was no ground for bias. [381A-CI
>
The fourth ground was that the first reference, involving a claim
for Rs.85 lakhs, was heard for a considerable time, while the arguments
G in respect of the second and third references covering claims ofRs.l.17
crores and Rs.S.81 crores were concluded by the respondent No. 2 )....
within one and one-fourth of a day. The length of the time taken is no
indication of either speeding up or any abuse of the proceedings. The
Court agreed with the High Court that there is no rule which requires
that the length. of the argiJment should depend upon the magnitude of
H the claim made. [38ID]
'
INfERNATIONALAIRPORT AUTHORITY v. K.D. BALI 373
~
The other point urged by the petitioner was that the venue of A
arbitration was changed and this change was without the consent of the
pe!ilk··>er. Change of venue would in no manner indicate that the
ar!::itra:Gr was !lrejudiced against the petitioner. This was solely a
fallacious ground to make out a case of alleged bias. (38 IE-GI
B
~ The other ground was that as, since 9th June, 1987; the petitioner
had not paid for the air-ticket of the arbitrator from Delhi to Bombay
and for his residential accommodation, the respondent No. 2 must be
providing for the air-ticket and the hotel accommodation for the
arbitrator, ·and the arbitration was likely to be biased. As rightly

~
f pointed out by the High Court, the petitioner, after the 9th June, 1987,
seemed to have decided that the arbitrator should not proceed with the
rererence and in order to frustrate the arbitration proceedings, started
c
raising all sorts of frivolous and unsustainable contentions. Having
realised that the arbitrator was not willing to submit to its dictates, the
petitioner declined to contribute for the air-ticket, etc. No party should
be allowed to throw out the arbitration proceedings by such tactics, and
D
IC the arbitrator did not surrender to the pressure, he could not be
faulted nor could the proceedings or the arbitrator be allowed to be
defeated by such a method. (38!G-H; 382B-DI

Another ground made was that there was a loss or confidence.
There was no reasonable ground for snch a loss or confidence. Every
E
fancy or a party cannot be a ground for removal of the arbitrator. (382D I
\

The Court was in agreement with the learned Judge of the High
Court expressing unhappiness over the manner in which attempts had
been made to delay the proceedings. l382G I
4 \
The Court found no ground to conclude that there could be any
ground for reasonable apprehension in the mind or the petitioner for
F

revocation of the authority of the arbitrator appointed by the.petitioner
itself. While endorsing and fully maintaining the integrity or the princi-
pie 'justice should not only be done, but should manifestly be seen to be
done', it is important to remember that the principle shonld not be led
G
to the erroneous impression that justice should appear to be done than
it should in fact be done. There was no reasonable ground of any suspi-
don of bias ofthe arbitrator. The conduct orthe arbitrator did not fall
within the examples given and principles enunciated in the instances of
cases where bias could be found in the Commercial Arbitration by '
Mustill and Boyd, 1982, Edn. l383A-CI H
374 SUPREME COURT REPORTS I1988] 3 S.C.R.
'j·
Russell on Arbitration, 18th Edition, page 378, Re Brion. and
A
Brien, [1910] 2 I.R. 83, 89; The King (De Vesci) v. The Justices of
Queen's Country, [1908] 2 I.R. 285; The Queen v. Rand & Ors., [1986]
1 Q.B. 230; Ramnath v. Collector, Darbhanga, ILR 34 Pat. 254; The
Queen v. Meyer and Ors., [1875] 1 Q.B. 173; Ekersley and Ors. v. The
Messey Docks and Harbour Board, [1894] 2 Q.B. 667; Gallapalli
B Nageswara Rao v. The State of Andhra Pradesh, [1960[ 1 SCR 580;
Mineral Development Ltd. v. State of Bihar, [1960] 2 SCR 6!19; Ranjit ~
Thakur v. Union of India & Ors., A.I.R. 1987 SC 2386 and R. V.
Camborne Justices Ex parte Pearce, [1954] 2 All. E.R. 850, 855 refer-
red to.

c CIVIL APPELLAIB JURISDICTION: Special Leave Petition
(Civil) No. 2545 of 1988.

From the Judgment and Order dated 2.2.1988 of the Bombay
r·
High Court in Arbitration Petition No. 234 of 1987.

D G. Ramaswamy, Additional Solicitor General, K.V. Kiili, S.
Bharthari and P.H. Parekh for the Petitioner.

K.S. Cooper, D. Karkali, R. Karanjawala and Mrs. M. Karan·
jawala for the Respondents.
').v·
E The Judgment of the Court was delivered by

SABYASACHI MUKHARJI, J. After hearing the parties fully
we had by our order dated 10th March, 1988 dismissed the special
leave petition under Article 136 of the Constitution. We stated therein
that we would indicate the reasons by a separate judgment later. We
F do so by this judgment. ~
This is a petition for leave to appeal under Article 136 of tl)e
Constitution from the judgment and order of the learned Judge of the
High Court of Bombay dated 2nd February, 1988. By the impugned
judgment the learned Judge has rejected the application for revocation
G of the authority of respondent No. l, Shri K.D. Bali, sole arbitrator
under sections 5 and 11 of the Arbitration Act, 1940 (hereinafter cal-
)....
led '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 inter-
H national passenger complex (Phase II) at the Bombay Airport at
\

IN1ERNATIONAL AIRPORT AUTIIORITY v_ K.D. BALI [MUKHARJI, J_] 375
-~
' Sahar, Bombay. Respondent No. 2, M/s. Mohinder Singh and Com-
A
pany, 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 agree-
ment for the present purposes. It may be reiterated, however, that
there was provision in the agreement for settlement of disputes B
through appointment of sole arbitrator under clause 25 of the Condi-
tions of Contract by the competent authority. Certain disputes arose in
which the petitioner sought claims amounting to Rs.85 lakhs. Respon-
dent No. 2 contractor approached the petitioner by letter dated 22nd
February, 1985 to refer the disputes with regard to claims amounting
to Rs.85 lakhs to the arbitration. One Shri K.K. Sud, the Chief
Engineer of the petitioner by his letter appointed respondent No. 1 as
c
the arbitrator and made the reference with regard to the claim of Rs.
85 lakhs on 23rd February, 1985. On 8th March, 1985, it appears from
the narration of the events in the judgment impugned that the
arbitrator gave directions to the parties regarding submission of plead-
ings. Respondent No. 2 filed pleadings within time, but the petitioner D
filed its pleadings after a delay of two and a half months. On 17th
March, 1986 respondent No. 2 addressed a letter to the Chief Engineer
asking for reference of further disputes to the arbitration and accord-
ingly on 16th May, 1986 a. second reference was made referring 11
further points of dispute. A third reference was sought by respondent
No. 2 on 22nd May, 1986 in respect of seven more claims but the E
petitioner informed on June 12, 1986 that the third reference was

- premature. It appears that in respect of the second and third refer-
ences the assertion of the petitioner was that these disputes were not
referable to the arbitrator. The arbitrator had directed the parties to
submit their statements in respect of second reference and though
respondent No. 2 submitted its claim within the stipulated period, the F
petitioner had again delayed doing so according to the learned Judge
and according to the assertions of respondent No. 2 for a period of
three months. On 16th May, 1986 the Chief Engineer made reference
No. 2 with regard to claims amounting to Rs.1.17 crores to the
arbitrator. On 23rd December, 1986 the Chief Engineer of the
petitioner made another reference being reference No. 3 to the G
arbitrator with regard to claims amounting to Rs.5.81 crore. The
petitioner by its applications of 8th and 9th June, 1987 expressed its
objections to the references Nos. 2 and 3 made by the Chief Engineer
as according to the petitioner the said references were null and void as
these were irregularly made. On 26th June, _1987 the petitioner by its
written submissions took preliminary objection before the arbitrator H
376 SUPREME COURT REPORTS [1988] 3 S.C.R.

A to the said arbitration proceedings, being Jack of jurisdiction of the
arbitrator 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 cor-
rectly. The petitioner by its application on 15th of June, 1987
B
requested respondent No. 1 not to proceed with the arbitration pro-
ceedings 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 prelimi-
nary objections. Respondent No. 1 directed the petitioner to submit
c the rest of its submission by way of written submissions. The petitioner
by its appli~ations 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
0 that further proceedings would be undertaken only after the extension
of time. Respondent No. 2 applied for enlargement of time and the
same was granted by the High Court. On 7th August, 1987 application
under section 13{b) of the Act was made before the arbitrator with a
request to state the matter before it as Special Case for the opinion of
the Court.
E

The arbitrator by his order dated 3rd October, 1987 rejected the
said application of the petitioner and also rejected the preliininary
objections of the petitioner at the same time. On 14th October, 1987
the petitioner by its Jetter noted the fact that it has sent the minutes of
F the meeting with regard to the proceedings held on 28th and 29th
September, 1987 to the arbitrator as directed by him. In the said Jetter
the petitioner also protested against the arbitrator's decision of chang-
ing the venue of the proceedings and also the inconvenient dates being
fixed by him. The petitioner by its letter dated 11th October, 1987
conveyed its concern to the arbitrator that he has been rushing through
G the proceedings. On 16th December, 1987 the petitioner alleging ap"
prehension that respondent No. 1 had formed his own opinion regard-
ing the matters in issue. The petitioner approached the High Col!rt
with the instant application. This application was rejected by the High
Court. The learned Judge changed the date fixed for hearing of the
application for extension of time by enlarging the time to make the
H award by 15th February, 1988.
INTERNATIONAL AIRPORT AUTIIORTIY v. K.D. BALI [MUKHARJI, J.J 377
w I The main contention for the revocation of the authority of the
A
arbitrator was about the alleged apprehension in the mind of the
petitioner about bias of the sole arbitrator. The learned Judge of the
High Court was unable to accept any ground for alleged apprehension.
It is apparent as the learned Judge noted that respondent No. 2 had
complied with the directions of the arbitrator about the conduct of the
}.. proceedings but the petitioner went on seeking adjournments after B
adjournments. Respondent No. 2 complained to the arbitrator on 4th
May, 1987 about the delaying tactics adopted by the petitioner and
thereupon the arbitrator directed that the hearing would take place on
8th and 9th June, 1987 and no further adjournment would be granted.
After this direction was given by the arbitrator, the petitioner addres·
~- sed a letter dated 25th May, 1987 to the arbitrator objecting to the
. 'i jurisdiction in respect of the second and third references. The objec- c
,, I lions to the jurisdiction raised by the petitioner were, that the .claim
made in th<i 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 D
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 E
written submissions further oral arguments were advanced and there·

- after 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 andagain the
' petitioner's advocate argued on preliminary objections about jurisdic·
.( tion. The.arguments were advanced on the next adjourned dates, that F
is, June 26 and June 27, 1987. It further appeared that as the time for
making the award had expired and the petitioner did not consent to the
extension of time, respondent No. 2 filed petition to the High Court of
Bombay for extension of time on June 21, 1987. Thereafter the
petitioner made an application before the arbitrator under section
13(b) of the Act calling upon the arbitrator to state special case for the G
opinion of the High Court on certain alleged legal objections. In the
~. meanwhile the petition for extension of time filed in the Bombay High
Court was granted and the time for declaring the award was extended
till January 15, 1988. Thereafter the arbitrator fixed the hearing on
September 28, 1987 and the advocate for the petitioner again reitera·
ted the preliminary objections to the jurisdiction of the arbitrator and H
•

378 SUPREME COURT REPORTS [19881 3 S.C.R.

A insisted upon the arbitrator, passing an order on the application under
section 13(b) of the Act: The arbitrator rejected the preliminary objec-
tions by his order dated 3rd October, 1987 and also the application for
stating special case to the High Court under section 13(b) of the Act.
The. Petitioner's advocate thereupon sought adjournment of the hear-
ing and accordingly hearing was adjourned on several dates. Ultima-
B tely, the· arbitrator fixed the hearings on 30th October, 1987 and 31st
October, 1987. The hearing was postponed to 2nd November, 1987
and on that day the petitioner's advocate remained absent. Thereafter
the hearing proceeded on 6th November and 11th November, 1987 as
well as on 13th, 18th and 19th November, 1987. Respondent No. 2
concluded arguments, while the arguments on behalf of the petitioner
-
c were advanced on December 3, 1987. The arguments further pro- .>.---
ceeded on December 8 and 9, 1987. Thereafter on December 17, 1987 r\
the present petition was filed for revocation of the appointment of
respondent No. 1 as the sole arbitrator. In our opinion, the above
narration gives a glimpse how a party can try to prolong a proceeding.

D Several points were taken in support of the application for revo-
cation. It was sought to be urged that the petitioner had lost confi-
dence in the sole arbitrator and was apprehensive that the arbitrator
was biased against the petitioner. It is necessary to reiterate before
proceeding further what are the parameters by which an appointed
arbitrator on the application of a party can be removed. It is well
E settled that there 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 unfair-
-
ness. It is not a question of the effect which misconduct on bis part had
F 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
G 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
H there was a real likelihood of bias. I do not think that their
INTERNATIONAL AIRPORT AUTHORITY v. K.D. BALI [MUKHARJI, J.J 379

vague suspicions of whimsical capricious and unreasonable
A
people should be made a standard to regulate our action
here. It might be a different matter if suspicion rested on
reasonable grounds was reasonably generated and but cer-
tainly mere flimsy grounds elusively generated and .morbid
suspicions should not be permitted to form a ground of
decision." B

(Emphasis supplied)

See The Queen v. Rand and others, {1866] 1 Q.B. 230; Ramnath v.
Collector, Darbhanga, I.L.R. 34 Pat. 254; The Queen v. Meyer and
others, [1875] 1 Q.B. 173 and Eckersley and others v. The Mersey
Docks and Harbour Board, {1894] 2 Q.B. 667. c
In the words of Lord O'Brien, LCJ there must be a real likeli-
hood of bias. It is well settled that there must be a real likelihood. of
bias and not mere suspicion of bias before the proceedings can be
quashed on the ground that the person conducting the proceedings is D
disqualified by interest. See in this connection Gullapalli Nagesw(lra
Rao v. The State of Andhra Pradesh, [1960] 1 SCR 580 and Mineral
Development Ltd. v. State of Bihar, {1960 I 2 SCR 609. Recently this
Court in a slightly different context in Ranjit Thakur v. Union of India
and Nhers, A.LR. 1987 S.C. 2386 had occasion. to consider the test of
bias of the Judge. But there must be reasonableness of the apprehen- E
sion of bias in the mind of the party. The purity of administration
requires that the party to the proceedings should not have apprehen-
sion that the authority is biased .and is likely to decide against the
party. But we agree with the learned Judge of the High Court that it is
equally true that it is not every suspicion felt by a party which must
lead to the conclusion that the authority hearing the proceedings is f
biased. The apprehension must be judged from a healthy, reasonable
and average pofut of view and not on mere apprehension of any
whimsical person. While on this point we reiterate that learned
counsel appearing for the petitioner in his submissions made a strong
plea that his client was hurt and had apprehension because the
arbitrator being the appointee of his client was not acceding to the G
request of his client which the petitioner considered to be reasonable.
We have heard this submission with certain amount of discomfiture
because it cannot be and we hope it should never be in a judicial or a
quasi-judicial proceeding a party who is a party to the appointment
could seek the removal of an appointed authority or arbitrator on the
ground that appointee being his nominee had not acceded to his H
380 SUPREME COURT REPORTS . I1988] 3 S.C.R.
e
A prayer about the conduct of the proceeding. It will be a sad day in the t
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 reasonable-
ness lllld the apprehension of an average honest man that must be
B 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 bad examined the five. circumstances
advanced before him. The first was that the arbitrator did not record
C the minutes of the meetings after September 29, 1987. The learned \---,
Judge found that there was no merit in this complaint. After 29th r
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
0 the arbitrator did not object to the same. In spite of it, the petitioner
insisted that the arbitrator should record the minutes setting out the
entire oral arguments advanced on behalf of the petitioner. This in our
opinion was not a reasonable request to make and the arbitrator had
rightly declined to do so. This is no basis of any reasonable apprehen-
sion of bias.
E
The next circumstance urged was that the preliminary objec-
tions raised by the petitioner were rejected without a speaking order.
It was not necessary for the arbitrator to record a long reasoned order
on the preliminary objections and indeed the law does not demand
. writing such a Jong order. In any case, it will be open to the petitioner
F to file any petition in the Court under section 33 of the Act, if the
petitioner felt that the arbitrator had no jurisdiction to entertain the
reference, but the petitioner did not choose to adopt that course and
proceeded to argue for a considerable length of time, the issue of
jurisdiction before the arbitrator. The arbitrator was not bound to give
a reasoned order at every stage of the proceedings. The arbitration
G proceedings would then never come to an end. It was not in dispute
that the terms of reference required the arbitrator to give reasons for
the award to be declared. It would be, therefore, always open for the
petitioner to challenge the award to be declared by the arbitrator
including on the ground of jurisdiction. The learned Single Judge of
the High Court has so held and we are in agreement with him on this
H point.
IN1ERNATIONAL AIRPORT AUTIIORITY v. K.D. BALI [MUKHARJI, J.[ 381

The third circumstances was that the petitioner had filed applica-
A
tion under section 13(b) of the Act calling upon the arbitrator to state
a special case for the opinion of the Court on the question of law and
the failure of the arbitrator to raise this question of law was indicative
of the bias. We are unable to accept this argument. Section 13(b)
confers power on the arbitrator to state special case but it does not
make it obligatory on the part of the arbitrator to state a special case as B
~·. soon as the party desires to do so. In the instant case the petitioner
itself agitated issue of jurisdiction before the arbitrator and by its

-
ii
conduct submitted the question of jurisdiction and other questions of
law for determination of the arbitrator. Once having done so, it was
not proper for the petitioner to ask the arbitrator tci state a special
case. This, in our opinion, is no ground for bias.
c
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 D
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 E
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 F
room at Santacruz and this fact was known to the petitioner all along.
Change of venue in no manner would indicate that the arbitrator was
,_ prejudiced against the petitioner and no prayer was made to the
arbitrator not to change the venue. This is solely a fallacious ground to
make out a case of alleged bias. The other ground was that the
petitioner and respondent No. 2 used to share the costs of the air ticket G
of the arbitrator from Delhi to Bombay and back. It was submitted
that since 9th June, 1987 the petitioner has not paid for the ticket and
also not provided for residential accommodation at Santacruz Airport.
It was further submitted that respondent No. 2 must be providing the
air-ticket and also hotel accommodation to the arbitrator and the
receipt of these facilities was enough, according to the petitioner, to H
382 SUPREME COURT REPORTS [ 1988) 3 S.C.R.

A establish that the arbitration was likely to be biased. It is said that.the
petitioner made these allegations because the petitioner declined to
contribute for the costs of the air-ticket and providing for the accom-
modation. The petitioner obstructed at all stages of the proceedings of
arbitration, what the arbitrator did he did openly to the knowledge of
the respondents. As the learned Judge has rightly pointed out the
B petitioner after 9th June, 1987 seems to have decided that the
arbitrator should not proceed to hear the reference and in order to
frustrate the arbitration proceedings started raising all sorts of frivol-
ous and unsnstainable contentions. Having failed and realised that
respondent No. 1 was not willing to submit to the dictates of the
petitioner, the petitioner declined to contribute for the air-ticket and
-
C providing for accommodation. No party should be allowed to throw
out the arbitration proceeding by such tactics and if the arbitrator has
not surrendered to pressure in our opinion, the arbitrator cannot be
faulted on that score nor the proceedings of the arbitrator be allowed
to be defeated by such method,

D There was another ground sought to be made before us that
there was a loss of confidence. We find no reasonable ground for such
loss of confidence. Every fancy of a party cannot be a ground for
removal of the arbitrator. It was alleged that there were counter claims
made by the respondents. These counter claims have not yet been
dealt with by the arbitrator. Our attention 'was drawn to page 188 of
E Volume .II of the paper book where a counter claim had been referred
to. It appears that the petitioner has separately treated these counter
claims. These counter claims have not yet been considered by the
arbitrator. That is no ground for any apprehension of bias. An af-
fidavit was filed before us that on 6th March, 1988 a letter was served
indicating the dates for hearing as 7th to 10th March, 1988.
F
It appears that the matter was adjourned thereafter but by.
merely making an application for adjournment and refusing to attend
the arbitration proceeding, a party cannot forestall arbitration pro-
ceeding.

G We are in agreement with the learned Judge of the High Court
expressing unhappiness as to the manner in which attempts had been
made to delay the proceeding. There is a great deal of legitimate
protest at the delay in judicial and quasi-judicial proceeding. As a
matter of fact delay in litigation in courts has reached such proportion
that people are losing faith in the adjudicatory process. Having given
H our anxious consideration to the grounds alleged in this application,
INTERNATIONAL AIRPORT AUTHORITY v. K.D. BALI [MUKHARJI, J.] 383

we find no .ground to conclude that there could be any ground for A
reasonable apprehension in the mind of the petitioner for revocation
- of the authority of the arbitrator appointed by the petitioner itseH.
While endorsing and fully maintaining the integrity of the principle
'justice should not only be done, but should manifestly be seen to be
.' done', it is important to remember that the principle should not be Jed
to the erroneous impression that justice should appear to be done that B
-~. it should in fact be done. See the observations of Slade, J. in R. v.
Cambore Justices Ex pane Pearce, 11954) 2 All. E.R. 850 at 855. We
I. are satisfied from the facts mentioned hereinbefore that there is no
- reasonable ground of any suspicion in the mind of the reasonable man
of bias of the arbitrator. Instances of cases where bias can be found in
Commercial Arbitration by Mustill and Boyd, 1982 Edn. The conduct
of the present arbitrator does not fall within the examples given and c
the principles enunciated therein.

The petition for leave to appeal, therefore, fails and it is accord-
ingly dismissed.
D
S.L. Appeal dismissed.

-