Case Note & Summary
The dispute arose from arbitration proceedings initiated by the International Airport Authority of India (petitioner) against a contractor, M/s. Mohinder Singh and Company (respondent No. 2), regarding claims related to the construction of a terminal building at Bombay Airport. Following the acceptance of the contractor's tender, disputes emerged, leading to multiple references to the arbitrator, K.D. Bali (respondent No. 1). The petitioner raised objections regarding the arbitrator's authority and alleged bias, culminating in an application for revocation of the arbitrator's authority, which was rejected by the Bombay High Court. The petitioner subsequently sought special leave from the Supreme Court. The Supreme Court dismissed the petition, emphasizing that the grounds for bias must be substantial and not based on mere apprehension or whimsical concerns. The court found no reasonable basis for the petitioner's claims of bias, noting that the arbitrator's conduct did not indicate partiality. The court upheld the integrity of the arbitration process, stating that a party cannot seek removal of an arbitrator simply because the arbitrator did not accede to their requests. The decision reinforced the principle that justice must not only be done but also be seen to be done, while clarifying that mere suspicion is insufficient for revocation of an arbitrator's authority.
Headnote
A) Arbitration Law - Revocation of Arbitrator's Authority - Grounds for Removal - Arbitration Act, 1940, Sections 5, 11 - The court reiterated that an arbitrator can only be removed on substantial grounds of bias, not mere suspicion. The petitioner failed to demonstrate reasonable apprehension of bias, as the grounds presented were found to be frivolous and unsustainable (Paras 378-383).
Issue of Consideration
Whether a party to arbitration proceedings can seek revocation of the authority of the arbitrator appointed under sections 5 and 11 of the Arbitration Act, 1940 on grounds of apprehension of bias.
Final Decision
The Supreme Court dismissed the petition for special leave, affirming the High Court's decision that there were no reasonable grounds for apprehension of bias against the arbitrator.
Law Points
- Arbitration proceedings
- revocation of authority
- bias of arbitrator
- reasonable apprehension
- jurisdictional objections
