The main legal point established in the judgment is the importance of impartiality and fairness of the arbitrator in arbitration proceedings, and the determination of bias and apprehension of bias based on legal principles.

( 1 ) BY virtue of the present petition, filed un sub-Section (2) to Section 8 read with Section 33 of the Arbitration Act, the applicant/petitioner (M/s. Mokha Light House) seeks appointment of a sole arbitrator and further to declare the term of the arbitration clause 48 to be illegal and void.

( 2 ) THE facts alleged are that the applicant had entered into a contract to perform certain acts for the benefits of India Tourism Development Corporation. Disputes arose between the parties, which directly related to performance of the obligation, which arose under the terms of the contract. The applicant had moved an application in this Court for appointment of the Arbitrator and on 22. 11. 1993 this court had directed the Chairman/managing Director to refer the dispute, which would be raised within 3 months to the sole arbitrator. Shri V. K. Gupta was appointed as the sole arbitrator, who died in the year 2001.

( 3 ) THE grievance of the applicant is that the managing Director of the respondent appointed Shri k. L. Sehgal as the sole arbitrator in place of Shri gupta. It is alleged that the applicant did not concur to the appointment of Shri K. L. Sehgal as the sole arbitrator and further that the appointment, as such, was not valid as the applicant had suggested the name of a former Judge of this Court.

( 4 ) IT is asserted that the appointment of Shri k. L. Sehgal is illegal and should be quashed and this court may appoint another arbitrator. It is contended that under clause 48 of the Contract, which provides for arbitration of disputes, directly relating to the terms of the contract, is unjustified and unreasonable. The arbitrator so appointed by the managing Director of the respondent can not be fair. Clause 48 is unfair and arbitrary and when the arbitrator had died, the Managing Director had no right to appoint another arbitrator.

( 5 ) AT the threshold, it was put to the learned counsel for the applicant as to how the present petition, as such, would be maintainable, taking the assertions and the allegations put forward by the applicant.

( 6 ) LEARNED counsel for the applicant, in the first instance, urged that when the sole arbitrator had died, thereupon the Managing Director or the Chief engineer of the respondent had no right to nominate another person. To appreciate the said argument, reference can well be made to Clause 48 of the contract between the parties, which has been reproduced by the applicant and it reads as under :

"the arbitrator to whom the matter is originally REFERRED TO being transferred or vacating his office or being unable to act for any reason, the "managing Director/chief engineer" shall appoint another person to act as Arbitrator in accordance with the terms of the Contract. Such person shall be entitled to proceed with the reference from the stage at which it was left by his predecessor. It is also a term of this Contract that no person other than a person appointed by the Managing director/chief Engineer, as aforesaid should act as an arbitrator and if for any reason, that is not possible, the matter is not to be referred TO to Arbitration at all. "

( 7 ) THE relevant extract shows that it was agreed between the parties that when the arbitrator vacates his office or is transferred or is unable to act for any reason, the Managing Director or Chief Engineer of the respondent could appoint another person as the sole arbitrator. The expression "unable to act for any reason" is pregnant with the meanings. If the matter was to end with the words unable to act the things would be different. Herein, the contract stipulates that if he is unable to act for any reason, the Chief Engineer/managing Director will have the right to appoint another arbitrator. "any reason" would include the death of arbitrator because in that event also the arbitrator is unable to act. In the present case in hand, the arbitrator has died and obviously he is unable to act because of the act of the god and in that vi