A court may appoint a third-party arbitrator if the named arbitrator is biased or if the party has a reasonable apprehension of bias.

A. R. LAKSHMANAN, J.

This unsuccessful plaintiff is the appellant in this appeal. The appellant filed the suit under Section 20 of the Arbitration to file the original arbitration agreement into Court and to appoint a third party Arbitrator and make an order of reference of the dispute and claims to the said Arbitrator. The claim of the appellant to appoint a third party Arbitrator was rejected by the learned Single Judge of this Court by holding that the respondent has already named an Arbitrator and therefore, the appellant has to make a reference to him invoking the arbitration clause. Aggrieved by the same, the plaintiff has come on appeal before us

2. The short facts leading to the filing of the suit by the appellant are as follows : M/s. Neyveli Lignite Corporation Limited (hereinafter referred to as N.L.C.) awarded a contract in respect of L.S.H.S. (Low Sulphur Heavy Stock) Conversion Project to the respondent/Corporation who in turn invited tenders by issuing Tender Specification bearing No. SR/TSD/508 dated 24.3.1988. The appellant submitted its tender on 22.4.1988 and the same was accepted by the respondent. Thereupon, the appellant was awarded the contract by the issuance of the letter of Indent No. Sr/TSD/508 dated 27.6.1988. The contract awarded to the appellant was in general for the working relating to the supply, fabrication, erection testing and commissioning for the conversion of the existing furnace oil system to TSRS at N.L.C. Thermal Station I. According to the appellant, the Letter of Indent based on the abovesaid tender specification as well as the other contract documents referred to in the Letter of Indent formed the basis for both parties to operate the contract. The appellant accepted the Letter of Indent and commenced, executed and completed the job. The respondent has also paid several bills to the appellant. However, the respondent has not yet paid the entire bills even though the appellant has successfully completed the work long back

3. According to the appellant, several disputes and differences have arisen between the parties during the execution of the project. Under Clause 22(2) of Section E of the Tender Document, it was agreed upon by both the parties that all disputes, if case could not be settled amicably, shall be referred to the sole arbitration of the contracting company/respondent herein and persons designated by it. Though the appellant tried its best to settle all its dispute amicably, the same could not be settled. The appellant made several requests to the respondent to appoint an Arbitrator and refer all the dispute to him. Instead, after testing and commissioning of the project by the appellant, the General Manager of the respondent terminated the contract by his letter dated 27.11.1992 on false and erroneous grounds and without giving any prior notice to the appellant. Further, the respondent has invoked the bank guarantee furnished by the appellant long after the expiry of the warranty obligations, causing undue hardship to the appellant. The respondent has acted in a vindictive and biased manner on account of the appellant's persistent demand for the appointment of an Arbitrator. However, after a lapse of almost one year from the appellant's invocation of the arbitration clause, the respondent advised the appellant by their letter dated 11.5.1993 to refer the grievances to the sole arbitration of the Director (Marketing), Indian Oil Corporation, Bombay, and thereby named the Arbitrator specifically. This, according to the appellant, is presumably arising out of the corporate policy of the Indian Oil Corporation though not spelt out in the tender document

4. According to the appellant, the arbitration clause is vague and ambiguous inasmuch as not naming the Arbitrator, whereas, the respondent by their letter dated 11.5.1993 specifically identified a particular officer viz., Director (Marketing), Indian Oil Corporation, Bombay, as the sole Arbitrator. However, when the