Bias among arbitrators undermines impartiality and can lead to annulment of the award under arbitration law.

ORDER :

N. Anand Venkatesh, J.

In this petition filed under Section 34 of the Arbitration and Conciliation Act, 1996 (for short, the Act), the petitioner assails the award dated 22.1.2022 passed by the Arbitral Tribunal.

2. Heard both.

3. The facts leading to filing of this case are as follows:

(i) The petitioner is a proprietary concern, which entered into a contract with the respondent titled as repairs to the existing dily changing corroded fittings over points and crossings/SEJs/bridges/ curves, boxing and tidying of ballast, painting of boards, etc. Two contracts were entered into namely SA/279 and SA/280. This case pertains to SA/279.

(ii) The petitioner participated in the tender that was floated by the respondent and was declared as the successful bidder, pursuant to which, they were awarded the contract. The letter of acceptance 28.11.2018 for a value of Rs.1,55,15,697/- was also issued.

(iii) The claims made by the petitioner before the Arbitral Tribunal pertained to earnest money deposit, security deposit, final bill amount and payment for the difference as per the unit of measurement of “track metre”. It was an admitted case that the only issue, which became the subject matter of adjudication before the Arbitral Tribunal, was with regard to the last component namely payment for the difference as per the unit of measurement of “track metre”

(iv) Ultimately, the Arbitral Tribunal came to the conclusion that the claim made by the petitioner under this head was found to be untenable and hence, it came to be rejected. Aggrieved by that, the above petition has been filed before this Court.

4. The learned counsel for the petitioner questioned the award mainly on two grounds and they are:

(a) that it is vitiated by bias, that it violates Section 18 of the Act and the principles of natural justice and that therefore, it is liable to be interfered under Section 34(2)(i)(b) of the Act; and

(b) that the interpretation given by the Arbitral Tribunal to deny the claim made by the petitioner suffers from patent illegality and hence, it is liable to be interfered under Section 34(2A) of the Act.

5. Per contra, the learned Senior Central Government Standing Counsel appearing for the respondent submitted that the dissenting note of one of the Arbitrators rendered in the other award in respect of the same parties cannot automatically result in attributing bias as against the unanimous award passed by the Arbitral Tribunal, that the Arbitral Tribunal has rightly interpreted the relevant clause in the agreement, that it is a possible view taken by the Arbitral Tribunal and that it cannot be interfered by this Court while exercising its jurisdiction under Section 34 of the Act.

6. This Court has carefully considered the submissions of the learned counsel on either side and perused the materials available on record and more particularly the impugned award.

7. This Court will first deal with the second issue raised with respect to the interpretation of the expression “per track metre” and test as to whether the view taken by the Arbitral Tribunal is a possible view.

8. The sum and substance of the contention raised on the side of the petitioner is that Schedule B in the agreement consisted of six categories of works, which used the expression “per track metre” as the unit of measurement. Except with respect to item Nos.1 and 2, for all the other items, the measurements were taken separately for each track whereas in so far as item Nos.1 and 2 were concerned, they were treated differently and the measurements were recorded by clubbing two tracks (up and down) and it has been questioned by the petitioner on the ground that these two items could not be treated/ measured differently especially when the unit of measurement was one and the same.

9. For proper appreciation, item Nos.1 and 2 in Schedule B are extracted as hereunder: