The Court has a discretion to refuse a stay of proceedings in a suit even if there is an arbitration clause, if it is shown that there is a reasonable prospect that the arbitrator will be biased or that it is not fitting or decorous for him to act as an arbitrator.

A.N.Grover, J.

1. This is an appeal against an order of the Senior Sub-Judge, Simla, refusing to stay a suit under the provisions of Section 34 of the Indian Arbitration Act.

2. The suit was filed by Jawahar Mal and Sons for recovery of Rs. 68,349/5/3 against the Punjab State for damages for breach of a contract which had been entered into for erection of a high level bridge over the Rangeelpur Naddi. The State moved the Court under the provisions of Section 34 of the Arbitration Act for stay of proceedings on the ground that there was an arbitration clause in the agreement and that the disputes between the parties had to be decided by arbitration. Various pleas were raised on which the following issues were framed :

1. Whether there is any valid agreement between the parties to refer the disputes arising between them to arbitration?

2. Whether Shri Walaya Ram was competent to enter into the said agreement on behalf of the plaintiff firm?

3. Has the Superintending Engineer, Ambala Circle, debarred himself from acting as an arbitrator by his conduct?

4. Relief.

It has been held by the Court on issue No. 1 that clause 25-A which related to the arbitration agreement had not been scored out as alleged by the plaintiff but was intact when the plaintiff submitted the tender and had been scored out after the tender had been accepted and was, therefore, binding on the parties. On issue No. 2 it was found that Walaya Ram had the authority to enter into an agreement relating to arbitration on behalf of the plaintiff-firm. On issue No. 3, however, the Court considered that the disputes had to be decided by Shri Bikramjeet, the Superintending Engineer, who had already ex-pressed his opinion on the merits of the case in a report submitted to the Government. In these circumstances, the Court considered that the plaintiff could have a legitimate impression that Shri Bikramjeet might not be able to form an independent view of the controversy between the parties. Following the observations made in Union of India V/s. M/s. Narayan Cold Storage Ltd., Amritsar, AIR 1958 Punj 24 and Bristol Corporation V/s. John Aird and Co., 1913 A.C. 241, the learned Judge decided that the dispute between the parties should not be referred to the arbitrator but should be decid-ed by the Court itself. The State is dissatisfied with the order and has come up to this Court in appeal.

3. The Deputy Advocate-General has invited my attention to the statement contained in the Law and Practice of Building Contracts by Keating at pages 188 and 189 which is as follows :

"Parties to an arbitration are normally entitled to an unbiased arbitrator with no interest in the result of the proceedings. Where the architect of a contract is appointed arbitrator for that contract he is interested to the extent that he is employed and paid by one of the parties to the dispute, and is probably further interested in that in his capacity as agent for the employer he may have given orders relating to the matter in dispute, or have already expressed a strong view on the subject, and may even be judge, so to speak, in his own quarrel.

Such interests have been held not to be sufficient in themselves to disqualify the architect from acting as arbitrator. It has been held that the contractor must show, if not that the architect is biased, that at least there is a probability that he would be biased. The basis of these decisions was that the court. ..ought to hold that nothing known at the lime of the contract, nothing fairly to be expected from the position of the engineer when he becomes arbitrator, can be alleged as a ground why it should not keep the parties to their bargain."

It is contended that in such contracts the engineer for the architect is the proper person who should decide the disputes arising between the contracting parties even if he is the employee of one of the parties. In Ives and Barker V/s. Willans, (1894) 2 Ch. 478, in which also the question was whether an ac-tio