124. The doctrine of bias as evolved in English and Indian law
emphasizes independence and impartiality in the process of
adjudication to inspire the confidence of the public in the adjudicatory
processes. Although Section 12 deals with the quality of independence
and impartiality inherent in the arbitrators, the provision’s emphasis
is to ensure an independent and impartial arbitral process.”
In Perkins Eastman (supra), the Hon’ble Apex Court held thus :-
…”20. We thus have two categories of cases. The first, similar to the
one dealt with in TRF Ltd. [TRF Ltd. v. EnergoEngg. Projects Ltd.,
(2017) 8 SCC 377 : (2017) 4 SCC (Civ) 72] where the Managing
Director himself is named as an arbitrator with an additional power to
appoint any other person as an arbitrator. In the second category, the
Managing Director is not to act as an arbitrator himself but is
empowered or authorised to appoint any other person of his choice or
discretion as an arbitrator. If, in the first category of cases, the
Managing Director was found incompetent, it was because of the
interest that he would be said to be having in the outcome or result of
the dispute. The element of invalidity would thus be directly relatable
to and arise from the interest that he would be having in such
outcome or decision. If that be the test, similar invalidity would always
arise and spring even in the second category of cases. If the interest
that he has in the outcome of the dispute, is taken to be the basis for
the possibility of bias, it will always be present irrespective of whether
the matter stands under the first or second category of cases. We are
conscious that if such deduction is drawn from the decision of this
Court in TRF Ltd. [TRF Ltd. v. EnergoEngg. Projects Ltd., (2017) 8
SCC 377 : (2017) 4 SCC (Civ) 72] , all cases having clauses similar to
that with which we are presently concerned, a party to the agreement
would be disentitled to make any appointment of an arbitrator on its
own and it would always be available to argue that a party or an
official or an authority having interest in the dispute would be
disentitled to make appointment of an arbitrator.