A mere professional relationship with a party does not establish arbitrator bias absent concrete circumstances.

The Petitioner, M/S Lanco-Rani (JV), entered into a contract with the National Highways Authority of India (“NHAI”) dated 30 August 2001 for four-laning a section of NH-31 in Bihar.

Disputes arising from the contract were referred to arbitration, and the arbitral tribunal was constituted before 23 October 2015.

The tribunal delivered a majority award dated 7 June 2008.

In its petition under Section 34 of the Arbitration and Conciliation Act, 1996, the Petitioner confined its challenge to alleged bias on the part of the tribunal.

The Petitioner subsequently filed I.A. No. 20791/2017, seeking permission to raise the bias contention as an additional ground.

It alleged that Dr. C.S. Suryawanshi, NHAI’s nominee arbitrator, was employed by Consulting Engineering Services (India) Pvt. Ltd. (“CES”), which had an ongoing professional and commercial relationship with NHAI and had acted as consultant or engineer on other highway projects.

The Petitioner contended that it was unaware of this relationship when the arbitrator was appointed and that the alleged non-disclosure created a justifiable apprehension of bias.

Whether the Petitioner established a justifiable apprehension of bias or partiality sufficient to invalidate the majority arbitral award under Section 34 of the Arbitration and Conciliation Act, 1996?

Whether the arbitrator’s association with CES, and CES’s professional relationship with NHAI in other projects, constituted a disqualifying circumstance requiring disclosure or attracting the statutory grounds of ineligibility?

Whether the amended provisions of Sections 12 and 13, including the Seventh Schedule, applied to the arbitral proceedings?

Since the arbitration was invoked and the tribunal constituted before 23 October 2015, the unamended Sections 12 and 13 of the Arbitration and Conciliation Act, 1996, applied.

Under the pre-amendment law, the mere fact that an arbitrator was an employee or nominee of one party did not, by itself, establish bias; there had to be specific circumstances giving rise to a justifiable apprehension of bias.

Relying on Indian Oil Corporation Ltd. v. Raja Transport (P) Ltd., (2009) 8 SCC 520, and Aravali Power Co. Pvt. Ltd. v. Era Infra Engineering Ltd., (2017) 15 SCC 32, the Court held that concrete circumstances—such as the arbitrator’s involvement in the contract, status as the controlling or dealing authority, or direct subordination to the decision-maker—were necessary to establish an apprehension of bias.

Non-disclosure did not automatically invalidate an award; the undisclosed circumstance had to independently give rise to justifiable doubts regarding the arbitrator’s independence or impartiality.

The Seventh Schedule disqualifications were therefore not applicable to the present proceedings.

The Court held that the Petitioner had shown only that Dr. Suryawanshi was associated with CES and that CES had a professional relationship with NHAI in other projects.

The Petitioner accepted that CES was not the engineer or consultant for the particular project in dispute.

No material demonstrated that Dr. Suryawanshi had any involvement in the contract, acted under the control of the NHAI officers who made the relevant decisions, or possessed a direct disqualifying interest.

The Court further found no evidence that the majority members were improperly influenced by NHAI or that the award resulted from any disqualifying interest.

The fact that an arbitrator had previously been appointed in another NHAI project, without additional concrete circumstances, could not establish actual or apparent bias.

A belated and unsupported suspicion, particularly based merely on dissatisfaction with the award, was insufficient to warrant interference under Section 34.

The alleged association of the arbitrator with CES and CES’s relationship with NHAI did not establish actual bias, apparent bias, or a justifiable apprehension of bias, nor did it attract the Seventh Schedule disqualifications.

The Petitioner failed to establish any ground under Section 34 of the Arbitration and Conciliation Act, 1996, warranting interference with the majority award dated 7 June 2008.

The petition was accordingly dismissed, along with all pending applications.