Quick Summary: The Madras High Court canceled an arbitration decision involving M/s. Muthu Construction and the Union of India because of bias claims. The case was about contract issues with Southern Railway.
M/s. Muthu Construction, based in Salem, Tamil Nadu, signed a contract with the Union of India through Southern Railway. The contract, dated February 6, 2019, included repair and maintenance work like painting and cleaning along railway tracks.
The argument started over how to measure "per track metre" for certain tasks. M/s. Muthu Construction said the measurements were done inconsistently, causing problems with payments.
"The Arbitral Tribunal found that the schedule could have been better written to avoid confusion."
The Arbitral Tribunal rejected M/s. Muthu Construction's claims, saying both parties had agreed to measure certain tasks by combining two tracks. This decision was questioned due to suspected bias and misunderstanding.
M/s. Muthu Construction claimed that the decision was unfair, going against Section 18 of the Arbitration and Conciliation Act, 1996. A member of the arbitration panel in a related case also mentioned bias, affecting the Tribunal's decision.
"Bias of even one member affects the decision of the whole Panel."
On January 20, 2026, Justice N. Anand Venkatesh ruled in favor of M/s. Muthu Construction, canceling the Tribunal's decision. The court stressed the need for fairness in arbitration.
The court ordered the Union of India to pay ₹1,50,000 to M/s. Muthu Construction.
This case shows how bias can affect legal decisions, making sure that justice is fair and clear.
