Judgment :- 1. This petition is filed under Section 11(6) of the Arbitration and Conciliation Act, 1996 (‘Act’ for short) for appointment of an independent Arbitrator to decide the dispute arising out of the Memorandum of Understanding dated 25.6.2008 and 1.2.2009 respectively. 2. M/s Kerala State Electronics Development Corporation Limited (KELTRON), represented by its General Manager is the petitioner. The contention of the petitioner is that the Bangalore Metropolitan Transport Corporation (‘BMTC’ for short), the respondent herein, invited tenders vide tender notification No.BMTC/208/002 dated 3.4.2008 for providing passenger information service based on online GPS system in Volvo buses operated by the respondent and at bus shelters of BMTC. The petitioner being a successful bidder and pursuant to the acceptance of the tender, entered into a Memorandum of Understanding (‘MOU’ for short) at Annexure ‘A’ dated 25.6.2008 for providing dynamic passenger information based on online GPS system inside 140 buses and at 80 bus stops to its commuters. It is contended that the BMTC was unable to provide 140 buses as agreed to under the MOU at Annexure ‘A’ and reduced the number of buses to 70 operating in Airport route. The petitioner agreed to the next offer of BMTC that it would provide 70 buses only for display of passenger information system on LCD panels, thereupon another MOU at Annexure ‘B’ dated 1.2.2009 was entered into between the parties. It is further contended that the respondent unilaterally further reduced the number of buses from 70 to 57 in which passenger information system on LCD panels are to be provided by the petitioner. The petitioner being the service provider under the MOUs paid a sum of Rs.1 crore 8 lakhs as security deposit, which is equivalent to three months license fee. It had invested a sum of Rs.8 crores. In view of the repeated change in version of the respondent and reduction of buses, it had sustained financial loss. Since there was serious lapse and breach committed by the respondent in performing its obligations, the MOUs dated 25.6.2008 and 1.2.2009 respectively were cancelled and the respondent was called upon the repay a sum of Rs.1 crore 8 lakhs deposited by it with the respondent towards security deposit with interest at 18% per annum vide notice at Annexure ‘C’ dated 16.1.2010. A notice at Annexure ‘E’ dated 15.2.2010 was issued by the respondent denying its liability to return the security deposit of Rs.1 crore 8 lakhs and further demanding a sum of Rs.50,23,410/-towards arrears of licence fee. The petitioner further contends that the MOUs referred to above provides for settlement of dispute by way of arbitration. The petitioner once again issued a notice at Annexure ‘K’ dated 27.7.2010 calling upon the respondent to appoint an Arbitrator in terms of clause 13 of the MOUs and another notice at Annexure ‘L’ dated 21.12.2010 to give consent for appointment of an Arbitration to resolve the disputes. However, the respondent did not give consent for referring the dispute to an Arbitrator but has threatened that it will file a dispute before the Managing Director of BMTC. Since the named Arbitrator in the two MOUs was the Managing Director of BMTC, the petitioner suggested for having the dispute arbitrated through an independent Arbitrator other than the Managing Director for the reason that BMTC being controlled by the State Government and the named Arbitrator would be bound by the decision of the majority of the Directors. The petitioner apprehends that it may not get justice if the matter is referred to the named Arbitrator. 3. Learned Counsel for the petitioner submits that the respondent has failed to perform its obligations under the aforesaid two MOUs. Since the named Arbitrator is none other than the Managing Director of the respondent, the petitioner may not get justice if he is permitted to decide the dispute. The named Arbitrator is a Government servant posted on deputation to the BMTC. He is bound by the directions issued by the State Government from time to time. The petitioner apprehends that the named Arbitrator may be biased in view of his position and interest in the respondent-BMTC. In this connection, he has relied on the decision of Apex Court in the case of INDIAN OIL CORPORATION LTD. & OTHERS VS. M/S RAJA TRANSPORT (P) LTD. – 2009 AIR SCW 7354. 4. On the other hand, learned Counsel appearing for the respondent submits that the petitioner has filed a dispute before the named Arbitrator under the two MOUs at Annexures ‘A’ and ‘B’ on 25.4.2011 itself. It is argued that the respondent is an instrumentality of the State. & OTHERS VS. M/S RAJA TRANSPORT (P) LTD. – 2009 AIR SCW 7354. 4. On the other hand, learned Counsel appearing for the respondent submits that the petitioner has filed a dispute before the named Arbitrator under the two MOUs at Annexures ‘A’ and ‘B’ on 25.4.2011 itself. It is argued that the respondent is an instrumentality of the State. The apprehension of the petitioner about the independence or impartiality of the Arbitrator is without any basis. The Managing Director of the BMTC is a Senior IAS Officer posted by the Government. Having regard to the express provisions contained in the MOUs, the dispute has been filed before the Managing Director of the respondent. Once a party has entered into an agreement with his eyes wide open, it cannot wriggle out of the situation by contending that if the Managing Director of the BMTC is appointed as an Arbitrator, he will not be impartial or objective. He prays for dismissal of the petition. 5. The Memorandum of Understandings at Annexures ‘A’ and ‘B’ contain a clause relating to settlement of disputes, which is as under: “Settlement of Disputes: In the event of any dispute arises between the parties with regard to any interpretation of this agreement or any dispute the same shall be referred to Managing Director, BMTC and the decision of Managing Director, BMTC will be final. The service provider shall undertake to abide by all the terms and conditions of the tender. In the matter of any disputes, the decision of the Managing director of BMTC is binding on all the Tenderers.” 6. It is well settled that the arbitration agreements in a Government contracts providing that an employee of the Department (usually a high official unconnected with the work or the contract) will be the Arbitrator, are neither void nor unenforceable. In UNION OF INDIA & ANOTHER VS. M.P.GUPTA – (2004) 10 SCC 504 , the Apex Court was considering a similar case whether the arbitration agreement provided for appointment of two Gazetted railway Officers as Arbitrators. A learned Single Judge of the High Court while allowing an application under Section 20 of the Arbitrator Act, 1940 appointed a retired Judge as the Sole Arbitrator and a Division Bench affirmed the same. A learned Single Judge of the High Court while allowing an application under Section 20 of the Arbitrator Act, 1940 appointed a retired Judge as the Sole Arbitrator and a Division Bench affirmed the same. Reversing the said decision, the Apex Court held that having regard to the express provision in the arbitration agreement that two Gazetted railway Officers shall be the Arbitrators, a retired Judge could not be appointed as Sole Arbitrator. 7. In ACE PIPELINE CONTRACTS PVT. LTD. VS. BHARAT PETROLEUM CORPORATION LIMITED – 2007 (5) SCC 304 , the Apex Court was considering a similar case under the new Act, which also provided that the arbitration will be by its Directors (Marketing) or some other officer nominated by the Director (Marketing). The contractor expressed an apprehension about the independence and impartiality of the named Arbitrator and prayed for appointment of a retired Judge as Arbitrator in his application under Section 11(6) of the Act. After considering the rival contentions of the parties, the Apex Court has held as under: “In the present case, in fact the appellant’s demand was to get some retired Judge of the Supreme Court to be appointed as Arbitrator on the ground that if any person nominated in the arbitration clause is appointed, then it may suffer from bias or the arbitrator may not be impartial or independent in taking decision. Once a party has entered into an agreement with eyes wide open it cannot wriggle out of the situation (by contending) that if any person of the respondent –BPCL is appointed as arbitration he will not be impartial or objective. However, if the appellant feels that the arbitrator has not acted independently or impartially, or he has suffered from any bias, it will always be open to the party to make an application under Section 34 of the Act to set aside the award on the ground that arbitrator acted with bias or malice in law or fact.” 8. Even in M/S INDIAN OIL CORPORATION LTD.’s case (supra), relied on by the learned Counsel for the petitioner, the Apex Court has held as under: “14. Even in M/S INDIAN OIL CORPORATION LTD.’s case (supra), relied on by the learned Counsel for the petitioner, the Apex Court has held as under: “14. There can, however, be a justifiable apprehension about the independence or impartiality of an Employee-Arbitrator, if such person was the controlling or dealing authority in regard to the subject contract or if he is a direct subordinate (as contrasted from an officer of an inferior rank in some other department) to the officer whose decision is the subject matter of the dispute. Where, however, the named arbitrator though a senior officer of the Government/statutory body/Government company, had nothing to do with execution of the subject contract, there can be no justification for anyone doubting his independence or impartiality, in the absence of any specific evidence. Therefore, senior officer/s (usually Heads of Department or equivalent) of a Government/statutory corporation/public sector undertaking, not associated with the contract, are considered to be independent and impartial and are not barred from functioning as Arbitrators merely because their employer is a party to the contract.” 9. The Apex Court further has held that if the Director of a private company (which is a party to the Arbitration agreement) is named as the Arbitrator, there may be valid and reasonable apprehension of bias in view of his position and interest, and he may be unsuitable to act as an Arbitrator in an arbitration involving his company. If any circumstance exists to create a reasonable apprehension about the impartially or independence of the agreed or named Arbitrator, then the Court has the discretion not to appoint such a person. 10. In the present case, the petitioner has not made out any good ground to appoint an independent Arbitrator. Once a party has entered into an agreement with eyes wide open, it cannot wriggle out of the situation by contending that if the Managing Director of the BMTC is appointed as an Arbitrator, he will not be impartial or objective. The respondent is not a private company. It is an instrumentality of the State. A Senior IAS Officer is appointed as the Managing Director of the respondent. The petitioner is also a Government of Kerala undertaking. It has not produced any specific evidence for doubting the independence and impartiality of the named Arbitrator. The respondent is not a private company. It is an instrumentality of the State. A Senior IAS Officer is appointed as the Managing Director of the respondent. The petitioner is also a Government of Kerala undertaking. It has not produced any specific evidence for doubting the independence and impartiality of the named Arbitrator. Therefore, there is no justification for the apprehension about the independence or impartiality of the Managing Director of the respondent. If the named Arbitrator fails to act in a timely manner or conducts the proceedings with bias, that would enable the petitioner to ask for his removal as provided under Section 14 of the Act. In the alternative, if the petitioner feels that the Arbitrator has not acted independently or impartially or it has suffered any bias, it can make an application under Section 34 of the Act to set aside the award on the ground that the Arbitrator has acted with bias or malice in law or fact. However, it would not enable the petitioner to invoke Section 11 of the Act. 11. I do not find any merit in this petition. It is accordingly dismissed. No costs.