rocky start tomorrow with hoteliers pushing for adjournment because of their unhappiness with its deputy chairman.

The Hotel Employers of Bermuda have two law suits against Mr. Michael Mello alleging a likelihood he would be biased against hotels.

Yesterday, the Chief Justice adjourned hearing the suits without setting a follow-up court date.

The decision should see the Mello issue raised before the Essential Industries Disputes Settlement Board, which was created to resolve the long-standing contract dispute between the HEB and the Bermuda Industrial Union.

The issue, given the law suits, would have to be settled before the Board could hear arguments on contract issues.

Last night, HEB lawyer Mr. Jai Pachai said the HEB was "contemplating adjournment of the proceedings pending the outcome of the Supreme Court applications.'' Mr. Mello is a senior partner at the law firm of Mello, Hollis, Jones & Martin and an experienced arbitrator who also chairs the Price Control Commission. He is to sit on the board with Canon James Francis and its chairman, American professor Ronald Haughton.

It is believed the HEB push for Mr. Mello's ouster stems from events in 1991 when he was a member of a ministerial committee working to bring the BIU and HEB together on the so-called Hobgood Award, a contract settlement drafted by American mediator Mr. William Hobgood.

Arguments over the make-up of the board will again raise the question of its workability.

The board was badly scarred in its debut on the Grotto Bay gratuities issue when the hotel walked out of the hearings and ignored the board's findings.

New Labour Minister the Hon. Irving Pearman subsequently said he would consider making the board's findings legally enforceable.

Both sides in the contract dispute have said they will abide by the system in place. However, the extraordinary law suits against Mr. Mello portend problems.

The Mello issue took a new turn late last week when the HEB filed a second writ against Mr. Mello. It is believed the writ is procedurally more appropriate than the first in that it specifically calls for the court to quash his appointment. The two writs are based on an HEB perception that there is a "likelihood of bias'' on Mr. Mello's part.

The suits are an indication of the high stakes pressures on the two sides as they prepare their arguments for the board.

"Businesses are at stake,'' one top hotelier said of the outcome. HEB executive vice president Mr. John Harvey said the board hearings would "determined the future of the industry.

"Since 1990, there has been a steady decline in occupancies and an increase in losses. These things can't be sustained. If one is to go before that board one must do so with a tremendous amount of nervousness.'' Mr. Harvey said the HEB considered many options before committing itself to the board, which was heralded by Government last year as the "last resort'' solution to the contract talks.

"We decided in the interests of the country that we'd be good corporate citizens and put our best case forward,'' Mr. Harvey said.

The board will be asked to decide on key issues representing hundreds of thousands of dollars for either side.

It will have to decide, for example, whether or not to make the contract retroactive to February 23, 1991, the day the last three-year contract expired. The HEB has said it considers 1991 to be history and that the new contract should be dated from February 24 this year.

Workers continued to accept their pay through all of 1991 without increase.

The board will decide all monetary issues. In more than 40 negotiating sessions since late 1990, the two sides did not agree on any financial items.

More than 17 individual items remain in dispute including wages, pensions, medical insurance, annual vacations and sick leave.

As contract talks sputtered to a halt earlier this year, the two sides had moved farther apart on money. The union was holding to wage and benefits increases of more than 20 percent while the HEB was insisting on a three-year contract with a wage freeze in the first year followed by annual increases of three percent.