bias'' claims levelled by hoteliers against arbitration panel member Mr.

Michael Mello.

But Sir James predicted the dispute would continue through lengthy appeals, producing an uncertain future for Settlement Board hearings on a new hotel workers contract. "It's not going to clear the deck,'' he warned.

Hearings have already been delayed twice by the objection to Mr. Mello, and whether or not they can begin as scheduled on May 4 is unclear.

Hotel Employers of Bermuda president Mr. Dennis Tucker said his organisation will wait for Sir James' written opinion next week before deciding its next move.

Bermuda Industrial Union president Mr. Ottiwell Simmons MP expressed frustration with the delays. "We must get on with it,'' he said. "The workers are waiting for their pay increases and their back pay.'' He said the BIU might raise objections to the appearance of the HEB's American labour lawyer Mr. Stephen Shawe when hearings eventually resume. "I will not paint myself into a corner,'' he added. "I will see what happens.'' In the Supreme Court yesterday, HEB lawyer Mr. Geoffrey Bell said hoteliers do not claim Mr. Mello is "actually biased,'' but that there is "a reasonable suspicion of likelihood of bias.'' This stems from Mr. Mello's efforts to mediate after the BIU rejected the Hobgood arbitration award last year, and the HEB members imposed it. At that time, Mr. Mello urged both parties to return to the negotiating table "in the interest of the country.'' As such, Mr. Bell argued yesterday, Mr. Mello was urging the HEB to give up its position and produce a more generous offer to the union.

In fact, Mr. Bell continued, it is now the HEB's position that the Hobgood Award is overly generous to the union and it plans to argue for less.

Mr. Mark Diel, representing Mr. Mello, argued his client had simply urged the parties to talk last year.

"It's not bias, and it would not appear to the reasonable man to be bias merely to urge both parties to go back to the negotiating table,'' he said.

After listening to more than two hours of legal arguments from both sides, Sir James quickly rejected the HEB's case.

Mr. Mello "expressed no views'' when he attempted to mediate last year, he said. "It's a simple case. It seems to me that one side doesn't want him.

That's not sufficient reason for me to prohibit him.'' According to several sources familiar with the dispute, the court case did not directly address the HEB's fundamental problem with the panel membership -- its belief the BIU has a representative while it does not.

In addition to chairman Prof. Ronald Haughton, the panel is made up of Canon James Francis and Mr. Mello.

Earlier this year, the Labour Ministry invited the HEB and the BIU to submit lists of suggested panel members.

Canon Francis appeared on the BIU's list of about a dozen names, but Mr.

Mello's name appeared on neither list.

The HEB complained to Labour Minister the Hon. Irving Pearman, but was told the suggestions were only meant to be suggestions, that nobody had "representatives'' on the board, and that once named, the panel would not be changed.

It was then that the HEB took legal action.

MR. Michael Mello.