Hotel bosses acted "unreasonably'' in claiming Mr. Michael Mello could be biased if he took part in resolving their pay dispute with the Bermuda Industrial Union.

That was ruling of the Chief Justice the Hon. Sir James Astwood in the Supreme Court yesterday.

It follows Tuesday's appointment of Mr. Gregory Haycock to replace lawyer Mr.

Mello on the Essential Industries Disputes Settlement Board.

Mr. Mello resigned from the panel following objections from the Hotel Employers of Bermuda (HEB).

He said he wished to speed up a resolution to the contracts dispute.

At a Supreme Court hearing earlier this month Sir James refused to grant the HEB an order banning Mr. Mello from sitting on the settlement board.

The HEB claimed Mr. Mello's bid last year to return the parties to the negotiating table created a "suspicion of a likelihood of bias.'' Yesterday Sir James explained his refusal to issue a prohibition order on Mr.

Mello.

He said the HEB had failed to make its case, and he did not believe Mr. Mello had taken sides.

Said Sir James: "I say at the outset that there is no evidence of bias in Mr.

Mello, nor has it been shown to my satisfaction, on a balance of probability, that there is a real likelihood of bias.

"I said at the hearing, and I reiterate it now, that it appears to me the HEB does not wish Mr. Mello to be a member of the board simpliciter .'' Sir James said he had been presented with very scanty facts to work on.

It also appeared at one time the HEB was alleging actual bias against Mr.

Mello.

Sir James said Mr. Mello's efforts last year to settle the dispute did not indicate bias.

"All that can be said is that Mr. Mello and others attended on both parties to try and bring them together.

"Their efforts seem to have failed. As I said in court the HEB has not started to show a case of likelihood of bias.'' Sir James added: "In my view, I do not think a reasonable man, knowing the facts which are before this court, could come to the conclusion that the disputes board would be biased against either of these parties or would appear to have a likelihood of bias.

"For that reason I refused the order as the HEB was, in my opinion, acting unreasonably.'' The HEB had begun preparing an appeal against Sir James' decision.

The hearings on the hotel workers' contract are scheduled to go ahead on Monday.

HEB president Mr. Dennis Tucker has said the organisation will not object to accountant Mr. Haycock, appointed to the three-man panel by Labour Minister the Hon. Irving Pearman.

Mr. Haycock will join board chairman Prof. Ronald Haughton and Canon James Francis.

HON. Sir James Astwood.