IN THE HIGH COURT OF DELHI AT NEW DELHI
NEENA BANSAL KRISHNA, J.
National Highways Authority Of India – Appellant
Versus
M/s IJM Gayatri JV – Respondent
O.M.P. (COMM.) 235 of 2021
Decided on : 27-01-2023
Arbitration and Conciliation Act, 1996 - Section 34, 36, 38, (2) - Arbitral Award - Seeking stay of operation - Application has been filed on behalf of applicant/National Highways Authority of India seeking stay of operation of impugned Arbitral Award – Held, Fee fixation was done in accordance with prevailing law and cannot be held to be either against public policy or substantive law of land as it existed on date - It is quite evident that fixation of arbitral fee by learned AT cannot be faulted at this stage as it was done in accordance with prevailing law as enunciated in Rail Vikas Nigam Ltd. (supra) - There is no ground made out for granting a stay - Learned AT had observed that challenge to judgment of this Court in Rail Vikas Nigam Ltd. (supra) though pending before Hon’ble Supreme Court, had not been stayed - However, Apex Court has now decided this issue in Oil and Natural Gas Corporation Ltd. (supra) - Petitioner is at liberty to agitate its challenge to fee of AT in its petition under Section 34 of A & C Act, 1996 - Application disposed of.
JUDGMENT :
NEENA BANSAL KRISHNA, J
I.A. 10890/2021 (u/S 36 of Arbitration and Conciliation Act, 1996)
1. The application under Section 36 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as “A & C Act, 1996”) has been filed on behalf of the applicant/National Highways Authority of India (hereinafter referred to as “NHAI”) seeking stay of the operation of impugned Arbitral Award dated 04th February, 2021 passed by the Arbitrators comprising of Mr. Justice A.K. Sikri, Presiding Arbitrator, Mr. Justice R.C. Chopra, Co-Arbitrator, and Mr. K.B. Lal Singal, Co-Arbitrator only to the limited extent of the directions given by the Arbitral Tribunal (hereinafter referred to as “AT”) to the petitioner Authority to pay the fee of the AT in disregard to Schedule-IV of A & C Act, 1996, which has formed the part of the Award.
2. It is submitted that the respondent had filed an application dated 12th November, 2020 stating that the fee as per the Schedule-IV of A & C Act, 1996 is Rs. 30,00,000/- per Arbitrator and the interpretation given to the Schedule by this AT, should not be accepted as the Judgment in the case of Rail Vikas Nigam Ltd. Vs. Simplex Infrastructures Ltd. O.M.P. (T) (COMM.) 28/2020 dated 10th July, 2020 for fixing the Arbitrator’s Fees at Rs. 49,87,500/- was under challenge in a Special Leave Petition before the Hon’ble Supreme Court.
3. The petitioner has chronicled the Orders made by the AT from time to time in regard to the AT’s fee. In response to the application of the respondent (petitioner/NHAI) dated 12th November, 2020, the learned AT vide its Order dated 23th November, 2020 observed that the Supreme Court has not stayed the operation of the judgment and so long as the judgment remains in force, effect to that judgment has be given by the AT. Therefore, the fees was held to be rightly calculated in the Order dated 02nd November, 2020 in terms of the Schedule-IV as interpreted by the Co-Ordinate bench of this Court, which holds the field. Therefore, the application of the respondent (petitioner herein) was rejected.
4. Thereafter, learned AT vide its Order 24th November, 2020 noted that since the parties had already deposited Rs. 20,00,000, the balance amount of Rs. 29,87,500/- to each of the Arbitrators, was directed to be deposited by the parties, to be shared equally by the them.
5. Again, directions were issued by the AT vide its Orders dated 24th November, 2020 and 27th December, 2020 under Section 38 of the A & C Act, 1996 to the petitioner to deposit its share of fee or Rs. 9,93,750/- in the account of each of the Arbitrators on or before 25th January, 2021.
6. The Award in the matter was ready and the AT fixed the date 25th January, 2021 for the pronouncement of the Award. Again, directions were given by the learned AT that it shall have lien on the Award and it would neither be disclosed to the parties, nor the copy of the same shall be given till the payment of the balance fee as aforesaid was made. The learned AT also made clear that it shall incorporate necessary directions making the aforesaid payment made by the Claimant/ IJM Gayatri (JV) on behalf of the respondent/ NHAI (petitioner herein) as part of the costs of the Award. The learned AT vide its Order dated 22nd January, 2021 proceeded under Section 38(2) of A & C Act, 1996 for non-payment of the fee by the petitioner herein.
7. The petitioner/National Highways Authority of India has asserted that it had deposited its share of fee of Rs. 5,00,000/- was deposited on 18th December, 2020 and the petitioner had objected to the calculation of the arbitral fee as directed by the AT as the maximum fee payable to the Arbitral Tribunal was Rs. 30,00,000/-.
8. The respondent/Contractor has paid the alleged balance fee of Rs. 29,81,250/- to the AT and the AT has awarded the recovery of costs of Rs. 29,81,250/- against the petitioner herein for the arbitrator’s fee paid on behalf of the petitioner/NHAI.
9. Aggrieved by the impugned Award dated 04th F
The fee for arbitration can be fixed with the consent of the parties, and the consequences of non-payment of the fee are prescribed in Section 38(2) of the Arbitration and Conciliation Act, 1996.
The main legal point established in the judgment is the importance of party autonomy in determining arbitral fees, as well as the interpretation and application of the 2020 Circular in the context of....
The principle of party autonomy is crucial in arbitration proceedings, and the Arbitral Tribunal cannot impose its will and wishes without reason or cause.
The arbitral Tribunal was entitled to fix its fee as its appointment was made by way of an ad hoc agreement between the parties.
Arbitration fees must adhere strictly to the terms of the Arbitration Agreement, and unilateral alterations by the Tribunal are impermissible.
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