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.

JUDGMENT :

NAVIN CHAWLA, J.

I.A. 7559-60/2023 (exemption)

1. Allowed, subject to all just exceptions.

O.M.P.(MISC.)(COMM.) 118/2023

2. This petition has been filed under Section 29A of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as the ‘Act’) praying for the following reliefs:

“b. Appoint a new Arbitrator in the Arbitration proceedings titled as “Anay Kumar Gupta v. Jagmeet Singh Bhatia” and pass directions for fixing arbitral fee as per Schedule IV of the Act;

c. Transfer the arbitral fees paid by the parties before the Arbitral Tribunal in the name of newly appointed Arbitrator;

d. Counter claim filed by the Petitioner may be allowed to be admitted.”

3. The learned Arbitrator was appointed, on an application filed by the petitioner herein under Section 8 of the Act, vide order dated 20.09.2021. passed by this Court in CS (COMM) No. 409/2021, titled Anay Kumar Gupta v. Jagmeet Singh Bhatia. As far as the fee of the learned Arbitrator was concerned, this Court directed vide the same order that the learned Arbitrator may fix his own fees.

4. The learned Arbitrator entered upon the reference on 23.09.2021.. Vide an order dated 25.09.2021., the learned Arbitrator directed the parties to make an initial deposit of Rs. 5 Lakhs each towards the Arbitral fee alongwith Rs. 15,000/- each towards secretarial and administrative expenses.

5. The learned Arbitrator thereafter vide order dated 11.10.2021., while considering an application under Section 17 of the Act, directed the parties to make a further deposit of Rs. 2.5 Lakhs each to be paid on or before the next date of hearing. The petitioner did not comply with the said direction. In the meantime, the learned Arbitrator continued to consider the application filed by the respondent under Section 17 of the Act and pass certain interim directions.

6. The petitioner herein did not comply with the interim directions passed by the learned Arbitrator nor deposited the second tranche of the interim fee. The learned Arbitrator, therefore, vide his order dated 13.01.2022. inter alia directed that the matter would be taken up subject to the petitioner herein complying fully with the directions given and subject to the petitioner depositing the interim Arbitral fee. The learned counsel for the petitioner appearing before the learned Arbitrator sought 10 days' time to comply with the directions.

7. Instead of complying with the interim directions passed by the learned Arbitrator including depositing the interim fee, the petitioner herein filed an application before the learned Arbitrator claiming that the learned Arbitrator had revised his fee vide order dated 11.10.2021. to Rs. 2.50 lakhs per hearing.

8. The said application was dismissed by the learned Arbitrator vide his order dated 31.01.2022., holding that there was no such direction issued by the learned Arbitrator fixing a fee of Rs. 2.5 Lakh per hearing. The learned Arbitrator also observed that there was no direction by the Court for application of the Schedule IV, rather there was a specific direction enabling the Arbitral Tribunal to fix its own fee.

9. Finally, by his order dated 16.02.2022., the learned Arbitrator fixed a fee of Rs. 75,000/- each for the claimant and the respondent, exclusive of the administrative and secretarial expenses, for sessions of 2 to 2.5 hours each. The learned Arbitrator specifically recorded in his order dated 16.02.2022. that the fee so fixed is acceptable to both, the claimant and the respondent, who have sought instructions from their respective clients and have confirmed the same. It was further directed that the earlier fee deposited by the parties shall be adjusted in the fee now fixed by the learned Arbitrator. Paragraphs 3 and 4 of the said order are reproduced herein below:

“3. The Arbitrator was to fix its own fee. Ld. Counsel for the Respondent submits that the Respondent has suffered losses but would like to pursue its Counterclaims which are in the range of Rs. 3.5 Crores. He prays th