The ceiling limit on arbitrators' fees under the Arbitration and Conciliation Act is applicable solely to the variable fee component and does not include the base fee, affirming the tribunal's interpretative discretion.

JUDGMENT

Rekha Palli, J. (Oral)--The present petition preferred under Section 14 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as `the Act') seeks termination of the mandate of the 3-member Arbitral Tribunal constituted to adjudicate the disputes between the parties, on the ground that the Tribunal has willfully disregarded the ceiling provided in Schedule IV of the Act while fixing its fee.

2. The petitioner Rail Vikas Nigam Limited is a public sector undertaking engaged in the business of railway construction projects for the Indian Railways. On 27.09.2010, the petitioner issued an Invitation to Bid for construction of Viaduct and related works for 4.748 km length in Joka-BBD Bag Corridor of Kolkata Metro Railway Line, excluding the station areas from Ch.1250 to Ch.4128.00 between Joka to Behala Chowrasta including Depot Approach at Joka. In response thereto, the respondent submitted its bid which was accepted by the petitioner by way of the letter dated 28.12.2010. Shortly thereafter, on 28.01.2011, the parties executed a formal contract to carry out the work, however the date of commencement was taken as the date on which the Letter of Acceptance was issued, i.e., 28.12.2010.

3. Initially, as per the terms of the contract, the project was earmarked for completion on 27.06.2013, but for various reasons the original schedule could not be adhered to and the project completion date kept being extended. Finally, on 20.11.2017, the respondent completed the construction work as outlined in the Scope of Work in the contract dated 28.01.2011. However, since the respondent claimed that the petitioner's failure to discharge its obligations under the contract in a timely manner delayed the contract from a 30-month long to an 84- month long project, it sought cost escalation from the petitioner. Since repeated claims in this regard went unanswered, the respondent invoked arbitration under Clause 17.3 of the General Conditions of Contract (GCC) but the petitioner failed to appoint its nominee arbitrator. Resultantly, the respondent approached this Court by way of Arb. Pet. 519/2018 which was allowed on 11.12.2018. This Court appointed Hon'ble Mr. Justice Swatanter Kumar (Retd.) as the nominee arbitrator on behalf of the petitioner herein with a specific direction that the fee of the learned arbitrator would be fixed as per Schedule-IV appended to the Act.

4. In its first sitting which took place on 15.01.2019, the learned Tribunal recorded that its fee would be assessed as per Schedule IV to the Act. The parties completed all pleadings thereafter and made part payment towards fees. On 09.01.2020, in its 8th sitting, the Tribunal extended the time for rendering an award by six months with the consent of the parties and after observing that only two installments of Rs.5 lakh each had been paid towards arbitrators' fee, directed the parties to pay the outstanding dues which, in terms of Schedule IV to the Act, was observed as Rs.49,87,500/-. Consequently, the parties were granted four weeks' time to pay the fee.

5. Aggrieved by the fixation of fee, the petitioner preferred an application before the learned Tribunal on 27.02.2020 averring that the fee fixed exceeds the statutory ceiling limit of Rs.30,00,000/- prescribed in Schedule IV of the Act and is, therefore, contrary to the statutory provisions set out in the Act. The Tribunal examined the objections raised by the petitioner and rejected them by way of its order dated 03.03.2020, the relevant extract whereof reads as under:

"8. On a reading of the plain language of Schedule IV reproduced hereinabove, it becomes clear that the same provides for payment of fix fee with certain percentage if the claim exceeds Rs.5,00,000/- or more. If the claim is more than Rs.20,00,00,000 then in addition to the fixed fee of Rs.19,87,500/- the parties are liable to pay 0.5% of the claim amount over and above Rs.20,00,00,000/- with a ceiling of Rs.30,00,000. The word `