Arbitral fees must adhere to mutual consent; however, they may be revised in extraordinary circumstances as dictated by the Fourth Schedule of the Arbitration and Conciliation Act.

JUDGMENT

Navin Chawla, J. (Oral)--This petition has been filed by the petitioner under Section 14 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as the `Act') praying for termination of the mandate of the learned Sole Arbitrator in Arbitration Case No. 13/2018; between Deepak Cables (India) Limited (in liquidation) and Power Grid Corporation of India Limited. The petitioner is aggrieved of what it calls a unilateral revision of the arbitral fee by the learned Sole Arbitrator by way of his orders dated 05.08.2021 and 10.11.2021.

2. It is the case of the petitioner that disputes had arisen between the parties in respect of five different contracts. They were pending adjudication before five three-member Arbitral Tribunals. The parties agreed that instead of five three-member Arbitral Tribunals, these disputes be referred to a Sole Arbitrator, albeit in five different arbitration matters. The same were, therefore, referred to the learned Sole Arbitrator in question. By an order dated 20.01.2018, the learned Sole Arbitrator accepted the nomination, and with the consent of the parties, inter alia, fixed the consolidated arbitration fee as Rs.52,50,000/- (Rupees Fifty Two Lakhs and Fifty Thousand Only) to be paid by the petitioner and the respondent as a consolidated fee for all the five arbitrations. Thereafter, due to certain developments and orders passed by this Court, arbitration proceedings in four of those matters stand stayed and cannot proceed.

3. The learned Sole Arbitrator was approached by the respondent for continuation of the fifth matter, that is, the present arbitration case out of which the present petition arises. The learned Sole Arbitrator by the Impugned Order dated 05.08.2021 held that as far as the Counter Claim is concerned, the fee shall be charged separately in accordance with the Fourth Schedule of the Act. With respect to the arbitral fee on the claim of the respondent herein, the learned Sole Arbitrator observed as under:

"18. As regards fee of the Sole Arbitrator in the Claim Petition is concerned, the matter being separated and tried separately from other four matters, it will be just and proper for the parties to clarify as to what shall be the amount of fee payable to the Sole Arbitrator for settlement of the Claim Petition from the amount of consolidated fee settled for claim at the time of commencement of arbitration proceedings before the Sole Arbitrator."

4. Before the learned Sole Arbitrator, the respondent stated that the fee should be fixed in accordance with the Fourth Schedule; while the petitioner maintained that the fee of the present arbitration case should be fixed pro rata, that is, 1/5th of the consolidated fee earlier agreed by the learned Sole Arbitrator.

5. By the impugned order dated 10.11.2021, the learned Sole Arbitrator decided to charge the arbitral fee in accordance with the Fourth Schedule of the Act as far as the claim is concerned.

6. Aggrieved of the above orders, the petitioner filed the present petition before this Court.

7. By an order dated 24.01.2022, this Court directed as under:

"4. Without expressing any opinion, one way or the other, on the fees payable to the learned Arbitrator, in view of the request made by the petitioner on 4th November, 2021, for a hearing on the application of the respondent for fixation of fees, which was apparently not noted by the learned Arbitrator while passing the order dated 10th November, 2021, I am of the opinion that the principles of natural justice would require the learned Arbitrator to reconsider the aspect of fixation of fees after granting an opportunity of hearing to the petitioner.

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6. The learned Arbitrator is requested to hear the petitioner on the aspect of fixation of fees, whereafter the learned Arbitrator is requested to pass a fresh order regarding the fees payable to him."

8. The petitioner then filed an application, being I.A. 10105/2022, placing on record copy of the order