The court emphasized the importance of honoring agreements on Arbitrator's fees and highlighted the need to prioritize payment of Arbitrator's fees, even in insolvency proceedings.

JUDGMENT

(Prayer in A. No. 2 080 of 2021: Application filed under Order XIV Rule 8 of Original Side Rules read with Section 39 of the Arbitration and Conciliation Act, 1996 to direct the second respondent to release the lien on the Award dated 30.04.2021 and consequently to provide a complete, signed copy of the Award dated 30.04.2021 to the applicant.

A.No.4609 of 2021: Application filed under Order XIV Rule 8 of Original Side Rules read with Section 39(2) of the Arbitration and Conciliation Act, 1996 to fix the fees of the second respondent/ Arbitrator, who has passed the Award dated 30.04.2021.)

Common Order

 1. Heard Mr.G. Veerapathiran, learned counsel for the applicant and Ms.J.Jyothi, learned counsel for the 1st respondent and Ms.Vinithra Srinivasan, learned counsel for the 2nd respondent.

2. Application No.2080 of 2021 has been filed to direct the second respondent (Arbitrator) to release the lien on the Arbitral Award dated 30.04.2021 and consequently to provide a complete signed copy of the Arbitral Award dated 30.04.2021 to the applicant.

3. Application No.4609 of 2021 has been filed to fix the fees of the second respondent/Arbitrator, who has passed the Arbitral Award dated 30.04.2021.

4. The applicant is the respondent in the Arbitration and the first respondent is the claimant. Pursuant to the Orders passed by this Court dated 20.03.2018 in O.A. No.1259 of 2017 under Section 11 of the Arbitration and Conciliation Act, 1996, the second respondent, a Former Judge of the Hon''ble Supreme Court was appointed as the Sole Arbitrator to adjudicate the dispute between the applicant and the first respondent. In the order dated 20.03.2018, passed by this Court in O.A.No.1259 of 2017, the Arbitrator was granted liberty to fix his fees and costs. The Arbitrator acted upon the reference pursuant to directions given by this Court on 20.03.2018 in O.A. No.1259 of 2017 and commenced the Arbitration. Both the parties to the dispute participated in the Arbitration, which has culminated in the passing of the Arbitral Award dated 30.04.2021. The first respondent (claimant) has paid its portion of the Arbitrator’s fee and cost. However, the applicant, who is the respondent in the Arbitration, failed to pay the balance Arbitrator’s fee and cost amounting to Rs.59,73,750/-. The second respondent (Arbitrator) has exercised his statutory lien as per the provisions of Section 39(1) of the Arbitration and Conciliation Act 1996 for non payment of his fees/costs by the applicant. The Arbitrator has not delivered the Original Award dated 30.04.2021 to the applicant, but has delivered the same only to the first respondent, who has paid its portion of the Arbitrator’s fee/cost. Aggrieved by the exercise of the statutory lien by the Arbitrator under Section 39(1) of the Arbitration and Conciliation Act 1996, these applications have been filed under Section 39(2) of the Arbitration and Conciliation Act 1996 seeking for the release of the lien and for revising the fees / cost payable to the arbitrator by the applicant.

5. According to the applicant, the Arbitrator (second respondent) has imposed and demanded exorbitant Arbitration fees/costs from the applicant and has wrongfully exercised lien on the Award for the alleged non payment of the Arbitrator’s fee/cost as per the provisions of Section 39(1) of the Arbitration and Conciliation Act 1996. It is also the case of the applicant that since the applicant is facing CIRP proceedings before the National Company Law Tribunal, the Arbitrator''s fees cannot be paid to the Arbitrator (second respondent). However, according to the Arbitrator (second respondent), only based on a mutual agreement between the parties to the dispute, which has been recorded in the Minutes of the Arbitrator''s proceedings, the Arbitrator’s fee/cost was fixed. According to him, the first respondent has already paid the Arbitrator''s fee/cost as per the agreement and it is only the applicant, who is the respondent in the Arbitration,