CALCUTTA HIGH COURT
Bibhas Ranjan De, J.
P and P Business Private Limited v. Marco Francesco Shoes (India) Private Limited
C. O. No. 140 of 2023
1. The instant revision application is directed against merits of the arbitration dated 22.03.2022 and 11.12.2022 passed by the Ld. Sole arbitrator in the arbitral proceedings between Marco Francesco Shoes (India) Private Limited and P and P 2 Business Private Limited by invoking Art.227 of the Constitution of India.
2. Pursuant to some disputes and differences that cropped up between the parties, with regard to running of sand block situated at Gopalpur, Bankura wherein the opposite party who had the tender to run the said sand block granted the petitioner lease to mine the sand block in exchange of a monetary consideration, claimed non - payment of fees by the petitioner. As per the agreement dated 23.05.2018, an arbitral proceeding took place before the Ld. Arbitrator. During pendency of such proceeding, the claimant filed one statement of claim amounting to Rs.2,56,26,000/- along with interest whereas the respondent filed a counterclaim to the tune of Rs.6,90,98,132/- along with interest. The Ld. Arbitrator allegedly claimed a lumpsum amount of Rs.30,00,000/- as his fees in violation of the Forth Schedule envisaged in the Arbitration and Conciliation Act, 1996 (hereinafter referred to as Act of 1996) which was to be borne by the parties equally (i.e. Rs.15,00,000/- each). Being aggrieved by and dissatisfied with such decision of the Ld. Arbitrator, the petitioners have filed the instant revision application.
3. At the Bar: -
Ld. Counsel, Mr. Partha Pratim Roy, appearing on behalf of the petitioner by relying on the specific provisions of S.11(3)(A) and S.11(14) of the Act of 1996, has vehemently argued that the unilateral fixation of fees goes against the principle of party autonomy, which is central of the resolution to the disputes through arbitration. Thus, there is no enabling provision under the Act of 1996 which empowers the Arbitrators to unilaterally issue a binding or an enforceable order regarding their fees, therefore, they cannot fix their fees unilaterally which de hors the agreement between the parties and therefore the fees of the Arbitrator should be fixed in accordance with the Fourth Schedule of the Act of 1996.
4. In support of this submission, Mr. Roy has claimed that in terms of the Fourth Schedule of the Act, the total claim and counter - claim comes to around Rs.5,57,24,132/-, which would be governed by the 4th row of the schedule and the total remuneration thus, would be Rs.3,37,500+1 per cent of the claim amount over and above Rs.1,00,00,000/- which comes to about Rs.4,57,241/- and thus the total remuneration of the Learned Arbitrator stands at Rs.7,94,741/- and in addition to that as in the instant case, the arbitral tribunal consists of a sole arbitrator, he is allowed to an additional amount of 25 per cent on the fee payable i.e., 25% of Rs.7,94,741/- which comes to around Rs.1,98,685.25/- and thus the total fee payable by both the parties in terms of the Fourth Schedule of the Act would be Rs.7,49,741+1,98,685.25 = Rs.9,93,426.25/-. But, the Ld. Arbitrator had charged Rs.30,00,000/- (Thirty Lakhs) which is not permissible.
5. Last but not the least, Mr. Roy regarding the issue of maintainability of the instant revision application has contended that the petitioner has no through remedy under the Arbitration Act. As neither through S.37 nor S.34 of the Act of 1996 any remedy is available to the petitioner. It is well settled that where there is a wrong, there is a remedy and the petitioner cannot be left remediless. Therefore, in the absence of any remedy under the Arbitration Act, Art.227 is indeed applicable.
6. Before parting with, Mr. Roy has tried to make this Court understand that in the present case, the Learned Arbitrator has fixed the fees by an order without assigning any reasons. It is well settled that any order passed without reasons is a ity and non - assigning of reasons is a violation of the principles of natural justice. This is all the more relevant since at the time of fixin
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