NDLI: Oil and Natural Gas Corporation Ltd Vs. Afcons Gunanusa Jv

Content Provider	Supreme Court of India
e-ISSN	30484839
Language	English
Access Restriction	NDLI
Subject Keyword	1996 – ss. 11 38 and 39 – Fourth Schedule – Arbitrators’ Fees – 31A Arbitration and Conciliation Act 31
Content Type	Text
Resource Type	Law Judgement
Jurisdiction	India
Case(s) Referred	Referred Case 0 Referred Case 1 Referred Case 2 Referred Case 3 Referred Case 4 Referred Case 5 Referred Case 6 Referred Case 7 Referred Case 8 Referred Case 9 Referred Case 10 Referred Case 11 Referred Case 12 Referred Case 13 Referred Case 14 Referred Case 15 Referred Case 16 Referred Case 17 Referred Case 18
Case Type	Arbitration Petition
Court	Supreme Court of India
Disposal Nature	Appeal Disposed Off
Headnote	Arbitration and Conciliation Act, 1996 – ss. 11, 31, 31A, 38 and 39 – Fourth Schedule – Arbitrators’ Fees – Whether the arbitrator(s) are entitled to unilaterally determine their own fees – Whether the term “sum in dispute” in the Fourth Schedule to the Arbitration Act means the cumulative total of the amounts of the claim and counterclaim – Whether the ceiling of Rs 30,00,000 in the entry at Serial No 6 of the Fourth Schedule of the Arbitration Act is applicable only to the variable amount of the fee or the entire fee amount – Whether the ceiling of Rs 30,00,000 applies as a cumulative fee payable to the arbitral tribunal or it represents the fee payable to each arbitrator – Held: Arbitrators do not have the power to unilaterally issue binding and enforceable orders determining their own fees – A unilateral determination of fees violates the principles of party autonomy and the doctrine of the prohibition of in rem suam decisions, i.e., the arbitrators cannot be a judge of their own private claim against the parties regarding their remuneration – However, the arbitral tribunal has the discretion to apportion the costs (including arbitrators’ fee and expenses) between the parties in terms of s.31(8) and s.31A and also demand a deposit (advance on costs) in accordance with s.38 – If while fixing costs or deposits, the arbitral tribunal makes any finding relating to arbitrators’ fees (in the absence of an agreement between the parties and arbitrators), it cannot be enforced in favour of the arbitrators – The arbitral tribunal can only exercise a lien over the delivery of arbitral award if the payment to it remains outstanding u/s.39(1) – The party can approach the court to review the fees demanded by the arbitrators if it believes the fees are unreasonable u/s.39(2) – The term “sum in dispute” in the Fourth Schedule of the Arbitration Act refers to the sum in dispute in a claim and counterclaim separately, and not cumulatively – Consequently, arbitrators shall be entitled to charge a separate fee for the claim and the counter-claim in an ad hoc arbitration proceeding, and the fee ceiling contained in the Fourth Schedule will separately apply to both, when the fee structure of the Fourth schedule has been made applicable to the ad hoc arbitration – The ceiling of Rs 30,00,000 in the entry at Serial No 6 of the Fourth Schedule is applicable to the sum of the base amount (of Rs 19,87,500) and the variable amount over and above it –Consequently, the highest fee payable shall be Rs 30,00,000 – This ceiling is applicable to each individual arbitrator, and not the arbitral tribunal as a whole, where it consists of three or more arbitrators – A sole arbitrator shall be paid 25 per cent over and above this amount in accordance with the Note to the Fourth Schedule. Arbitration Law – Concepts of costs and fees in arbitration – Distinguished. Arbitration Law – Ad hoc arbitration – Direction / guidelines issued for governing proceedings in ad hoc arbitrations. In the instant arbitration petition, the following issues in relation to the arbitrators’ fees arose for consideration: (i) Whether the arbitrator (s) are entitled to unilaterally determine their own fees; (ii) Whether the term “sum in dispute” in the Fourth Schedule to the Arbitration Act means the cumulative total of the amounts of the claim and counterclaim; (iii)Whether the ceiling of Rs 30,00,000 in the entry at Serial No 6 of the Fourth Schedule of the Arbitration Act is applicable only to the variable amount of the fee or the entire fee amount; and (iv)Whether the ceiling of Rs 30,00,000 applies as a cumulative fee payable to the arbitral tribunal or it represents the fee payable to each arbitrator.
Judge	Hon'ble Dr. Justice D.Y. Chandrachud
Neutral Citation	2022 INSC 884
Petitioner	Oil And Natural Gas Corporation Ltd
Respondent	Afcons Gunanusa Jv
SCR	[2022] 10 S.C.R. 660
Judgement Date	2022-08-30
Case Number	05

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