Arbitrator's Fees : Supreme Court To Hear Issues Relating To 4th Schedule Of Arbitration Act

The Supreme Court has decided to consider the legal questions pertaining to the fee scale for arbitrators under the Fourth Schedule of the Arbitration & Conciliation Act, 1996Different cases relating to the interpretation of the Fourth Schedule are pending before different Benches of the Supreme Court.Last week, while arguing an arbitration petition filed by Oil and Natural Gas Corporation, the Attorney General for India KK Venugopal had raised concerns about "exorbitant and arbitrary" fees charged by arbitrators in cases involving Public Sector Undertakings, deviating from the fee scale prescribed under the Fourth Schedule.Attorney General Raises Concerns About 'Exorbitant' Arbitrators' Fee In PSU Cases; Supreme Court Agrees To Hear Issue Of 4th Schedule Fee ScaleAfter the AG urged the Court to lay down guidelines to bring uniformity in arbitration fees, a bench led by the Chief Justice of India NV Ramana agreed to constitute a bench to hear the Special Leave Petitions in which issues related to 4th Schedule are involved. A bench comprising CJI NV Ramana, Justice AS Bopanna and Justice Hima Kohli issued notice in the Arbitration Case Oil and Natural Gas Corporation Ltd vs Afcos Gunansa JV (Arbitration Case 5/2022) and tagged two other special leave petitions along with it. The matter will be next considered on March 23.The connected Special Leave Petitions are :HCIL Adhikarya ARSS (JV) v. Rail Vikas Nigam Limited (SLP(c) 10021-10022 of 2017)In September 2021, a bench comprising Justice MR Shah and Justice Aniruddha Bose noted that a "very important question of law arose" on the issue whether a separate fee under the Fourth Schedule of the Arbitration & Conciliation Act, 1996 is payable on the counter claim or not. The bench had opined that the issue would have a wider implication, and there may be other ancillary issues also which are also required to be considered.The Court had then appointed Senior Advocate Huzefa Ahmadi as the Amicus Curiae in this matter to assist the court. The matter hasn't been taken up since then. NTPC LIMITED vs. AFCONS R.N. SHETTY AND CO. PVT. LTD JV (SLP(c) No.13426/2021)The case, presently being heard by a Bench led by Justice MR Shah deals with question of whether the Arbitral Tribunal could treat the amounts contained in the claims and counter-claims separately in terms of the Fourth Schedule to the 1996 Act. The Delhi High Court had answered in the affirmative, which has been challenged before the Top Court. Before the Delhi High Court, the petitioner NTPC and respondent AFCONS were, in knots on the fees payable to the Arbitral Tribunal.By an agreement between the parties, the fees payable to the Arbitral Tribunal was to be in accordance with the Fourth Schedule to the Arbitration and Conciliation Act, 1996. Neither of the parties was aggrieved by the fixation of fees of the Arbitral Tribunal under the Fourth Schedule to the 1996 Act.The dispute arose when the respondent's claims were to the tune of ₹ 37,54,04,137/- and the counter-claim of the petitioner was to the tune of ₹ 19,01,48,785, and the Arbitral Tribunal, applying the proviso to Section 38(1) of the 1996 Act, held that separate fees were payable to the Arbitral Tribunal on the claims and counter-claims.On that reckoning, the Arbitral Tribunal found each member of the Tribunal to be entitled to be paid ₹ 28,64,520 for the claims of the respondent and to ₹ 19,13,615 for the counter-claims of the petitioner, apart from secretarial charges.The NTPC had essentially contended that the Arbitral Tribunal erred in finding itself entitled to separate fees on the claims preferred by the AFCONS and the counter-claims preferred by the NTPC.The petitioner NTPC had filed an application before the Arbitral Tribunal for modification of the order on the aspect of fees which was rejected by the Arbitral Tribunal by an order dated 8th November, 2019.The Arbitral Tribunal was of the view that, by operation of the proviso to Section 38(1) of the 1996 Act, separate arbitral fees were payable on the claims and counter-claims.The High Court had dismissed the petition challenging the Tribunal's order and opined that, while reckoning the "sum in dispute" as employed in the Fourth Schedule to the 1996 Act, no exception can be taken to the decision of the Arbitral Tribunal to treat the amounts contained in the claims and counter-claims separately.RAIL VIKAS NIGAM LIMITED vs. SIMPLEX INFRASTRUCTURES LTD (SLP(c) No. 10358/2020)The case pertains to the question of interpretation of Entry No. 6 of Schedule IV, dealing with quantum of sums in dispute in arbitration:'Is the ceiling limit of Rs. 30,00,000/- inclusive of the base fee of Rs.19,87,500/- or is it only applicable as a cap on the latter portion of the Model Fee prescribed, i.e., 0.5% of the claim amount over and above Rs. 20 crores'The special leave petition has been moved by the Rail Vikas Nigam Ltd challenging Delhi High Court's order holding that the Tribunal did not wilfully disregard ...

Arbitrator's Fees : Supreme Court To Hear Issues Relating To 4th Schedule Of Arbitration Act

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