Case Note & Summary
The dispute arose from arbitration proceedings between Oil and Natural Gas Corporation Limited (ONGC) and Afcons Gunanusa JV concerning a Lump Sum Turnkey Contract for the construction of an ICP-R Platform. The contract was signed on 29 May 2009, and arbitration was invoked by Afcons on 20 July 2015 due to disputes. The arbitral tribunal was constituted with Justice Mukul Mudgal as Afcons' arbitrator and Justice Gyan Sudha Mishra as ONGC's arbitrator. The tribunal faced challenges in determining the fees for arbitrators, as the fee schedule in the contract was deemed unrealistic. The tribunal proposed a fee based on the Fourth Schedule of the Arbitration and Conciliation Act, 1996, which ONGC contested, leading to further proceedings. The court also addressed related cases involving NTPC Limited and Rail Vikas Nigam Limited, where similar issues regarding the interpretation of fees under the Fourth Schedule arose. The court ultimately clarified that the tribunal has the authority to fix separate fees for claims and counter-claims, emphasizing the need for a pragmatic approach in determining arbitrators' remuneration based on the complexity and value of the disputes involved. The decision underscored the importance of adhering to statutory provisions while allowing for flexibility in fee arrangements based on the specifics of each case.
Headnote
A) Arbitration Law - Arbitrators' Fees - Separate Fees for Claims and Counter-Claims - Arbitration and Conciliation Act, 1996, Sections 31(8), 38(1) - The court examined whether separate fees could be charged for claims and counter-claims in arbitration proceedings. It held that the tribunal has the discretion to fix separate fees based on the statutory provisions and the complexity of the case, affirming the tribunal's authority to determine fees in accordance with the Fourth Schedule (Paras 14-20).
Issue of Consideration
Whether the fees payable to arbitrators can be fixed separately for claims and counter-claims under the Fourth Schedule of the Arbitration and Conciliation Act, 1996.
Final Decision
The Supreme Court upheld the arbitral tribunal's authority to fix separate fees for claims and counter-claims, affirming the need for a pragmatic approach in determining arbitrators' remuneration based on the complexity and value of the disputes involved.
Law Points
- Arbitration fees
- Fourth Schedule
- Arbitration and Conciliation Act
- 1996
- party autonomy
- statutory interpretation
