The High Court of Jharkhand dismissed a petition of the petitioner, appointed as an arbitrator seeking payment of fees after his fees were not charged as per the fourth schedule and held that fees and expenses of the arbitral proceeding are to be fixed keeping into account the principles contained in Fourth Schedule under section 11(4) of the Arbitration and Conciliation Act, 1996 and thus it was not open to the arbitrator to enhance and fix his arbitral fees in excess of what is provided under the fourth schedule.
Brief Facts:
The petitioner was appointed as an arbitrator in a dispute between the parties and was given liberty to lay down fees and expenses of the arbitration proceeding, keeping into account the principles as contained in the Fourth Schedule [under Section 11(14)] of the Arbitration and Conciliation Act, 1996. The present petition was filed under Article 226 of the constition for direction to release the arbitral fees and the secretarial charges of Rs.6,57,026/- to the petitioner with interest @ 12% per annum.
Contentions of the Petitioner:
The learned counsel appearing on behalf of the petitioner contended that t as per the ratio laid down in Oil and Natural Gas Corporation Ltd. Versus Afcons Gunanusa JV, the Fourth Schedule is only a guideline on the basis of which the arbitral fees are to be fixed by the parties. Here, the order by which the Court fees were paid, remained unchallenged and attained its finality to which respondents are liable to make the payment.
Contentions of the Respondent:
A counter affidavit was filed on behalf of respondents-Railways wherein the claim of fees has been contested mainly on the ground that the fees being charged are not as per the Fourth Schedule and fees have already been paid as per this schedule
Observations of the court:
The court stated that the matter for consideration in the present case is whether r the learned Arbitrator was free to unilaterally deviate and fix fee higher than admissible under fourth schedule of the Arbitration Act and stated that the same is not permissible in view of the ratio laid down by the Supreme Court in Oil and Natural Gas Corporation Ltd. Versus Afcons Gunanusa JV wherein it was held that ‘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.’
Further, the court stated that in the order of appointment, it was clarified that the fees and expenses of the arbitral proceeding are to be fixed keeping into account the principles contained in the Fourth Schedule under section 11(4) of the Arbitration and Conciliation Act, 1996 and thus it was not open to the arbitrartor to enhance and fix his arbitral fees in excess of what is provided under the fourth schedule and the mere fixing of higher fees at the first hearing was not sufficient to sustain the claim, as the parties had not mutually agreed to it and thus, claim for unilaterally fixed higher fees is not sustainable.
The decision of the Court:
The court dismissed the writ petition.
Case Title: Justice Anil Kumar Sinha vs Eastern Railways and ors.
Coram: Hon’ble Mr. Justice Gautam Kumar Choudhary
Case No.: W.P.(C) No. 369 of 2020
Advocate for the Petitioner: Mr. Prashant Pallav and Mr. Parth Jalan
Advocate for the Respondent: Mr. Anil Kumar and Mr. Prabhat Kumar Sinha
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