Madras High Court

M/S.Chennai Metro Rail Limited vs M/S.Transtonnelstroy-Afcons Jv on 24 January, 2023

                                                                     Arb.O.P (Com.Div.) No.371 of 2022

                                   IN THE HIGH COURT OF JUDICATURE AT MADRAS

                                                 DATED: 24.01.2023

                                                      CORAM

                                  THE HON'BLE Mr. JUSTICE KRISHNAN RAMASAMY

                                          Arb.O.P (Com.Div.) No.371 of 2022


                     M/s.Chennai Metro Rail Limited,
                     Administration Building,
                     Chennai Metro Rail Depot,
                     Poonamalle High Road,
                     Koyambedu, Chennai 600 107,
                     Rep by Chief General Manager (A & CM)
                                                                                      ... Petitioner

                                                     Vs.

                     1.M/s.Transtonnelstroy-Afcons JV,
                       Rep by Afcons Infrastructure Limited,
                       and comprising:

                     a)Transtonnelstroy Limited,
                       4/1, Luganskaya Str,
                       Moscow, 115583,
                       Russia

                     b)Afcons Infrastructure Limited,
                       Afcons House,
                       16, Shah Industrial Estate,
                       Veera Desai Road, Azad Nagar (P.O.),
                       Post Box No.11878, Andheri (W),
                       Mumbai 400 053.

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                                                                             Arb.O.P (Com.Div.) No.371 of 2022



                     2.Dr.M.S.Srinivasan,
                       Presiding Arbitrator,
                       No.26, Oliver Road,
                       Mylapore,
                       Chennai 600 004.

                     3.Mr.S.Arunachalam,
                       Member Arbitrator,
                       Plot No.59, 3rd Street,
                       Sowmya Nagar,
                       Medavakkam,
                       Chennai 600 100.

                     4.Mr.G.Sivakumar,
                       Member Arbitrator,
                       W-672-2A, East Main Road,
                       Anna Nagar, West Extension,
                       Chennai 600 101.
                                                                                          ... Respondents

                                  Arbitration Original Petition filed under Sections 14(1)(a)(2), 14(2)
                     and 15(2) of the Arbitration and Conciliation Act, 1996 to declare that the
                     mandate of the second, third and fourth respondents as terminated in respect
                     of the arbitration proceedings between the petitioner and the first
                     respondent, which is referred to as the UAA-01, Reference 3 Arbitration
                     comprising of Claims 8A to 8D filed by the first respondent and the counter
                     claim filed by the petitioner and consequently, substitute the second, third
                     and fourth respondents with other Arbitrators as per the terms of the
                     contract.


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                                                                                   Arb.O.P (Com.Div.) No.371 of 2022



                                        For Petitioners     : Mr.S.Arjun Suresh
                                                              of M/s.Dua Associates

                                        For Respondents : Mr.Masilamani, Senior Counsel
                                                          for Mr.Anirudh Krishnan for R1

                                                             Mr.N.L.Rajah, Senior Counsel,
                                                             for Mr.Sai Sudharsan Sathiyamoorthy,
                                                             for R2 to R4
                                                               ******


                                                               ORDER

The instant Arbitration Original Petition has been filed under Sections

14(1)(a), 14(2) and 15(2) of the Arbitration and Conciliation Act, 1996

(hereinafter called as "the Act") to terminate the mandate of the

respondents 2, 3 and 4 as terminated in respect of the arbitration

proceedings between the petitioner and the first respondent and

consequently, to substitute the respondents 2, 3 and 4 with other Arbitrators

as per the terms of the contract.

2. The brief facts of the case are as follows:

2.1 The petitioner is a Special Purpose Vehicle (SPV) with equal

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share holding of the Central Government and the State Government of

Tamilnadu, that is 50% each. It had quoted a tender for design and

construction of five underground stations from Washermenpet to Egmore,

with a shaft at May Day Park along with associated Tunnels for a value of

Rs.1566.81 Crores in which the first respondent emerged as a successful

bidder. The contract was awarded to the first respondent pursuant to this

tender and the same was referred as contract “UAA-01”.

2.2. There was several disputes between the petitioner and the first

respondent and one such set of disputes were referred to the Tribunal

comprising of respondents 2 and 4 wherein the first respondent was

claimant and the petitioner was the respondent in the arbitration

proceedings. The third respondent was substituted pursuant to the demise

of the erstwhile nominee Arbitrator of the first respondent. Hence the

Tribunal comprise of respondents 2, 3 and 4 (Arbitral Tribunal – AT), who

are the technical members.

2.3. Subsequent to the reference of the dispute, the first respondent,

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who was the claimant, filed a claim statement and the petitioner also filed

the counter claim. The claim was filed by the first respondent in the year

2021 and the petitioner filed the counter claim on 07.01.2022.

Subsequently, the issues were framed.

2.4. On 14.05.2021 vide its minutes, the AT had unconditionally fixed

its fee at Rs.1,00,000/- per session. This was on the basis of what was

agreed to by the parties during the hearing/meeting whose representatives

were also present.

2.5. Under these circumstances, the AT revised its fees from a sum of

Rs.1,00,000/- to a sum of Rs.2,00,000/- per session per Arbitrator.

According to the petitioner, this is a case of not merely fixing exorbitant fee,

but a more serious case of unilateral revision of a fee that was already

agreed to earlier by the parties and the AT. This unilateral revision in fee

was objected to by the petitioner on 08.07.2022. The first respondent

also filed a memo on 10.07.2022, to keep the revision in fee in abeyance,

considering that the Hon'ble Supreme Court would pronounce an order in

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a separate and distinct case in which the first respondent is a party.

However, the AT vide its e-mail dated 24.07.2022 reiterated its demand for

the revised fee. Thereafter, the first respondent had communicated the AT

vide e-mail dated 28.07.2022, with a copy to the petitioner, that its share of

the revised fee has been remitted by it on 25.07.2022. Hence, the petitioner

filed the present petition under Sections 14 and 15 of the Act.

3. Mr.Arjun Suresh, learned counsel of M/s.Dua Associates, who is

appearing for the petitioner, submitted that the mandate of the Arbitrator is

liable to be terminated due to the following grounds:

(i) The parties have agreed to fixing of fee at Rs.1,00,000/- per session per Arbitrator vide its minutes dated 14.05.2022, unless and otherwise if both the party have agreed, the AT cannot revise the fee on its own. In the present case, unilaterally the AT revised its fees without the consent of the parties from a sum of Rs.1,00,000/- to Rs.2,00,000/-;

(ii) The petitioner has filed an affidavit dated 08.07.2022 wherein he has categorically stated that the fee as fixed by the AT on 01.07.2022 is not acceptable considering that it is contrary to the earlier fee fixed, exorbitant and contrary to the IV Schedule of the Act;

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(iii) In spite of the objection affidavit filed by the petitioner, the respondents 2 to 4 reiterated their demand for the revised fee vide e-mail dated 24.07.2022. Though the request was made by the petitioner that they are not in agreement for the revised fee, without considering the same, the AT had reiterated the revision of fee;

(iv) The first respondent vide e-mail dated 28.07.2022, communicated the AT with a copy to the petitioner that its share of revised fee has been remitted by it on 25.07.2022. The payment of the revised fee by one of the parties would prejudice the Arbitrator against the other party, who has not remitted the revised fee. Further, due to the said payment, the bias that would also operate against the petitioner, considering the unilateral revision of fee by the AT.

4. Therefore, the learned counsel for the petitioner contended that

suo-motto revision of fee is not permissible and the same is against the

agreed terms and conditions of the contract and also contrary to the IV

schedule of the Act. He referred to the judgement of this Court and the

Hon'ble Supreme Court that the suo-motto revision of fees by the Arbitrator

without the consent of the parties is not permissible. The refusal to oblige to

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the request of the petitioner to not to increase the fee originally agreed and

reiterating the revision of fee by the Arbitrator and the unilateral revision of

fee and thereafter, payment of first respondents of his share of fee to the AT,

not only put the petitioner in embarrassing position as it is reluctant to pay

such huge fee but there is also reasonable apprehension of prejudice/bias

that would operate against the petitioner. Therefore, he contend that the

mandate of the AT is liable to be terminated on the ground that the AT is de

jure and is unable to perform its function as required.

5. Further, he would submit that in the instances mentioned in the

Schedules V and VII of the Act, the grounds under which a person to be

appointed as an Arbitrator could not only the grounds to make an Arbitrator

to become ineligible if they are unable to illustrate over and above the

situations and circumstances enumerated under Schedule V and VII of the

Act. On the other grounds also, the Arbitrator are to be appointed will

become ineligible under Section 14 read with Section 15 of the Act. In the

present case, the unilateral revision of fee of the Arbitrator is not a ground

under which an Arbitrator become ineligible under Schedules V and VII of

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the Act. However he would submit that the unilateral increase of fee by the

Arbitrators would be a misconduct, which would fall under the ground that

the AT become de jure and it is unable to perform its function as required

under Section 14 of the Act. Thereby, the mandate of the Arbitrator is liable

to be terminated. In support of this submission, the learned counsel for the

petitioner referred the following judgements of the Hon'ble Supreme Court:

(i) National Highways Authority of India vs. Gayatri Jhansi Roadways Limited with Gammon Engineers and Contractors Private Limited vs. National High Ways Authority of India, reported in (2020) 17 SCC 626;

(ii) Madras Fertilizers Limited vs. SICGIL India Limited and others, reported in 2010 (2) CTC 357;

(iii) Government of Tamil Nadu vs. VDB Projects (P) Limited and others, reported in 2020 SCC OnLine Mad 15241;

(iv) Clarke Energy India Private Limited vs. SAS EPC Solution Private Limited and others, reported in MANU/TN/8781/2021;

(v) National Highways Authority of India vs. Gammon Engineers and Contractor Private Limited, reported in 2018 SCC OnLine Del 10183;

(vi) Union of India vs. Singh Builders Syndicate,

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reported in (2009) 4 SCC 523;

6. Therefore, by referring the aforesaid cases and in view of the above

facts and also in view of the law laid down by this Court and the Apex

Court, the learned counsel for the petitioner submitted that the mandate of

the Arbitrator is liable to be terminated.

7. On the other hand, Mr.G.Masilamani, learned Senior counsel

would submit that there is no justifiable ground to terminate the mandate of

the Arbitrator under Section 14 of the Act under the ground de jure unable

to perform its function. Except the repetition of word de jure in many

places, the grounds under which the petitioner seeks termination of

Arbitrator is only a flimsy ground to ask to terminate the mandate of the

Arbitrator.

8. The minutes of the meetings dated 01.07.2022 and 24.07.2022

would disclose the valid reason for increase in fee and it does not contains

any word to presume that the Arbitrators will be prejudice/biased if the

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enhanced fee is not paid. Further, regarding the minutes dated 10.07.2022,

the learned Senior counsel would contend that "whether the said order of

Hon'ble Supreme Court would be applicable to this Tribunal or not as it may

be prospective or retrospective" cannot be construed as AT stating that it is

not bound by the order of the Hon'ble Supreme Court as contended by the

learned counsel for the petitioner. The allegations of the petitioner that to

put the petitioner in an embarrassing situation and cause the petitioner to be

prejudice and not to be treated in an impartial manner by the AT, resulting

in the AT to become de jure unable to perform its functions as required is

concerned, the said allegations does not directly and specifically attribute

any prejudice or bias to the Tribunal. The petitioner without any tangible

basis, assume AT will be prejudice and not able to treat the petitioner in an

impartial manner and thereby AT to become de jure and unable to perform

its function is not correct. It is only a vague assumptions and suspicion

against the AT. Therefore, he would submit that on this flimsy reasons,

unfounded allegations and suspicion, the mandate of the AT cannot be

terminated.

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9. The learned Senior counsel further contend that the Tribunal

consist of only Engineers in the cadre of serving or retired chief engineer.

The petitioner in its affidavit dated 08.07.2022, while opposing the

enhanced fee of Arbitrator, only stated that enhanced fee is not acceptable to

the petitioner, since the same is contrary to the earlier fixed fees, exorbitant

and the contrary to the IV schedule of the Act, but did not point out any

judgements that AT has no power to fix its fees unilaterally without consent

of the parties to the dispute. Therefore, he would submit that revising the fee

and reiterating the same for reasons mentioned cannot be found fault to that

extent of leading to termination of the mandate of the Tribunal. He would

further submit that the petitioner has also raised an issue pertaining to the

payment of the revised fee by the first respondent to the members of the AT

and thereby he has raised an issue that the AT will be prejudice/bias against

the petitioner, for this, he would contend that merely the payment or

remittance of the enhanced fee by itself cannot be construed/presumed as

evidence for proving that the AT would be prejudice/biased against the

petitioner and such a presumption is far-fetched and not justified to

terminate the mandate of the AT. In the entire body of the petition, he has

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not made any allegation of bias against the AT and the allegations made in

the paragraph No.34 of the petition did not satisfy any ground mentioned in

Schedule V relating to independence or impartiality of Arbitrator as

mentioned in Section 12(3) of the Act or Schedule VII of the Act mentioned

grounds for making the Arbitrator ineligible as stipulated in Sections 12(5)

of the Act.

10. The learner Senior counsel submitted that the bias or prejudice is

a state of mind and no tangible, definite and acceptable material

circumstances are pleaded and evidence placed before this Court to arrive at

the extreme and fatal decision, to terminate the AT, on a finding that the

mind of the AT should be considered biased or prejudiced. In the absence of

the pleadings, evidence and proof, AT cannot be sought to be terminate, at

the stage of cross examination of witnesses of the claimant.

11. Further, he submit that the members of the AT have been

impleaded as parties to this arbitration original petition and they have filed

their affidavit stating as follows:

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1) They are willing to do the arbitration proceedings with the originally agreed fees as per the Judgement of the Hon'ble Supreme Court.

2) They will discharge their duties as an independent and impartial Arbitrator in deciding the disputes.

12. By referring the said affidavit, the learned Senior counsel

submitted that there are no justifiable reasons and circumstances shown to

reject the solemn statement of each of the Arbitrator that they will act

independently and impartially on deciding the disputes. Therefore, the

alleged controversy specified under Section 14(2) of the Act do not remain

but stand effaced and consequently the petition is a liable to be dismissed.

13. Further he would submit that in view of the subsequent events,

that is the objections of the petitioner regarding enhanced and revised fees is

no longer subsist as the AT has agreed to do the work with the mutually

agreed fee structure. Thus, the apprehension of the petitioner regarding the

independence and impartiality has been removed by the solemn statement of

the AT. Therefore, there is no cause of action for the termination of the AT.

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14. In addition to the above, the learned senior counsel also contend

that the preceding Arbitrator of this Tribunal is also preceding Arbitrator in

other Tribunals, where the petitioner and the first respondent are also the

parties with regard to the different contracts and another member of this

Tribunal is also a member of five other Tribunals. All the said Tribunals

relate to the same contract between the same parties. Therefore, the

dismantling/termination of this AT on the ground either the Arbitrators are

ineligible to be Arbitrators or they lack independence and impartiality or

they are prejudiced against the petitioner will cause reflection on the said

Arbitrators in the other tribunals. The petition to terminate the Tribunal is

only intended to delay and defeat the various claims of the respondent, for

work done and completed, now pending before six ATs. Therefore, he

contend that this petition may be rejected with cost and in support of this

contention, he referred to the following three judgements on the aspect that

merely repeating the words in a Statute in the petition will not amount to

proper statement of facts:

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(i) Public Joint Stock Company Power Machines-Ztl, Lmz, Electrosila, Energomachexport vs Bharat Heavy Electricals Limited, reported in MANU/DE/0327/2017

(ii) Mahagun (India) Pvt. Ltd. vs. Infiniti Retail Limited, reported in 2011 SCC OnLine Del 2364

(iii) Union of India (UOI) vs. Supriya Kumar Saha, reported in 2011 SCC OnLine Cal 3546.

15. Mr.N.L.Rajah, learned Senior counsel, who is appearing on behalf

of the members of the AT, that is respondents 2 to 4, would submit that

initially the AT increased the fee from a sum of Rs.1,00,000/- to

Rs.2,00,000/- and it has also reiterated the said fee. However subsequent to

the judgement rendered by the Hon'ble Supreme Court in Oil and Natural

Gas Corporation Limited vs Afcons Gunanusa JV reported in 2022 SCC

OnLine SC 1122 (hereinafter called as “ONGC judgement”) on 30.08.2022,

the AT has agreed for a sum of Rs.1,00,000/- for each Arbitrator per sitting.

Further, he would contend that in this regard all the three Arbitrators have

filed a separate affidavit dated 15.09.2022 before this Court stating that they

are agreed for a sum of Rs.1,00,000/- (old fee) as agreed by both the parties

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and further they undertake to discharge the duty as an independent and

impartial Arbitrator in deciding the dispute along with other Arbitrators.

Hence, he would submit that no element of bias can be attributable to the

Arbitrator and further he reiterated the averments contained in the affidavit

of the said Arbitrator for the consideration of this Court, apart from

reiterating the averments made by Mr.G.Masilamani, learned Senior counsel

appearing on behalf of the first respondent.

16. Heard the learned counsel for the petitioner, Mr.G.Masilamani,

learned Senior counsel for the first respondent and Mr.N.L.Rajah, learned

Senior counsel appearing on behalf of the members of AT, that is

respondents 2 to 4.

17. Originally the AT was constituted on 07.05.2021 with the second

and third respondents and one Mr.Sridharan. On 14.05.2021, the first and

preliminary meeting was conducted and all the parties and the counsel were

present. The AT fixed the fee at a sum of Rs.1,00,000/- per session for each

of the Arbitrators as per the Clause No.12 of the minutes. The parties have

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also agreed for the said fees unconditionally. On 12.08.2021, owing to the

demise of Mr.Sridharan, the first respondent appointed the 4th respondent

as the Arbitrator. Thereafter, the pleadings were completed and the

admission and the denial of documents were submitted by the parties on

09.04.2022. By virtue of the minutes of the 8th meeting dated 13.04.2022,

the Tribunal decided to proceed with the adjudication of claim Nos.8B and

8C of the first respondent and the counter claim of the petitioner. On

13.05.2022, the Hon'ble Supreme Court disposed of the Special Leave

Petition with respect to the issue of Bank guarantee observing that the

Tribunal had attempted to balance the interest on both the parties, further

the Hon'ble Supreme Court directed the AT to dispose of the case within a

period of four months from the date of the said order. On 06.06.2022, that is

on 9th meeting of the Tribunal, a hearing was scheduled and Tribunal made

a tentative schedule to complete the arguments for claim Nos.8B and 8C of

the first respondent and the counter claim of the petitioner. According to the

schedule, the argument were to be completed by 26.07.2022.

18. Under these circumstances, at the 10th meeting held on

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01.07.2022, the second to fourth respondents increased the sitting fee from

Rs.1,00,000/- to Rs.2,00,000/-.

19. Immediately after increase of the said fee, the petitioner filed the

objections to the revision of the fees as indicated by the AT vide affidavit

dated 08.07.2022. It is relevant to extract the main contents of the

affidavit, which states hereunder:

“(1) I am the Chief General Manager (Arbitration and Contract Management) and authorised signatory of the respondent and as such, well-versed with the facts of these proceedings. I am therefore competent to swear tto the contents of this affidavit.

(2) The present affidavit is filed in light of the learned Arbitral Tribunal's last direction dted 01.07.2022 with regard to the enhanced fee payable by the parties to the dispute viz “each of the arbitrators shall be paid a sum of Rs.2,00,000/- per sitting of 3 hours of part thereof”.

(3) At the preliminary hearing held on 14.05.2021, the Hon'ble tribunal was pleased to fix a hearing fee of Rs.1,00,000/- per arbitrator per session. Subsequent thereto, the pleadings were completed by 31.03.2022. In these circumstances, the learned Tribunal had decided to take up

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claims 8B and 8C of the claimant and the respondent's counter claims alone for trial, and decided to take up the claimant's other claims viz claims 8A and 8D later.

(4) Accordingly the Hon'ble Tribunal framed issues in respect of claims 8B and 8C as well as the respondent's counter claims alone on 06.06.2022 and tentative timelines were fixed for trial and oral submissions. On the request of the respondent, the learned tribunal re-scheduled the trial and oral submission dates and the same was informed by the learned tribunal on 01.07.2022.

(5) It is pertinent to state that in the e-mail dated 01.07.2022, the learned tribunal has revised the arbitrator's fee to Rs.2 lakhs per session (from the fee of Rs.1 lakh per arbitrator per session, as fixed earlier). In this regard, the respondent respectfully submits that the fee fixed is not acceptable to the respondent considering that it is contrary to the earlier fee fixed, exorbitant and contrary to the fourth Schedule of the Arbitration and Conciliation Act, 1996 amongst other reasons. This is more significant, especially considering the fact that the learned tribunal had decided to only proceed with 2 of the 4 claims of the claimant as of now.

(6) At this juncture it is pertinent to point out that in

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the email dated 01.07.2022, the learned Arbitral Tribunal has indicated that each session will comprise of 3 hours or part thereof. Further, the said minutes state that the hearings will be held between 3.30 pm and 8 pm i.e.,4.5 hours on the days of the hearings. In effect, it appears that the learned Arbitral Tribunal has fixed two sessions per day i.e., 3 hours + 1.5 hours which, if the fee indicated in the email dated 01.07.2022 is applied, would amount to Rs.4 lakhs per day. This would further cause hardship to the respondent.

(7) It is submitted that, as until date, the respondent, pursuant to the earlier direction of the learned Tribunal [dated 15.04.2021] has remitted Rs.3,50,000/- to each of the learned Arbitrators' aggregating to a total of Rs.10,50,000/- with respect to the learned Arbitral Tribunal. In this regard, it is submitted that the learned Arbitral Tribunal may be pleased to fix its fee based on the Fourth Schedule of the Arbitration and Conciliation Act, 1996.

(8) It is submitted that the respondent being a joint venture of the Central Government and the State Government and the caters to the interest of the public at large, the payment of such exorbitant fee per sitting of the learned Arbitrator [as proposed by the learned Arbitral Tribunal] would be highly unjustified especially given the

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fact that the respondent is dealing with monies of the public exchequer.”

20. After the filing of aforesaid affidavit dated 08.07.2022, the

claimant/first respondent herein has filed a memo dated 10.07.2022, which

is extracted hereunder:

“1.The issue regarding the standard of fees interalia the revision of fees during the course of the arbitral proceedings, applicability of the Schedule IV of the Arbitration and Conciliation Act, 1996, is sub-judice before the Hon'ble Supreme Court as a batch matter. It is pertinent to mention that Afcons Infrastructure Limited is one of the parties to the said matter pending before the Hon'ble Supreme Court. The claimant submits that the matter was concluded on 11.05.2022 and the judgment has been reserved by the Hon'ble Supreme Court.

2. Consequently, the claimant anticipates that the Hon'ble Supreme Court would provide appropriate diretion on all the matters related to fees of the Arbitral Tribunal.

Therefore, the claimant humbly requests the Hon'ble Tribunal to consider the direction dated 01.07.2022

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modifying the fee to be kept in abeyance until the outcome of the decision of the Hon'ble Supreme Court.”

21. A perusal of the averments made in the affidavit makes it clear

that the petitioner has expressed his objections for increasing the fee as

exorbitant. Apart from that, he has not stated anything about the bias or

prejudice against the petitioner by the Arbitrator. He is only concerned

about the increasing fee and therefore he had made an objection and if the

Arbitrator would have revised their fees immediately acceding to the request

of the petitioner, there would be no issues before this Court for the

termination of the Arbitrator. As on date of filing the said affidavit on

08.07.2022, the petitioner had not raised any issues of bias or prejudice

against the Arbitrator but for the first time, in the petition dated 10.08.2022,

the following averments were made:

“.............Without prejudice to the fact that fee now demanded being unreasonable and contrary to what was agreed, the payment by one party and not by the other would

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put the petitioner in an embarrassing situation and cause the petitioner to be prejudice and not be treated in an impartial manner by the learned AT, resulting in the learned AT to become de jure unable to perform its function as required.

Recently, the AT had also directed the petitioner to provide dates for conducting the cross examination of the respondent's witnesses with regard to the petitioner's counter claim.”

22. Except the above averments in the petition, no word stated

anything about to make route to ground for bias or for prejudice attributable

to the Arbitrator. The petitioner has merely stated that the payment by one

party and not by other will put the petitioner into embarrass situation and

cause the petitioner to be prejudice and not be treated in an impartial

manner. This is the only main ground under which the petitioner seeks this

Court to terminate the mandate of the Arbitrator on the ground to de jure

unable to perform its function as required. When the fee was increased, the

request made by the petitioner before the Tribunal by virtue of an affidavit

dated 08.07.2022 was that to not to revise the fees except that he has not

made any allegations with regard to the bias or prejudice and thereafter,

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even the first respondent also filed a memo dated 10.07.2022 requesting the

AT to keep in abeyance of the decision to modify the fee until the outcome

of the decision of the Hon'ble Supreme Court. Thereafter, the Tribunal has

refused to revise its fees and the same was indicated through its minutes of

the meeting dated 24.07.2022. Therefore, both the petitioner and the first

respondent are on the same position with regard to the increase of the fees

up to 24.07.2022.

23. Now the first respondent has remitted its fees on 25.07.2022 and

the same was communicated to the AT by e-mail dated 28.07.2022.

Therefore, the petitioner took a stand stating that in the event of payment of

revised fee by one party and non-payment of other party would put the

petitioner in embarrassing situation and cause the petitioner to be prejudiced

and not to be treated in an impartial manner by the learned AT, resulting in

learned AT to become de jure unable to perform its functions as required.

24. When the matter stood thus, the Hon'ble Supreme Court rendered

its judgement in ONGC judgement with regard to fixation of fee holding

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that the Arbitrator cannot revise the fees unilaterally. Therefore, subsequent

to the said judgement, all the Arbitrators have filed separate affidavit before

this Court stating as follows:

“(i) I am the second respondent in the above petition. As per the directions of the Hon'ble High Court, Madras in its Judgement dated 24.03.2021, the petitioner and the first respondent referred certain disputes to the orbital Tribunal wherein I am the presiding Arbitrator and the 3rd and 4th respondents are the Member Arbitrators.

(ii) I have perused the affidavit filed in support of the above petition dated 12.08.2022 received on 29.08.2022 and the counter affidavit of the first respondent dated 13.09.2022 received on 14.09.2022. At the outset, being an arbitrator, I am not inclined to go into the averments made by both the parties. However, I would like to clarity the apprehensions, and place my statements on record before this Hon'ble Court.

(iii) The Arbitral Tribunal in the preliminary meeting held on 14.05.2021 with the consent of the parties fixed Rs.1,00,000/- as fees and fixed schedule for submission of pleadings and further hearings. The first respondent

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submitted the statement of claim along with the supporting documents on 31.08.2021. The petitioner submitted its statement of defence and its counter claim along with supporting documents on 05.01.2022. Both the parties decided to examine the fact witnesses and the expert witnesses and filed their affidavits along with voluminous of additional documents.

(iv) At this juncture, considering the complexity of the claims, counter claims, and volume of the documents filed by the parties, the tribunal increased the renumeration of each arbitrator by an additional sum of Rs.1,00,000/- per sitting which was to be shared equally by both the parties. The petitioner vide its letter dated 08.07.2022 expressed its difficulties for revision of fees. The first respondent in their memo dated 10.07.2022 brought to the notice of the tribunal about a case pending before the Hon'ble Supreme Court relating to fee issue and requested to defer the issue till the disposal of the said case. The tribunal, in the minutes of meeting dated 24.07.2022, instructed the parties to pay the revised fee for the reasons stated therein.

(v) The Hon'ble Supreme Court in the matter Oil and Natural Gas Corporation Limited vs Afcons Gunanusa JV had decided the issues relating to fee of Arbitrator in its

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judgment dated 30.08.2022. Since the said judgment is binding on the tribunall and the parties, I am acceptable to Rs.1,00,000/- as Arbitrator fee as already agreed by the parties.

(vi) I state though both the parties had reservation in the matter of revision of fee, I wish to state that it would not create any prejudice on any of the party. I hereby assure that I will continue to discharge my duty as an independent and impartial arbitrator in deciding the disputes along with other Arbitrators. Hence, the parties need not have any apprehensions. I further state that I have been Arbitrator in more than 18 Arbitration matters, out of which as a Presiding Arbitrator in 9 Arbitration matters. Till date, there have been no allegations of bias made against me.

(vii) I submit that I have no prejudice on any of the parties and only insist the parties to extend their cooperation to conclude the proceeding expeditiously.”

25. A perusal of the averments in the affidavit made it clear that the

Arbitrators have agreed for a sum of Rs.1,00,000/- as Arbitrator fee as

already agreed by the parties. Further, they have stated at paragraph No.6,

that “though both the parties had reservation in the matter of revision of

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fee, I wish to state that it would not create any prejudice on any of the

parties”. Therefore, the learned Arbitrators stated that they would continue

to discharge the duty as an independent and impartial Arbitrator in deciding

the dispute along with the other Arbitrators. Further, it is clear that in the

Arbitrators' mind, it is not only the revision of fee was objected by only the

petitioner but it was objected by both the parties, which is clear from the

affidavit filed by the Arbitrator. In the present case, up to 24.07.2022, the

parties were in the same position. Only subsequent to 24.07.2022, the first

respondent paid the revised fee. However the petitioner had not paid the

revised fee and the same continued up to 30.08.2022, for a period of 36 days

approximately. Thereafter, after the judgement of Hon'ble Supreme Court,

the Arbitrators have revised their fee to the original fee of Rs.1,00,000/- per

Arbitrator. Therefore, subsequent to 30.08.2022, the issue of non-payment

of fee would not arise. Even when the Arbitrator filed their affidavit, they

have stated that both the parties had reservation in the matter of revision of

fee and they have not mentioned anything about only the petitioner. It is

admitted fact that both the parties have originally make opposition for the

revision of fees.

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26. In the ONGC judgement at paragraph No.229, the Hon'ble

Supreme Court has also observed as follows:

“............ In all fairness, it must be stated that

Mr.K.K.Venugopal, learned Attorney General for India,

had accepted this legal position, and I quote... “this of

course would indicate that no ground of bias can be

raised if the Arbitrator directs one party to pay the fee

payable by the party, in case the other party is not

prepared to pay the fee. No question of bias would arise.”

27. In the present case, one party has not paid the fee and other party

has paid the fee. Even in the situations when the fee which is paid by one

party and not prepared to pay by other party, or even when the entire fees is

borne by one party, the Hon'ble Supreme Court has held that no bias can be

raised. In the present case, temporarily for a period of 36 days, the revised

fee has not been paid by one party and the other party has paid the fee. After

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30.08.2022 Arbitrator has also revised with their own fee. It was not that the

objection for revision of fee was made only by the petitioner but both the

petitioner as well as the respondent. Therefore, I am of the considered view

that no bias or prejudice can be attributable for the acts of the Arbitrator in

revising the fee, in the present facts and circumstances of the case.