Since the past two decades, arbitration has become one of the most prominent methods used by the parties for the resolution of disputes. However, the issues surrounding the fees of the arbitrators have been clouding the adjudication of disputes through arbitration, by making the arbitration process extremely costly for the parties.
In regard to the fees, the Arbitration Act, of 1940 (1940 Act) provided that once the Award is prepared and signed, the arbitrator has to inform the parties about the fees and charges payable for the arbitration. Subsequently, the Arbitration and Conciliation Act, 1996 (1996 Act) came into force repealing the earlier Act, and the Arbitral Tribunal was given power to determine fees. A need was then observed for laying standard rules for the determination of fees, which was attempted by the Legislature vide Arbitration and Conciliation (Amendment) Act, 2015 (2015 Amendment) through the introduction of the Fourth Schedule in the Act. The Act was once again amended in 2019 through the Arbitration and Conciliation Act (Amendment) Act, 2019 (2019 Amendment) for substitution of section 11 (14), but the ambiguities still persisted. Recently, the Supreme Court in ONGC vs Afcons Gunanusa JV has proceeded to lay down the procedure for removing ambiguity in the determination of arbitrators’ fees.
The article aims to delve into the aspect of fees and the issues surrounding it through discussion of laws and precedents in this regard.
Source: Barandbench
