Decided on April 22,2019

Vaijayanti Jhawar Appellant
Arun Kumar Jhawar Respondents


- (1.) The Court :- This arbitration petition is for direction of termination of mandate of the Tribunal. Petitioner is respondent in the reference. Mr. Bose, learned advocate appears on behalf of petitioner and submits, reference was compelled by order dated 22nd November,2017. He relies on following sentence in said order of Co-ordinate Bench: "The learned Arbitrator will be free to decide his remuneration in accordance with the Fourth Schedule of the Act of 1996." He submits, claim of claimant is a little more Rs. 1 crore. Fourth entry in Fourth Schedule of Arbitration and Conciliation Act, 1996 would entitle the Tribunal to fees of maximum Rs. 3,40,000/- and, in addition, 25 per cent thereof. His client has already paid far in excess on account of remuneration. His client cannot pay any more and, that is why, Court has been moved to terminate the mandate since position that his client has been compelled and constrained to take, would thereafter cause circumstances to exist that give rise to justifiable doubts as to impartiality of the Tribunal with regard to his client. Mrs. Mukherjee, learned advocate appears on behalf of respondent/claimant and submits, in 15th sitting of the reference held on 22nd September, 2018 there was record of agreement in this regard. She relies on paragraph 5 in the minutes as is reproduced below: "5. It is necessary to refer to one aspect of the proceedings and it is this. After hearing the parties, the tribunal had provisionally determined the arbitrator's fee on 3rd January,2018 at Rs. 5 lakh according to the 4th schedule provisions of the Arbitration and Conciliation Act, 1996. Considering the nature and volume of the work, the parties have reviewed the matter, in consultation with the arbitrator, during the progress of the proceedings. They have felt that it will be fair to pay the arbitrator on a sitting basis and have thus agreed to pay the arbitrator at the rate of Rs. 50,000 per sitting and a consolidated sum of Rs. 2 lakh (to be shared by the parties equally) for the post sitting works related to the preparation of the final award." She submits, her client is also facing hardship in continuing with this arbitration but it has reached a stage when evidence is complete on appointment of accountant earlier made. It is time for arguments and thereafter passing of award, at which stage petitioner has felt purported compulsion to move Court. She submits, there should be no interference in the reference proceeding to its conclusion. Sub-section (14) in section 11 provides for discretion to be exercised by High Courts to frame such rules as may be necessary for purpose of determination of fees of arbitral tribunal and manner of its payment after taking into consideration rates specified in Fourth Schedule. Court put query to petitioner regarding whether there is any provision elsewhere in the Act regarding fixation and payment of remuneration of arbitral tribunal. Nothing was shown to Court. There is no provision that bars parties from agreeing on remuneration of arbitral tribunal and manner of payment. Court does not see said order dated 22nd November,2017 as having put any constraint on, either the parties or the tribunal regarding fixation or further fixation of fees and payment. What is noticed is, the tribunal was left free to decide on remuneration in accordance with Fourth Schedule. This observation in said order was made in context of a provision in Part I of the Act, from which parties have derogated. For reasons aforesaid, no merit is found in this petition and the same is dismissed. (ARINDAM SINHA, J.);

Click here to view full judgement.
Copyright © Regent Computronics Pvt.Ltd.