OIL AND NATURAL GAS CORPORATION LTD versus AFCONS GUNANUSA JV

OIL AND NATURAL GAS CORPORATION LTD versus AFCONS GUNANUSA JV

The Court held that arbitrators lack power to unilaterally fix binding fees; fees should be fixed at the inception by agreement or court order, but where no agreement or court order exists the arbitral tribunal may fix a fair and reasonable fee and may demand deposits under s.38 and apportion costs under s.31A; in ad hoc proceedings the Fourth Schedule model fee may be applied as a default; the term "sum in dispute" in the Fourth Schedule is to be applied to claim and counter-claim separately when the Schedule is made applicable; the ceiling at Serial No.6 is Rs 30,00,000 (applying to the sum of base and variable amounts) and applies to each arbitrator, with a sole arbitrator entitled to...

Parties
Petitioner: Oil and Natural Gas Corporation Ltd.; Respondent: Afcons Gunanusa JV
Jurisdiction
India
Judgment Date
30 August 2022
Procedural Posture
Arbitration Petition (civil) No. 05 of 2022 / Final Judgment (supreme Court, Delivered August 30, 2022)
Outcome
Appeals disposed of with directions
Legal Topics
Arbitrators' Fees, Fourth Schedule to the Arbitration and Conciliation Act, 1996, Sum in Dispute, Deposits (advance on Costs), Costs and Apportionment, Lien on Award, Ad Hoc Arbitration, Party Autonomy
Arbitration Civil Procedure Administrative Law Arbitrators' Fees Fourth Schedule to the Arbitration and Conciliation Act, 1996 Sum in Dispute Deposits (advance on Costs) Costs and Apportionment +3 more

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Parties

Oil and Natural Gas Corporation Ltd.

Petitioner

Afcons Gunanusa JV

Respondent

Procedural Posture

Arbitration Petition (civil) No. 05 of 2022 / Final Judgment (supreme Court, Delivered August 30, 2022)

Legal Issues

  1. 1 Whether arbitrators are entitled to unilaterally determine their own fees
  2. 2 Whether the term "sum in dispute" in the Fourth Schedule means the cumulative total of claim and counter-claim or refers to each separately
  3. 3 Whether the ceiling of Rs 30,00,000 in Serial No.6 of the Fourth Schedule applies only to the variable amount or to the total fee

Ratio Decidendi

The Court held that arbitrators lack power to unilaterally fix binding fees; fees should be fixed at the inception by agreement or court order, but where no agreement or court order exists the arbitral tribunal may fix a fair and reasonable fee and may demand deposits under s.38 and apportion costs under s.31A; in ad hoc proceedings the Fourth Schedule model fee may be applied as a default; the term "sum in dispute" in the Fourth Schedule is to be applied to claim and counter-claim separately when the Schedule is made applicable; the ceiling at Serial No.6 is Rs 30,00,000 (applying to the sum of base and variable amounts) and applies to each arbitrator, with a sole arbitrator entitled to...

Court Disposition

Appeals disposed of with directions

Orders

  • Directed constitution of a new arbitral tribunal in Arbitration Petition (Civil) No.05 of 2022 and listed for directions (Court exercised power under Article 142)
  • Held that arbitrators do not have power to unilaterally fix binding fees; fee disputes can be reviewed by courts under s.39