Arbitral Fee under Fourth Schedule Based on Aggregate Value of Claim & Counter-Claim

Case: Jivanlal Joitaram Patel V. National Highways Authority of India

Coram: Chief Justice Vipin Sanghi and Justice Amit Bansal

Case No.: FAO (OS)(COMM) 70/2017

Court Observation: “Sections 31(8) and Section 31A would have no application where the fees of the arbitral tribunal has been fixed by agreement between the parties… Similarly, where the fees has been fixed by the Court in terms of 4th Schedule to the Act, as in the case at hand, Sections 38(1), 31(8) and Section 31A would have no application. The term “sum in dispute” provided in the 4th Schedule to the Act has to be interpreted so as to include the aggregate value of the claims as well as counter claims”.

“The said expression “sum in dispute” used in the 4th Schedule to the Act has to be given its ordinary meaning, to include the total amount of claim made by the claimant, and the total amount of counter claim made by the respondent. We concur with the finding of the Single Judge that the proviso to Section 38(1) of the Act can only apply when the Arbitral Tribunal fixes its own fees, as in the case of most ad hoc arbitrations,”

“The said proviso cannot apply when the fees of the Arbitral Tribunal has been fixed in terms of 4th Schedule to the Act. Therefore, Section 38(1) of the Act and its proviso cannot be resorted to while interpreting the term “sum in dispute”, as occurring in the 4th Schedule to the Act.”

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Keywords

Arbitral Fee, Value of Claim, Counter-Claim