Full Text
HIGH COURT OF DELHI
Date of Decision: 29.11.2022
19934/2022 POWER GRID CORPORATION OF INDIA LIMITED..... Petitioner
Through: Mr.S.B. Upadhyay, Sr. Adv. with Mr.Pranay Kishore Mishra
& Mr.B.K. Pandey, Advs.
Through: Mr.Aditya Verma & Mr.K.
Rigved Prasad, Advs.
JUDGMENT
1. This petition has been filed by the petitioner under Section 14 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as the ‘Act’) praying for termination of the mandate of the learned Sole Arbitrator in Arbitration Case No. 13/2018; between Deepak Cables (India) Limited (in liquidation) and Power Grid Corporation of India Limited. The petitioner is aggrieved of what it calls a unilateral revision of the arbitral fee by the learned Sole Arbitrator by way of his orders dated 05.08.2021 and 10.11.2021.
2. It is the case of the petitioner that disputes had arisen between the parties in respect of five different contracts. They were pending adjudication before five three-member Arbitral Tribunals. The parties agreed that instead of five three-member Arbitral Tribunals, these disputes be referred to a Sole Arbitrator, albeit in five different arbitration matters. The same were, therefore, referred to the learned Sole Arbitrator in question. By an order dated 20.01.2018, the learned Sole Arbitrator accepted the nomination, and with the consent of the parties, inter alia, fixed the consolidated arbitration fee as Rs.52,50,000/- (Rupees Fifty Two Lakhs and Fifty Thousand Only) to be paid by the petitioner and the respondent as a consolidated fee for all the five arbitrations. Thereafter, due to certain developments and orders passed by this Court, arbitration proceedings in four of those matters stand stayed and cannot proceed.
3. The learned Sole Arbitrator was approached by the respondent for continuation of the fifth matter, that is, the present arbitration case out of which the present petition arises. The learned Sole Arbitrator by the Impugned Order dated 05.08.2021 held that as far as the Counter Claim is concerned, the fee shall be charged separately in accordance with the Fourth Schedule of the Act. With respect to the arbitral fee on the claim of the respondent herein, the learned Sole Arbitrator observed as under:-
4. Before the learned Sole Arbitrator, the respondent stated that the fee should be fixed in accordance with the Fourth Schedule; while the petitioner maintained that the fee of the present arbitration case should be fixed pro rata, that is, 1/5th of the consolidated fee earlier agreed by the learned Sole Arbitrator.
5. By the impugned order dated 10.11.2021, the learned Sole Arbitrator decided to charge the arbitral fee in accordance with the Fourth Schedule of the Act as far as the claim is concerned.
6. Aggrieved of the above orders, the petitioner filed the present petition before this Court.
7. By an order dated 24.01.2022, this Court directed as under:-
8. The petitioner then filed an application, being I.A. 10105/2022, placing on record copy of the orders dated 22.05.2022 and 30.05.2022 passed by the learned Sole Arbitrator, whereby, the learned Sole Arbitrator observed that as the present arbitration case was being taken up separately from the other four arbitration cases that stood referred to him, he was entitled to charge a separate fee for the same. The learned Sole Arbitrator further directed vide order dated 30.05.2022, to suspend the proceedings and the Counter Claim as the parties had not deposited their fee with respect to the same.
9. By an order dated 14.10.2022 passed by this Court, the petitioner was directed to make yet another request to the learned Sole Arbitrator with respect to the subject matter of the present petition.
10. On such request, the learned Sole Arbitrator has now passed an order dated 05.11.2022, which has been placed on record by the petitioner by way of I.A. 19933/2022, inter alia observing that the issue of fee having been determined by the Supreme Court in Oil and Natural Gas Corporation Ltd. vs. Afcons Gunanusa JV, 2022 (12) SCALE, he is ready and willing to re-settle the fee, in both the Claim and the Counter Claim, in accordance with the said judgment and in accordance with the Fourth Schedule of the Act.
11. The learned senior counsel for the petitioner submits that the fee of arbitration having already been settled by mutual consent of the parties by way of an order dated 20.01.2018 of the learned Sole Arbitrator, the learned Sole Arbitrator could not have revisited the said issue merely because the arbitration proceedings in four matters stood stayed by orders passed by this Court. He submits that all five arbitration cases were, in any case, different and had to proceed separately. In spite of the same, the learned Sole Arbitrator fixed a consolidated fee for all five arbitration cases. As four of them cannot now proceed, the learned Sole Arbitrator, at best, could have determined his fee on a proportionate basis, that is, 1/5th of the fee as determined in his order dated 20.01.2018.
12. He further submits that on an earlier occasion, by an order dated 10.03.2019, the learned Sole Arbitrator himself had decided to await the outcome of the writ petitions, wherein the proceedings in the other four arbitration cases have been stayed by this Court. On an application filed by the respondent, this order was recalled by the learned Sole Arbitrator, deciding to proceed further with the present arbitration case; however, this would not justify the learned Sole Arbitrator to revisit the issue of arbitration fee already fixed by him.
13. As far as a separate fee for the Counter Claim is concerned, the learned senior counsel for the petitioner fairly submits that the said issue having already been determined by the Supreme Court in ONGC (Supra), he would not press the said issue any further.
14. On the other hand, the learned counsel for the respondent submits that the consolidated fee was fixed by the learned Sole Arbitrator as five different arbitration cases between the same parties had been jointly referred to him. As proceedings in four of such cases cannot proceed, this left the Arbitrator with a single case, and the Arbitrator was within his rights to determine the arbitral fee for the same. He submits that, in any case, the arbitral fee now being fixed by the learned Sole Arbitrator is in accordance with Fourth Schedule of the Act, and cannot be questioned by the parties.
15. I have considered the submissions made by the learned counsels for the parties.
16. Order dated 20.01.2018, as far as determination of fee by the learned Sole Arbitrator is concerned, reads as under:- “Both the parties and their counsel present agreed and consented to as regards payment of Arbitration Fees to the sole Arbitrator as under:- (1) The sole Arbitrator shall be paid consolidated Arbitration Fees in all five arbitration matters by petitioner and respondent of Rs 52,50,000/- (Rupees Fifty Two Lac Fifty Thousand) each, which shall be paid in instalments in the following manner. Both the parties agreed to adhere to schedule of payment on time:
(i) Rs. 15 lac (Rupees Fifteen Lac) each shall be paid by the petitioner and the respondent at the initial stage of arbitration proceedings
(ii) Rs. 7,50,000 (Rupees Seven Lac Fifty
(iii) Rs. 7,50,000/- (Rupees Seven Lac Fifty parties of the stage of commencement of the evidence.
(iv) Rs. 7,50,000/- (Rupees Seven Lac Fifty parties at the stage of commencement of the arguments.
(v) Rs. 15 lac (Rupees Fifteen Lac) each, would be paid by both parties before passing of the final order.”
17. A reading of the above would clearly show that a consolidated arbitration fees in all five arbitration cases referred to the learned Sole Arbitrator was determined by the learned Sole Arbitrator. There was no mention of any pro rata fee being paid to the learned Sole Arbitrator in case any further development takes place in these five arbitration proceedings, and, if for any reason, any of these references cannot proceed. Four of these arbitration proceedings admittedly stand stayed by orders passed by this Court. It is only the fifth arbitration case, that is the present arbitration case, which is now to proceed. In my view, therefore, the learned Sole Arbitrator cannot be said to have erred in re-determining the arbitration fee in view of such subsequent developments.
18. In any case, the learned Sole Arbitrator has determined his fee in accordance with the Fourth Schedule of the Act. The Supreme Court in ONGC (Supra), as far as such determination is concerned, has held as under:- “105.Conscious and aware as we are that (i) Arbitration proceedings must be conducted expeditiously; (ii) Court interference should be minimal; and (iii) Some litigants would object to even a just and fair arbitration fee, we would like to effectuate the object and purpose behind enacting the model fee schedule. When one or both parties, or the parties and the arbitral tribunal are unable to reach a consensus, it is open to the arbitral tribunal to charge the fee as stipulated in the Fourth Schedule, which we would observe is the model fee schedule and can be treated as binding on all. Consequently, when an arbitral tribunal fixes the fee in terms of the Fourth Schedule, the parties should not be permitted to object the fee fixation. It is the default fee, which can be changed by mutual consensus and not otherwise.” (Emphasis supplied)
19. Though the learned senior counsel for the petitioner is right in his submission, and as also observed by the Supreme Court in ONGC (supra), that the fee payable to the Arbitral Tribunal must be settled at the threshold and cannot be unilaterally revised by the Arbitral Tribunal at a later stage, at the same time, in the peculiar facts of the present case, I find no error in the course adopted by the learned Sole Arbitrator, so as to justify termination of his mandate.
20. The plea of the learned senior counsel for the petitioner that the further proceedings in the present arbitration case stood revived on an application of the respondent, also cannot justify the petitioner’s objection to the re-determination of the fee by the learned Sole Arbitrator. Admittedly, there was no stay on further proceedings in the present arbitration case. The Arbitral Tribunal was, therefore, duty bound to proceed with the present arbitration case in accordance with law.
21. In view of the above, I find no merit in the present petition and the same is dismissed. There shall be no orders as to cost.
22. The pending applications are accordingly disposed of.
NAVIN CHAWLA, J NOVEMBER 29, 2022