McNally Bharat Engineering Company Limited v. Steel Authority of India Limited

3.6. This Court in Delhi State Industrial Infrastructure Development Corporation Ltd. (DSIIDC) v. Bawana Infra Development Pvt. Ltd.[1] after considering the Rules of several arbitration institutions as well as the judgment of the Supreme Court in Union of India v. Singh Builders Syndicate,[2] held that “sum in dispute” referred to in the Fourth Schedule of the Act shall include both claims and counter-claims, and hence, no separate fee is payable on counter-claims. The said decision has been upheld by the

Division Bench of this Court in the case of Jivanlal Joitaram Patel v. National Highways Authority of India.[3] ON BEHALF OF ICA

4. On the other hand, Mr. Jai Sahai Endlaw, counsel for ICA, makes the following submissions:

4.1. The petition is not maintainable under Section 39(2) of the Act. It is premature and liable to be dismissed as arbitration proceedings are still ongoing and no award has been made as yet. Section 39(2) contemplates that application can be filed only when an award is made, but not delivered to the parties. The said situation has not arisen of yet. Tribunal has merely stated that the matter would come up for framing of issues and for arguments on an application under Section 17 of the Act. Reliance was also placed on the judgment in Janapriya Engineers Syndicate Pvt. Ltd v. Union of India.[4]

4.2. McNally has not disclosed true facts to this Court. The order dated 29th July, 2021 records McNally’s statement that only Rs. 73 lakhs is payable towards Arbitrators’ fee and that the same stands deposited. However, in terms of Rule 31(2), Rs. 1,05,40,350 is payable (Rs. 84,32,280/- towards the Arbitrators’ fee and Rs. 21,08,070/- towards administrative fee). Thus, the petition is liable to be dismissed for McNally’s failure to deposit the stipulated fee.

4.3. The view of Arbitral Tribunal is based on construction of Rule 31(2) read with Rule 37, which is pari materia to Section 31(8) of the Act, in conformity with the Act. It is within ICA’s powers to treat counter-claims separately and charge fee on it.

4.4. The Arbitral Tribunal has rightly distinguished the judgment of this Court in DSIIDC (Supra). Reliance is also placed on the judgment in M/s Chandok Machineries v. M/s S.N. Sunderson & Co.,[5] wherein this Court, while relying on Section 38 of the Act, has held that it is permissible for the Arbitral Tribunal to fix separate amounts of deposits for both claim and counter-claim. The said decision has been followed by this Court in NTPC Limited v. Afcons R.N. Shetty & Co Pvt. Ltd. JV,[6] [hereinafter, ‘NTPC Limited’].

ON BEHALF OF THE AMICUS CURIAE

5. Mr. Manik Dogra, learned Amicus Curiae, assisted the Court by making the following submissions and referring to a compilation of documents and judgments filed by him. His submissions are summarised as follows:

5.1. Although, the general consensus is that the fee of an Arbitrator is fixed collectively on claims and counter-claims, however, it is not uncommon for arbitration institutions to have rules which provide for fee to be paid separately for claims and counter claims.

5.2. To illustrate, he referred to 246th Report of the Law Commission of India, which was entrusted with the task of reviewing the provisions of the Arbitration and Conciliation Act, 1996. Relevant portions whereof are as under:

10. One of the main complaints against arbitrationinIndia,especially adhoc arbitration, is the high costs associated with the same – including the arbitrary, unilateral and disproportionate fixation of fees by several arbitrators.The Commission believes that if arbitrationis really to become a cost effective solution for dispute resolution in the domestic context, there should be some mechanism to rationalise the fee structure for arbitrations. The subject of fees of arbitrators has been the subject of the lament of the Supreme Court in Union of India v. Singh Builders Syndicate, (2009) 4 SCC 523 where it was observed: “[T]he cost of arbitration can be high if the arbitral tribunal consists of retired Judges… There is no doubt a prevalent opinion that the cost of arbitration becomes very high in many cases where retired Judges are arbitrators.The large number of sittings and charging of very high fees per sitting,with several add-ons, without any ceiling,have many a time resulted in the cost of arbitration approaching or even exceeding the amount involved in the dispute or the amount of the award. When an arbitrator is appointedby a court without indicatingfees,either both parties or at least one party is at a disadvantage. Firstly, the parties feel constrainedtoagree towhatever fees is suggestedby the arbitrator, even if it is high or beyond their capacity. Secondly, if a high fee is claimedby the arbitrator andone party agrees topay suchfee,the other party,who is unable to affordsuch fee or reluctant topay such highfee, is put to an embarrassing position. He will not be in a position to express his reservation or objection to the high fee, owing to an apprehension that refusal by him to agree for the fee suggested by the arbitrator,may prejudice his case or create a bias in favour of the other party who readily agreed to pay the high fee.”

11. In order to provide a workable solution to this problem, the Commission has recommended a model schedule of fees and has empowered the High Court to frame appropriate rules for fixation of fees for arbitrators and for which purpose it may take the said model schedule of fees into account. The model schedule of fees are based on the fee schedule set by the Delhi High Court International Arbitration Centre, which are over 5 years old, and which have been suitably revised.The schedule of fees would require regular updating, and must be reviewed every 3-4 years to ensure that they continue to stay realistic.

12. The Commission notes that International Commercial arbitrations involve foreignparties whomight have different values andstandards for fees for arbitrators; similarly,institutional rules might have their own schedule of fees; and in both cases greater deference must be accorded to party autonomy. The Commission has, therefore, expressly restricted its recommendations in the context of purely domestic, ad hoc, arbitrations.”

5.3. Reliance is also placed on the respective fee schedules payable to the Arbitral Tribunal as found across different arbitration institutions viz. Indian Institute of Arbitration and Mediation (“IIAM”), International Centre for Dispute Resolution (“ICDR”), London Court of International Arbitration (“LCIA”), Finland Chamber of Commerce (“FCC”) and Shenzhen Court of International Arbitration (“SCIA”), to submit that every dispute on the issue of payment of fee has to be resolved in view of the rules framed by the institutions.

5.4. The judgment of this Court in DSIIDC (Supra) interprets the fee schedule as provided under the Fourth Schedule of the Act, which was introduced by the Arbitration and Conciliation (Amendment) Act, 2015. The said judgment would not be relevant for the purpose of deciding the issue in the present case, as the ICA has its own rules which provide for payment of arbitration fee and administrative costs.

5.5. The concept of arbitration fee and deposits as provided under Section 38 is different, and therefore, the said provision may not be a guiding factor for determining the question regarding payment of arbitration fee.

REJOINDER SUBMISSIONS

6. In rejoinder, Mr. Vikas Goel distinguished the judgment relied upon by Mr. Endlaw in Janapriya Engineers (Supra) on facts and argued that McNally cannot be left remediless and Section 39(2) cannot be given a restrictive meaning.

7. On the submissions made by the Amicus Curiae, Mr. Goel argued that Rule 37 of the ICA Rules cannot be read as an exception. The reference to the Rules of the arbitral institutions such as those of the IIAM, ICDR, LCIA, FCC and SCIA, is of no consequence. These Rules provide for the payment of arbitrators’ fee and expenses on claims and counter-claims separately, or on the higher of the two, or on the basis ofhourly rates. None of the Rules provide for payment of arbitrators’ fee and administration charges separately for claims and counter-claims respectively. These Rules supports McNally’s case. If Rule 31(2) and Rule 37 are read as inconsistent, Rule 31(2) being the earlier clause will prevail. ICA being the drafter of the Rule, interpretation should be adopted which is against them, applying the doctrine of contra proferentem.

ANALYSIS

8. The short question before this court is whether the arbitration and administrative fee as per ICA Rules is to be calculated on the claim and counter-claim cumulatively or separately; and thus, whether the interpretation given thereto by the Arbitral Tribunal is impermissible, thereby warranting court’s intervention.

9. Since Mr. Goel has placed much reliance on the Fourth Schedule appended to the Act, introduced in 2015, which was subsequently amended with the introduction of Section 31A in 2019, a brief background leading to the introduction of the provision would be apposite. This provision was introduced to obviate the uncertainty of the fee structure – to bring in reasonableness about costs and upfront disclosure. The Fourth Schedule of the Act serves as a model schedule of fee to rationalise the fee structures in arbitrations.[7] However, despite introduction of the Fourth Schedule, ambiguity regarding the fee structure applicable to ad-hoc and institutional arbitration persists, as is evident from the caselaws cited by McNally as well as the Amicus Curiae. In fact, the Apex Court is currently hearing matters where several issues relating to fee structure in arbitrations are being intensely debated.[8] CASE LAWS

10. Under the Fourth Schedule of the Act, fee of the Arbitral Tribunal is calculated on the basis of “Sum in Dispute”. There is some divergence of views in interpreting the term “Sum in Dispute”, i.e., whether each of the claim and counter-claim are to be calculated cumulatively or separately. A coordinate bench of this Court in DSIIDC (Supra), while interpreting the fee schedule provided in the Fourth Schedule to the Act, held that “Sum in Dispute” includes both claim and counter-claim. The Court also held that if Law Commission of India, ‘Amendments to the Arbitration and Conciliation Act 1996’, Report No.246, paragraph no. 12, Chapter II, (August 2014). Order dated08th March 2022in Arbit. Case (C) No. 5/2022titled Oil and Natural GasCorporation Ltd. v. Afcons GunanusaJV, availableat MANU/SCOR/14951/2022. the legislature intended to have the Arbitral Tribunal exceed the ceiling limit by charging separate Arbitrators’ fee and counter-claim amount(s), it would have provided so in the Fourth Schedule of the Act. This decision has been recently approved by the Division Bench of this Court.[9] The High Court at Patna in State of Bihar and Ors v. Bihar State Sugarcane Corporation Ltd. And Ors.10 followed the ratio in DSIIDC (Supra)and also referred to the 246th Law Commission Report to discern the legislative intent of the Fourth Schedule and held that the ceiling of Rs. 30,00,000/- in Entry No. 6 of the Fourth Schedule to the Act is not only on the variable amount of fees to be calculated at the rate of 0.5% of the claim amount, leaving aside the fee amount of Rs. 19,87,500/-, but also on both the base amount and the percentage of claim amount added together. It was further held that the “Sum in Dispute”, as referred to in the Fourth Schedule to the Act, shall include both claim and counter-claim amounts.

11. Another coordinate bench of this Court in Rail Vikas Nigam Ltd. v. Simplex Infrastructures Ltd.,11 while interpreting Entry No. 6 of the Fourth Schedule, observed that even though every entry under “Sum in Dispute” bears an upper and lower limit, however,the usage of the word “plus” in Entry No. 6 after the variable fee component would lead to the conclusion that the ceiling of Rs. 30,00,000/- has been imposed on the variable fee component only, thus, disagreeing with the ratio in Bihar State Sugarcane Corporation Jivanlal Joitaram Patel v. National Highways Authority of India, 2022 SCC Online Del 703. 2020 (6) BLJ 467.

Ltd. (Supra).In Chandok Machineries v. S.N. Sunderson & Co.,12 this Court again analysed the provision in relation to the question of deposit of costs vis- à-vis fee payable by the parties to the Arbitral Tribunal. While referring to Section 38 of the Act, it was held that an arbitral tribunal cannot be faulted with for fixing separate amounts of deposit for claims and counter-claims.

12. In NTPC Limited (Supra), while relying on Chandok Machineries (Supra), this Court has taken has taken a divergent view as propounded by another coordinate bench in DSIIDC (Supra) in the context of Section 38 read with Section 31A of the Act. The Court held that while calculating the ceiling set forth in the Fourth Schedule to the Act, the claims and counter-claims must be calculated separately. The judgment in NTPC Limited (Supra) was challenged in appeal before the Supreme Court.13 Pursuant to orders dated 9th September, 2021, the Supreme Court issued notice, however, it granted the liberty to the Arbitral Tribunal to proceed with the hearing, subject to the outcome of the Special Leave Petition, which is presently pending consideration before the Supreme Court.

13. In NTPC Limited (Supra), the parties agreed that the fees payable to the Arbitral Tribunal was to be in accordance with the Fourth Schedule. The Arbitral Tribunal interpreted the schedule to say that it was entitled to separate fees on the claims and the counter-claims. While upholding the view of the Arbitral Tribunal, the court relied upon cross-referencing in Section 31A and 31(8)of the Act. At this juncture, it would be apt to note the recommendations

13 S.L.P. (C) No. 13426/2021titled NTPC Limited v. Afcons R.N. Shetty and Co. Pvt. Ltd. JV. of the 246th Law Commission Report, in respect of the insertion of Section 31A, wherein it has been observed that the provision primarily concerns itself with the calculation of claims and counter-claims for determination and imposition of costs, and not for fixation of fee as contained in Fourth Schedule. The Supreme Court in NHAI v. Gayatri Jhansi Roadways Ltd.14 has unequivocally held that “It is true that the arbitrator’s fees may be a component of costs to be paid but it is a far cry thereafter to state that section 31(8) and 31A would directly govern contracts in which a fee structure has already been laid down.” Perhaps, this aspect was not brought to the notice of the Courts in NTPC Limited (Supra).

14. Lastly, the Court must also take note of the views of the Division Bench in Jivanlal Joitaram Patel (Supra), wherein all the judgments cited by the parties – including DSIIDC (Supra), Chandok Machineries (Supra) and NTPC Limited (Supra) – were taken note of, and it was observed that there was no inconsistency between the judgment in DSIIDC (Supra) on the one hand and Chandok Machineries (Supra) and NTPC Limited (Supra) on the other.

15. The counsel for McNally has placed reliance upon the afore-noted decisions and the Fourth Schedule, drawing parallels therefrom. However, for reasons elaborated hereinafter, McNally’s hypothesis and enunciation of the law is not found to be persuasive. We have to be mindful that in the instant case, we are concerned with institutional arbitration viz. ICA – which the parties to the present dispute have opted to, by agreement. The parties have voluntarily agreed to go for arbitration under the ICA Rules, and therefore, have chosen to be bound by the said Rules. In the present proceedings, while exercising jurisdiction under Section 39 of the Act, the Court cannot examine the fairness of such Rules. In case McNally is aggrieved by the Rules, their remedy lies elsewhere and they cannot assail the same under the limited scope of the present proceedings.

16. Arbitral institutions – both Indian and International ones – generally charge arbitration fee based on their institutional rules and schedules framed thereunder. A perusal of such rules - brought to the notice of the Court by the Amicus Curie - establishes the general consensus that the fee of an Arbitral Tribunal is fixed on the collective sum of the claim and counter-claim. There is also no doubt that the purpose and intent of setting/ introducing a ceiling limit with respect to the fees of the Arbitral Tribunal would primarily be to rationalise the fee structure, so as to ensure that the costs of arbitral proceedings are transparent and there is a cost-effective solution for dispute resolution. That said, the Supreme Court in National Highway Authority of India v. Gammon Engineers and Contractors Pvt. Limited,15 has held that Fourth Schedule of the Act is not mandatory in determining the fee and the Arbitral Tribunal will be bound by the fee fixed as per the agreement between the parties. Thus, parties are free to agree for the arbitral fee, which, in this case, as per Clause 9.2, is the fee schedule of the ICA. McNally cannot now bind the Arbitral Tribunal to the Fourth Schedule of the Act. For this reason,

McNally also cannot take the benefit of the interpretation given to the expression “Amount in dispute” found in the Fourth Schedule.

17. That apart, there are undoubtedly exceptions to the general rule. Certain arbitral institutions referred hereinabove indeed prescribe specific rules for ascertaining the fee, based on factors such as: a. Considering the claims and counter-claims referred for arbitration separately for the purpose of calculation of arbitrators’ fee; and/or b. Taking the value of the highest monetary claim (in case of a counterclaim) for determining the amount in dispute; and/or c. Considering the time spent by the arbitrator, the size and complexity of the case and any other relevant circumstance.

18. Most of the major arbitral institutions also require that parties furnish some form of advance on costs before the arbitration commences. The advance on costs is a deposit paid by the parties to cover the “Arbitration Fee”. Usually, the advance deposit of the Arbitral Tribunal’s fees is payable in equal shares by the parties. However, in the event counter-claimants prefer to file counter-claim(s), Arbitral Tribunals also have the discretion to fix separate amount(s) of deposit for claim(s) and counter-claim(s). This arrangement gathers more weight in the event the amounts claimed in the counter-claim(s) are much higher than the original claim(s) itself. While the depositing of costs is considered to be a routine exercise, however, as a matter of practice, noncompliance of the same can have far reaching effects on the proceedings – so much so that Arbitral Tribunals may suspend or terminate the arbitration proceedings in respect thereof. Therefore, if ICA’s demand for deposits for the claim and counter-claim independently is based on parameters laid down in the rules, no fault can be found for this Court to intercede, since Rule 37 expressly provides for separating claims and counter-claims while calculating arbitration fee. This specific carve-out, which is absent in the Act as well as in the rules of other arbitral institutions, has to be followed, and therefore, the plea of exorbitant fee cannot be a compelling enough reason for directing the Arbitral Tribunal to deviate from the rules parties have consciously and willingly agreed.

INTERPRETATION OF THE ICA RULES

19. Next, the Court has to only consider if the interpretation of the Rules by the Arbitral Tribunal is wholly incorrect, as canvassed by McNally. On this issue, arguments are hinged on the interpretation of Rules 31(2) and Rule 37 of the ICA Rules, which are culled out hereinbelow for ready reference: Rule 31 (2) - Arbitrator's Fee and Administrative Charges The Administrative fee (of ICA) and Arbitrator's fee (for each arbitrator) may be taken as a composite amount, although fixed separately with regard to the amount in dispute in each case – Amount of Claim and Counter Claim. Rule 37 - The amount of interest,whenever specified, will be included in the claim amount for the purpose of calculationof arbitrator's & administrative fee.Further,claims and counter-claims referredfor arbitrationshall be taken into considerationseparately for the purpose of calculationof arbitrators as well as administrative fee under Sub-Rule 31 (2).

20. The Arbitral Tribunal’s interpretation of the above rules is set forth hereafter: “12. We have considered the submissions (oral and written) of the learned counsel for the parties.

13. In our view, reference to the fourth Schedule to the said Act would be of no help to the Respondents as the same is inapplicable to the present arbitration which, as agreed upon by the parties, is being conducted under the ICA Rules, Hence, what is applicable is Rule 31(2) read with Rule 37 of the ICA Rules. Rule 31(2) sets out, in tabular form, the quantum of the Arbitrator’s fee for each arbitrator and Administrative Charges of ICA in respect of different slabs depending on the Amount of the Claim & Counter Claim. Amount of Claim & Counter Claim Arbitrator’s fee for each Arbitrator Administrative Charges Upto Rs. 5 Lac (Rs.5,00,000/-) Rs. 60,000/- Rs. 45,000/- From Rs.[5] Lac one to Rs. 25 Lac (Rs. 5,00,001 to 2,500,000) Rs.60,000/- plus Rs. 3,000/- per lac or part thereof subject to a ceilingof Rs.1,20,000/- Rs.45,000/- plus Rs.2,250/- per lac or part thereof subject to a ceiling of Rs.90,000/- From Rs.25 Lac one to Rs.[1] crore (Rs.2,500,001 to 10,000,000) Rs.2,400/- per lac or part thereof subject toa ceilingof Rs.3,00,000/- Rs.90,000/- plus Rs.1,800/- per lac or part thereof subject to a ceiling of Rs.2,25,000/- From Rs.[1] crore one to Rs.[5] crore (Rs.10,000,000 to 50,000,000) Rs.3,00,000/- plus Rs.45,000/- per crore or part thereof subject to a ceiling of Rs.4,80,000/- Rs.2,25,000/- plus Rs.33,750/- per crore or part ceiling of Rs.3,60,000/- From Rs.[5] crore one to Rs.10 crore (Rs.50,000,001 to 100,000,000) Rs.4,80,000/- plus Rs.30,000/- per crore or part thereof subject to a ceiling of Rs.6,30,000/- Rs. 3,60,000/- plus Rs.22,500/- per ceiling of Rs. 4,72,500/- Over Rs.10 crores Rs.6,30,000/- plus Rs.24,000/- per crore of part thereof, subject to a ceilingof Rs.30 lac Rs.4,72,500/- plus Rs.18,000/- per thereof,subject to a ceilingof Rs.25 lac Rule 37 of the said Rules provides as under: “Rule 37 The amount of interest,whenever specified,will be includedinthe claim amount for the purpose of calculation of arbitrator’s & administrative fee. Further, claims and counter-claims referred for arbitration shall be taken intoconsiderationseparately for the purpose of calculationof arbitrators as well as administrative fee under Sub-Rule 31 (2).” (Underliningadded) [xx…xxx…xx]

17. The argument that this would amount to chargingthe Arbitrator Fee and Administrative Fee twice over and would, therefore, be wrong, unfair, and exorbitant,is also untenable.The Respondents can neither challenge the quantum of fees stipulatedin Rule 31(2) nor the requirement of Rule 37 that the fees for the Claim and Counter Claim are to be computed separately inasmuch as the parties,of their free will, enteredupon the said Contract and by virtue of Article 9 thereof chose arbitrationunder the ICA Rules.”

21. The above-noted interpretation by the Arbitral Tribunal was founded on the expression “claim and counter-claim” as found in Rule 37 of the ICA Rules. The Tribunal has observed that Rule 37 makes a specific reference to Rule 31(2), and therefore, the Table under Rule 31(2) has to be read in conjunction with Rule 37 – which, in turn, makes it clear that the claims and counter-claims referred for arbitration shall be taken into consideration separately. The Arbitral Tribunal held that just because the expression “amount of claim and counter claim” is mentioned under Column 1 of the Table under Rule 31(2), it does not imply that the sum of the claim and counter-claim has to only to be considered for the fixing of Arbitrators’ fee and administrative charges. Besides, the Tribunal held that the expression used in the Fourth Schedule to the Act i.e., “sum in dispute” is entirely different from the “amount of claim and counter claim” used in Rule 31(2) of the ICA Rules, and therefore, no case of parity was found in the decision of this Court in DSIIDC (Supra).

22. Further, the Arbitral Tribunal also found support in their view by interpreting Rule 38 of the ICA Rules, which distinctly used the expressions as follows: (i) “(…) may require such deposit whether in relation to a claim or a counter claim….” (ii) “(…) the arbitral tribunal shall proceedonly in respect of those claims or counter claims for which the deposits has been duly paid…”

23. McNally contends that the findings of the Arbitral Tribunal are in the teeth of Rule 31(2) and are an incorrect interpretation of Rule 37. However, in the opinion of the Court, the Tribunal’s interpretation is entirely in consonance with the Rules. A plain reading of Rule 37 makes it evident that claims and counter-claims referred for arbitration ought to be taken into consideration separately for the purpose of calculation of Arbitrators’ fee as well as administrative fee under Rule 31(2).

24. Rule 31(2) provides that Arbitrator’s fee (for each Arbitrator) and administrative fee may be taken as a composite amount, although fixed separately, with regard to the amount in dispute in each case. However, in Column 1 of the Table under Rule 31(2), the expression “amount in dispute” is not found. Rather, it uses the expression “amount of claim and counter claim”.

25. Mr. Goel has strenuously argued that the expression found in Rule 37 connotes that Arbitrator’s fee and administrative charges have to be calculated separately, considering the aggregate value of the claims and counter-claims referred to the Arbitral Tribunal and it cannot be read to mean that a second set of Arbitrator’s fee and administrative charges would be payable on the claims and counter-claims respectively. This interpretation cannot be accepted. The expression used in Rule 37 is clear and unequivocal as it stipulates that “claims and counter-claims referred for arbitration” shall be taken into consideration separately. This is for both the components i.e., Arbitrator’s fee as well as administrative fee, but independently on claim and counter-claim amounts. Any other interpretation is not permissible as the clause is not found to be ambiguous.

26. The Court further finds Mr. Goel’s argument regarding the breach of maximum ceiling, to be misconceived. The interpretation of Rule 37, as done by the Arbitral Tribunal, does not render the maximum ceiling provided in Rule 31(2) redundant, as is suggested by Mr. Goel. The maximum ceiling would apply with full rigour on Arbitrator’s fee and administrative expenses on both claims as well as counter-claims, but independently. This can surely not be interpreted to mean that if the ceiling limit has already been breached for the claims, no further amount would be payable on the counter-claims.

27. The Court also does not find that Rule 31(2) and the second part of Rule 37 to be inconsistent or irreconcilable. The same can also not be considered as just clarificatory. Thus, the first provision viz. Rule 31(2) must prevail over Rule 37. These two rules have to be read conjointly and harmoniously.

28. In view of the foregoing, the Court does not find any ground to allow the request made by McNally.

MAINTAINABILITY OF THE PETITION

29. Before parting, the Court must also deal with the contentions urged by ICA qua maintainability of the present petition. On this issue, the impugned order – directing McNally to make the deposit towards Arbitrator’s fee as well as administrative expenses – comes with a condition that the failure to do so would entail consequences stipulated under Rule 28. Therefore, Mr. Endlaw is correct in pointing out that Rule 39(2) would be attracted in cases wherein an award is made by the Arbitral Tribunal, but it refuses to deliver the award except on the “payment of the cost demanded by the Tribunal”.

30. This situation has certainly not arisen. However, in the event of McNally’s failure to pay fee as decided by the Arbitral Tribunal, recourse to Rule 28 can be taken by the ICA and proceedings would continue only in respect of the claims and not the counter-claims. This refusal by the Tribunal to proceed on the counter-claim is akin to refusal to deliver the award except on the “payment of the cost demanded by the Tribunal”. Therefore, the Court cannot narrowly interpret or construe Section 39(2) of the Act to say that the term “delivery of award” would only be in a situation where the award is fullyready and awaits only physical delivery owing to non-payment. For all intents and purposes, this order finally determines the question of deposit of fee as demanded by the Tribunal – which has to be adjudicated upon McNally invoking Section 39(2) of the Act, if so advised. In such circumstances, the Court is not inclined to reject the said petition on the ground of maintainability.

31. The court expresses its sincere gratitude to the able assistance rendered by the learned Amicus.

CONCLUSION & DIRECTIONS

32. For the forgoing reasons, the petition is dismissed. The amount deposited by McNally in terms of the order dated 29th July, 2021, be released in favour ICA. To make good the deficiency, if any, as per the demand raised by the ICA towards Arbitrators’ fee as well as administrative expenses, McNally is granted two weeks from the date of release of this judgment.