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Report No. 76

8.59. Section .- Recommendation.-

For reasons already stated,1 the scope of section 38 should be extended to an earlier stage, so as to prevent disputes as to the rate of fees of the arbitrator. Following new sub-sections in section 38 should be added:-

"38(4) If in any case an arbitrator or umpire refuses to proceed with the arbitration except on payment of the fees demanded by him, the court may, on an application in this behalf, order that the arbitrator or umpire shall proceed with the arbitration on payment into court by the applicant of the fees demanded, and shall, after such inquiry, if any, as it thinks fit, further order that out of the money so paid into court there shall, at the time specified in sub-section (6), be paid to the arbitrator or umpire by way of fees such sum as the court may consider reasonable and that the balance of the money, if any, shall be refunded to the applicant.

"38(5) An application under sub-section (4) may be made by any party, to the reference unless the fees demanded have been fixed by written agreement between him and the arbitrator or umpire, and the arbitrator or umpire shall be entitled to appear and be heard on any such application.

"38(6) Payment to the arbitrator or umpire of the sum specified in sub-section (4) shall be made at such time as may be specified in the arbitration agreement, or failing such specification, as may be decided by the court:

Provided that pending completion of the arbitration, the court may direct interim2 payment of fees' to the arbitrator or umpire.

"38(7) Where the court has, under sub-section (4), determined the amount offtes, it may, for reasons to be recorded and after giving the arbitrator or the umpire and the parties an opportunity of being heard, revise such determination on completion of the arbitration.

"38(8) If the arbitrator or umpire refuses to accept the determination of the court under sub-section (4), the court may supersede the arbitration agreement."

1. See discussion as to section 14, para. 4.37, supra.

2. As to the expression "interim", compare section 27 (2).

Arbitration Act, 1940 Back

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