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Report No. 176

2.39.3 Section 84:

Provision proposed permitting rules to be made under section 84 in respect of fee to be fixed for arbitrators (purely domestic arbitration between Indian nationals). Number of suggestions have been made with regard to the fixation of fee, at any rate in respect of purely domestic arbitrations between Indian nationals.

2.39.4 It has been pointed out that in several cases fixation of fee in domestic arbitration, on daily basis or the basis of each session on a day or on hourly basis is resulting in considerable prejudice to the parties particularly when the arbitrations get prolonged over years. The Bombay seminar has brought about some suggestions.

The provision suggested at the Bombay Seminar has been considered by us and we propose a modified version thereof. One method is to allow arbitrators to fix a lump sum. The other is to allow them daily fee basis provided they fix the maximum fee receivable. In either case, any further increase of the fee is to be by the Court only. We recommend the rules to be made on the basis of the following guidelines under section 84:

"(a) At the first hearing of the arbitration proceedings or soon thereafter, the Arbitral Tribunal shall stipulate fees to be charged by the members of the arbitral tribunal.

(b) The fee may be charged by each arbitrator on a lump sum basis covering the entire period up to the passing of the award.

(c) The fee may be charged by the arbitrator on per day or per session on each day or the per hour basis subject to the arbitral arbitrator fixing an upper limit for the total fee payable to him.

(d) Such lump sum as in cl.(a) or upper limit of fee as in cl.(b) shall not be liable to increase by any arbitrator except with the consent of the parties or upon orders to be passed by Courts upon application by all the members of the arbitral tribunal to the Court.

(e) The Court while passing orders under clause (d) will keep in mind the work involved, the time taken, the manner in which the arbitration proceedings have been conducted, the conduct of the parties, the further work involved and the further time required, and other relevant factors. We hope that as and when such rules are made, these will help in regulating the fee and will result in speedy disposal of arbitrations.

2.39.5 Rules are also to be made in respect of particulars to be stated in the Register under Section 31A. It is therefore suggested that a provision for the same may be incorporated in the Act by inserting a new sub section (1A) in section 84 as follows:

"(1A) Without prejudice to the generality of provisions of sub section (1), rules may be made in respect of the following:

(a) the manner in which the fee of the members of the arbitral tribunal may be fixed and the procedure relating thereto;

(b) the other particulars required to be entered in the register under clause (f) of sub-section (4) of section 31A."

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