Dismissed

Justice Anil Kumar Sinha v. Eastern Railways through Its Chief Administrative Officer

Jharkhand HC8 Nov 2023WPC/369/2020

Case brief

AI extract

What is this about?

The High Court dismissed a writ petition filed by an arbitrator seeking release of unpaid fees charged unilaterally. The court held that arbitrators lack power to unilaterally fix binding fees exceeding the Fourth Schedule guidelines without party consent, as it violates the principle against being a judge in one's own cause. The claim for excess fees was rejected.

What did the court decide?

Claim for release of unilaterally fixed higher arbitral fees is rejected and the writ petition is dismissed.

Justice Anil Kumar Sinha Vs Eastern Railways… — Service and Employment | Jharkhand HC (2023)

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IN THE HIGH COURT OF JHARKHAND AT RANCHI W.P.(C) No. 369 of 2020

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Justice Anil Kumar Sinha, Ranchi

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.... .... …. Petitioner

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Versus

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Eastern Railway through its Chief Administrative Officer, Construction Department, Kolkata

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The Railway Board through its Chairman, Rail Bhawan, New Delhi

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Sr. Law Officer (Head Quarter), Eastern Railway, Kolkata

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Dy. Chief Engineer (Construction), Eastern Railway, DRM Officer, Asansole .... .... .... Respondents

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.... .... .... Respondents

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CORAM: HON'BLE MR. JUSTICE GAUTAM KUMAR CHOUDHARY

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For the Petitioner : Mr. Prashant Pallav, Advocate Mr. Parth Jalan, Advocate For the Respondents : Mr. Anil Kumar, ASGI Mr. Prabhat Kumar Sinha, CGC

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C.A.V. ON: 22.08.2023 PRONOUNCED ON 08.11. 2023

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Instant petition has been filed under Article 226 of the Constitution for direction to release the arbitral fees and the secretarial charges of Rs.6,57,026/- to the petitioner with interest @ 12% per annum.

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Petitioner was appointed as arbitrator vide order passed in Arbitration Application No.12 of 2017, in a dispute between M/s Sahil Projects and Planning Pvt. Ltd., Hazaribag and Eastern Railway through its Chief Administrative Officer, Construction Department, Kolkata to adjudicate the dispute between the parties. By the said order, the learned Arbitrator was given liberty to lay down fees and expenses of arbitration proceeding, keeping into account the principles as contained in Fourth Schedule [under Section 11(14)] of the Arbitration and Conciliation Act, 1996.

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The learned Arbitrator vide order passed on 21.09.2017 fixed the fees in the arbitration proceeding as under:-

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“The Venue of the arbitration shall be my official residence at Ranchi. So far my remuneration is concerned, I shall charge Rs.35,000/- from each party. Besides the secretarial charges @ 10% for each hearing.” Further, vide order dated 28.07.2018, the learned Arbitrator reduced the fees from 21^st sitting onward to Rs.15,000/- from each party on account of fee and secretarial charges payable by them.

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The arbitral proceedings were concluded in 26 hearings for which the total arbitral fees of Rs.8,60,000/- was raised and after deducting Rs.1,54,000/-, balance of Rs.7,06,000/- and Rs.10,000/- as the charges of

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arbitration award was made. After deductions instant Petition has been filed for non-payment of Rs.6,57,026/-.

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It is submitted by learned counsel on behalf of Petitioner that as per the ratio laid down in Oil and Natural Gas Corporation Ltd. Versus Afcons Gunanusa JV, 2022 SCC OnLine SC 1122 Fourth Schedule is only a guideline on the basis of which the arbitral fees is to be fixed by the parties. Here, the order by which the Court fees was paid, remained unchallenged and attained its finality to which respondents are liable to make the payment.

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A counter affidavit has been filed on behalf of respondents-Railways. The claim of fees has been contested mainly on the ground that the fees being charged is not as per the Fourth Schedule and fees has already been paid as per this schedule.

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It is argued on behalf of the Petitioner that, the first date of hearing of the arbitral proceeding was held on 01.09.2017 , and on the very first day the fees was fixed by the learned Arbitrator at Rs 35,000/- and secretarial charges @10%. On 02.12.2017 counsel on behalf of the respondent appeared and intimated that a sum of Rs 77,000 had been sanctioned by competent authority of the Railways and the said amount had been credited in the account of the Petitioner. On 31.03.2018 a preliminary objection was raised regarding payment of fees till the final award was made.

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On 12^th date of hearing on 19.06.2018 of the arbitral proceeding, the Deputy Chief Engineer communicated to the Petitioner the decision of the competent authority to publish the award at the earliest in speedy and at inexpensive cost as observed by the Supreme Court. 9. Under the aforesaid facts and circumstance, matter for consideration is whether the learned Arbitrator was free to unilaterally deviate and fix fee higher than admissible under fourth schedule of the Arbitration Act. 10. This Court is of the view that such a course was not permissible in view of the ratio laid down by Hon’ble the Supreme Court in Oil and Natural Gas Corporation Ltd. Versus Afcons Gunanusa JV , 2022 SCC OnLine SC 1122 wherein it has been held,

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(i) Arbitrators do not have the power to unilaterally issue binding and enforceable orders determining their own fees. A unilateral determination of fees violates the principles of party autonomy and the doctrine of the prohibition of in rem suam decisions, i.e., the arbitrators

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cannot be a judge of their own private claim against the parties regarding their remuneration.

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In the order of appointment of the learned Arbitrator in Arbitration Application No.12 of 2017, it has been clarified that fees and expenses of the arbitral proceeding is to fixed keeping into account the principles contained in Fourth Schedule [under section 11(4) of the Arbitration and Conciliation Act, 1996. Under the circumstance, it was not open to the learned Arbitrator to enhance and fix his arbitral fees in excess of what is provided under the fourth schedule. Mere fixing of higher fees at the first hearing was not sufficient to sustain the claim, as the parties had not mutually agreed to it. Therefore, claim for unilaterally fixed higher fees is not sustainable and is accordingly rejected.

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Writ Petition stands dismissed. Interlocutory Application, if any, is disposed of.

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(Gautam Kumar Choudhary, J . )

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Jharkhand High Court, Ranchi Dated the 8^th November, 2023

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AFR / Anit

Justice Anil Kumar Sinha v. Eastern Railways through Its Chief Administrative Officer

Case brief

What is this about?

What did the court decide?

Justice Anil Kumar Sinha v. Eastern Railways through Its Chief Administrative Officer

Case brief

What is this about?

What did the court decide?

What the court decided

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