The High Court of Orissa disposed of two appeals challenging an order setting aside arbitration costs awarded to a contractor. The Court held there was no patent illegality in the award for costs.
ARBA no.31 of 2008 allowed by setting aside the impugned order to the extent appealed; ARBA no.06 of 2009 dismissed.
This page shows the compact analysis of this judgement. The full analysis — procedural history, issue-by-issue holdings with ratio and obiter, advocates, and paragraph-level evidence for every claim — is being added to the record in batches and will appear here when this judgement has been through it.
IN THE HIGH COURT OF ORISSA AT CUTTACK
ARBA Nos.31 of 2008 and 06 of 2009
(Through Hybrid mode)
In ARBA no.31 of 2008 Ranjit Kumar Das …. Appellant -versusSr. Divisional Engineer (North), …. Respondents East-Coast Railway, Khurda Road and others Advocates appeared in this case : For Appellant : Mr. S. S. Satapathy, Advocate For Respondents : Mr. G. Mohanty, Advocate (CGC) In ARBA no.06 of 2009 Union of India and others …. Appellants -versusRanjit Kumar Das …. Respondent Advocates appeared in this case : For Appellants : Mr. G. Mohanty, Advocate (CGC) For Respondent : Mr. S. S. Satapathy, Advocate
CORAM: JUSTICE ARINDAM SINHA
JUDGMENT 13.10.2022
1. Mr. Satapathy, learned advocate appears on behalf of appellant in ARBA no.31 of 2008. Mr. Mohanty, learned advocate, Central Government Counsel appears on behalf of appellants in ARBA no.06 of 2009. Both the appeals have been preferred from order dated 22nd November, 2008 passed
Page 1 of 3
by the Court below in challenge to award dated 10th April, 2007. It appears, Railways was employer and the other party, contractor.
2. Perused impugned order. The controversy between parties appears to be setting aside costs awarded to the contractor.
3. Mr. Mohanty points out from impugned order paragraph 3 that specific point was taken in the challenge that the arbitration costs should have been equally borne by the parties and the arbitrator in awarding costs had thereby caused patent illegality. On query from Court nothing could be shown from the arbitration clause that there was agreement to that effect.
4. Mr. Satapathy demonstrates from the award, paragraph 23 that under clause (b) the arbitrator found arbitration costs to have been Rs.4,84,000/- and had thereupon awarded Rs.2,80,000/-. Clause (b) is extracted and reproduced below.
“(b) The claimant in compliance of Section 31(8) of the Arbitration & Conciliation Act, 1996, has filed a certificate showing Rs.4,84,000/- towards total expenses in this proceeding. In my opinion, the claimant is entitled to the costs of Arbitration to the tune of Rs.2,80,000/- which would be just and proper.”
5. Sub-section (8) in section 31, Arbitration and Conciliation Act, 1996 provides that costs of an arbitration
ARBA nos.31 of 2008 & 06 of 2009 Page 2 of 3
shall be fixed by the arbitral tribunal in accordance with section 31-A. Section 31-A provides, regime for costs. Subsection (2) says, inter alia, general rule is that the unsuccessful party shall be ordered to pay the costs of the successful party. Sub-section (3) says, inter alia, in determining the costs, the tribunal shall have regard to circumstances including whether a party has succeeded partly in the case. Sub-section (4) says, the tribunal may make any order under this section including the order that a party shall pay a proportion of another party’s costs. Sub-section (5) says, agreement between parties regarding costs shall only be valid if it is made after the dispute in question arose.
6. As aforesaid, there is no agreement between the parties regarding costs. A little more than half the certified cost was awarded to the contractor, who was claimant and partly successful in the reference. In the circumstances, there is not apparent any patent illegality in the award for costs.
7. ARBA no.31 of 2008 is allowed by setting aside impugned order to the extent appealed against therein. ARBA no.06 of 2009 is dismissed.
8. Both the appeals are thus disposed of.
(Arindam Sinha) Judge
RKS
ARBA nos.31 of 2008 & 06 of 2009 Page 3 of 3
3 issues framed by the court
Whether the arbitrator causing patent illegality by awarding Rs.2,80,000/ in costs when the certified cost was Rs.4,84,000/-.
Whether an agreement regarding arbitration costs existed between the parties to determine cost allocation.
Whether the High Court should allow the appeal challenging the impugned order setting aside costs awarded to the contractor.
2 provisions across 1 enactments
Ranjit Kumar Das
Sr. Divisional Engineer (North), East-Coast Railway, Khurda Road
Union of India
Arindam Sinha
As recorded by the court registry
Judgements on the same questions, provisions and authorities, from every court
