Punjab-Haryana High Court
Harshbir Pannu And Anr vs Jaswinder Singh on 18 February, 2026
ARB-357-2023 (O&M) -1-
IN THE HIGH COURT OF PUNJAB AND HARYANA
AT CHANDIGARH
ARB-357-2023 (O&M)
Date of decision: 18.02.2026
Dr. Harshbir Singh Pannu and another
.......Applicantss
V
Versus
Dr. Jaswinder Singh
....Respondent
CORAM: HON'BLE MR. JUSTICE SHEEL NAGU, CHIEF JUSTICE
Present: Mr. Manjit Singh Khaira, Senior Advocate,
(Through Video Conferencing)
with Mr. Manspreet Singh, Advocate,
for the applicants.
None for the respondent.
****
SHEEL NAGU, CHIEF JUSTICE ( Oral )
1. This Court, on the last occasion i.e. 13.02.2026, had afforded another opportunity to the respondent to be represented, as it was found that the respondent, despite being served the notice issued by this Court on 04.02.2026, was not represented.
2. Today, when the matter is taken up, no one appears for the respondent.
3. In view of the above, this Court proceeds to decide the matter on merits.
4. This case has a chequered history, which commences from appointment of a Former Judge of this Court as an Arbitrator, for the first time vide order of this Court dated 02.03.2020. Vide order dated 27.07.2021, the Arbitrator fixed the fee fees with the consent of 1 of 7 ::: Downloaded on - 24-02-2026 20:45:11 ::: ARB-357-2023 (O&M) -2- counsel for both the parties. However, when the parties failed to deposit their respective shares share of the arbitral fee, the Arbitrator terminated the proceedings vide order dated 27.07.2021.. The said decision of the Arbitrator was challenged by petitioner No.1 herein, by filing a writ petition, which was disposed of on 15.02.2023 in view of the decision decision given by the Apex Court in Oil and Natural Gas Corporation Ltd. Vs. Afcons Gunanusa JV, (2024) 4 SCC 481..
Thereafter, the petitioners petitioner herein served a notice upon the respondent invoking the arbitration clause, before filing ARB ARB-357-2023 for appointment of an Arbitrator and for determination of the fee fees to be paid to him. Despite service on the respondent, no response was filed.
Accordingly, this Court appointed Mr. Aman Bahri, Additional Advocate General, Haryana, as Amicus Curiae, to assist the Court.
5. After considering submissions of the rival parties, ARB ARB--
357-2023 2023 was decided on 07.01.2025 in the following terms:
terms:-
"17. From the examination of the above reproduced order, it is clear that the petitioners had served two legal notices upon the respondent. The first notice was sent on 13.09.2017 and by second notice, Annexure P P-9, 9, petitioners invoked the arbitration clause. The earlier petition filed by the petitioners was accepted by the above reproduced order and an Arbitrator was aappointed, ppointed, who had terminated the proceedings vide order, Annexure P P-8.8.
On the basis of the same legal notice dated 03.04.2019, Annexure P-9, petitioners have approached this Court once again for appointment of an Arbitrator under Section 11 of the Arbitration tion Act. Once an Arbitrator already stood appointed pursuant to the legal notice, Annexure P-9, 9, petitioners are debarred from approaching this Court all over again and the present petition is not maintainable.
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18. For the afore-going going reasons, this Court does not find any merit in the petition, which is dismissed with no order as to costs.
19. In the end, this Court records its appreciation for the invaluable assistance rendered by Mr. Aman Bahri, learned Amicus.
20. Pending application(s) application(s), if any, is disposed off."
5.1. Aggrieved by the aforesaid decision, the petitioner petitionerss approached the Apex Court in Civil Appeal No.14630 of 2025 (Harshbir Singh Pannu and another vs. Jaswinder Singh) Singh),, which came to be finally disposed of on 08.12.2025 with the following observations:
observations:-
"416. In the present case, the fees of the entire arbitration had been determined by the Sole Arbitrator in accordance with the Fourth Schedule of the Act, 1996, with the consent of the appellants and the respondent herein.
417. As discussed sed in the earlier parts of this judgment, the decision of this Court in Afcons (supra) held that the fees stipulated in the Fourth Schedule is the model fee schedule, and is binding on all parties. When an arbitral tribunal fixes the fees in terms of the Fourth Schedule, the parties are not permitted to object to the same. At the cost of repetition, we again reproduce the relevant observations: -
"105 Conscious and aware as we are that (i) Arbitration proceedings must be conducted expeditiously; (ii) Cour Courtt interference should be minimal; and (iii) Some litigants would object to even a just and fair arbitration fee, we would like to effectuate the object and purpose behind enacting the model fee schedule. When one or both parties, or the parties and the arbitral itral tribunal are unable to reach a consensus, it is open to the arbitral tribunal to charge the fee as stipulated in the Fourth Schedule, which we would observe is the model fee schedule and can be treated as binding on all. Consequently, when an arbitra arbitrall tribunal fixes the fee in terms of the Fourth Schedule, the parties should not be permitted to object the fee fixation. It is the default fee, which can be changed by mutual consensus and not otherwise."
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418. Once the fees had been determined by the So Sole le Arbitrator in accordance with the Fourth Schedule of the Act, 1996, and the appellants herein had given their consent to the same, it was no longer open for them to refuse to deposit the said amount.
419. If at all, the appellants were facing any finan financial cial difficulty, the correct approach should have been to request the arbitrator to suspend the proceedings in terms of Section 38 sub sub-section section (2) of the Act, 1996 till the time they could arrange the requisite sum.
420. We also do not approve the stance of the appellants insofar as they submitted that they were not in a position to pay the arbitral fees for both the claim and the counter counter-claim, claim, and could pay their share of the fees in respect of the claim alone. This is particularly in view of the fact that hat the respondent herein was willing to pay his share of the arbitral fees for both the claim and the counter claim.
421. As per Section 38 of the Act, 1996, both the contesting parties, namely, the claimant and the respondent, are responsible to bear the he fees of arbitration in equal proportion. However, where either party defaults, the responsibility to pay the fees falls on the other party.
422. Arbitration being a consensual mode of alternative dispute resolution, is built upon procedural self self-responsibility.
nsibility. Section 38 enshrines this principle, by stipulating that each party would be responsible for paying the fees of arbitration for their own claims.
423. A claimant is responsible for his own claims, and thus responsible to pay his share of fees iin n respect of the same.
Likewise, the respondent is responsible to pay the share of fees for his counterclaims. This responsibility extends to bearing the other party's share as well, if the latter declines to pay, at least insofar as their claim or counter-claim, claim, as the case may be, is concerned.
424. In the present case, since the appellants herein refused to pay the requisite fees for their own claims, the arbitral tribunal was left with no other alternative but to terminate the proceedings. Without the requisite deposits being made, there was no possible way for the arbitral tribunal to effectively conduct the hearings. We, therefore, find no infirmity in the order passed by the arbitral tribunal terminating the proceedings.
425. However, we take note of the fact that the present dispute arose all the way back in the year 2020. Five years have gone by. When the proceedings came to be terminated, the position of law as regards the manner in which the fees are to be determined, was in a state of flux and uncertainty.
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ARB-357-2023 (O&M) -5-
426. The aforesaid is evident from the fact that after the arbitral proceedings came to be terminated for the non non-deposit deposit of fees, the appellants promptly preferred a writ petition before the High Court of Punjab and Haryana challenging the validity of the Fourth Schedule of the Act, 1996 and the determination of fees by the Sole Arbitrator in lieu thereof.
427. Even the position of law as regards the termination of proceedings under the Act, 1996 and the consequences that flow therefrom, largely argely remained uncertain.
428. Had the appellants known beforehand, the sanctity and binding nature of the Fourth Schedule of the Act, 1996 and the finality that is attached to an order terminating the arbitral proceedings, perhaps their stance would ha have ve been different before the arbitral tribunal.
429. Thus, in view of the peculiar facts and circumstances of this case, and in order to ensure that the parties are not deprived of any means of adjudication of their dispute, we are inclined to extend one last opportunity to the appellants herein to resolve the same through one another round of arbitration.
430. It has been more than three three-years, years, that the order for termination of the proceedings came to be passed by the Sole Arbitrator. In such circumstances, nces, we are of the view, that this is a fit case for the appointment of a substitute arbitrator to look into both the claims and the counter counter-claims claims filed by the appellants and the respondent, respectively.
431. The substitute arbitrator would be at libe liberty rty to conduct the hearings de novo, with the consent of both the parties, and having regard to the lapse of a considerable amount of time, permit the parties to amend their claims or counter counter-claims, claims, as the case may be, if so required.
432. In the result,, this appeal is partly allowed. The matter is remanded to the High Court for the appointment of a substitute arbitrator.
433. The High Court shall undertake the exercise for appointing an arbitrator within a period of two weeks from the date of receipt of this order.
434. Pending application(s), if any, shall stand disposed of.
435. The Registry shall forward one copy each of this judgment to all the High Courts and one copy shall also be forwarded to the Department of Legal Affairs, Ministry of Law & Justice, Government of India."
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ARB-357-2023 (O&M) -6-
6. From the aforesaid, it is obvious that the Apex Court was of the view that if, the petitioner herein was facing financial difficulty in paying the fee of Arbitrator, then the correct approach should have been to request the Arbitrator to suspend the proceedings in terms of Section 38 (2) Arbitration and Conciliation Act, 1996 (for short, '1996 Act'), which in in the present case was not done.
7. In the present case, it is the contention of learned counsel for the applicant(s) applicant that the claim of respondent was inflated intentionally to render the quantum of fee fees beyond the financial capacity of the petitioner(s).
petitioner
8. In view of the above and the clear findings of the Apex Court about another chance to be given to the rival parties to appoint an Arbitrator to consider the claims and counter claims, it would be appropriate to dispose of the present petition in the following terms:-
(i) This Court appoints Mr. Justice Mohammad Rafiq, former Chief Justice of Himachal Pradesh High Court, residing at House No.7, Bhagat Vatika-1, Vatika 1, Hawa Sarak, Civil Lines, Jaipur 302006, Mobile No.9414055777, as Arbitrator to adjudicate the claims/counter claims between the parties, subject to compliance of statutory requirements under 1996 Act before proceeding ahead.
(ii) This Court vests the Arbitrator with power to first decipher as to the real claim made by both the rival parties and nd thereafter, arrive at a just and fair decision in regard to the quantum of fee to be charged.
(iii) This Court would appreciate if, the quantum of fee is fixed for both the parties with consensus, failing which, the 6 of 7 ::: Downloaded on - 24-02-2026 20:45:12 ::: ARB-357-2023 (O&M) -7-
petitioner or the respondent, as the case may be, are/is always free petitioner(s) to exercise their/his rights under the proviso to Section 38 (2) of 1996 Act.
8.1. Parties are directed to appear before the learned Arbitrator on date, time and place to be fixed by the Arbitrator at her/his convenience.
conveni
9. The Arbitrator is requested to complete the arbitral proceedings as per time limit stipulated u/s 29 29-A of 1996 Act.
10. Any observation made hereinabove is meant merely for passing this order and shall not be construed as expression on merits of the dispute.
11. A request letter along with copy of this order be sent to Mr. Justice Mohammad Rafiq, former Chief Justice of Himachal Pradesh High Court.
( SHEEL NAGU)
CHIEF JUSTICE
18.02.2026
Ajay Prasher
Whether Yes/No
speaking/reasoned
Whether Yes/No
reportable
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