Delhi High Court
National Highway Authority Of India vs M/S Tantia Raxaul Tollways Private ... on 9 September, 2022
Author: V. Kameswar Rao
Bench: V. Kameswar Rao
* IN THE HIGH COURT OF DELHI AT NEW DELHI
% Date of decision: September 09, 2022
+ O.M.P. (T) (COMM.) 45/2022, I.As. 6265/2022 & 13050/2022
NATIONAL HIGHWAY AUTHORITY OF INDIA
..... Petitioner
Through: Mr. Parag P. Tripathi, Sr. Adv. with
Mr. Santosh Kumar and Mr. Daksh
Arora, Advs.
versus
M/S TANTIA RAXAUL TOLLWAYS PRIVATE LIMITED
..... Respondent
Through: Mr. Gourab Banerji, Sr. Adv. with
Mr. Anshuman Pande,
Ms. Vishalakshi Singh, Mr. Rakesh
Talukdar, Mr. S. P. Mukherjee and
Mr. Vipul Agarwal, Advs.
CORAM:
HON'BLE MR. JUSTICE V. KAMESWAR RAO
V. KAMESWAR RAO, J. (ORAL)
I.A. 13050/2022 (filed by the petitioner seeking permission to place additional documents on record) For the reasons stated in the application, the same is allowed and the documents A, B and C filed along with the application are taken on record. Application is disposed of.
O.M.P. (T) (COMM.) 45/2022
1. This petition has been filed by the petitioner National Highways Authority of India („NHAI‟, for short) under Section 14 and 15 (2) of the Arbitration and Conciliation Act, 1996 („the Act‟ hereinafter) Signature Not Verified Digitally Signed By:ASHEESH KUMAR YADAV O.M.P. (T) (COMM.) 45/2022 Page 1 Signing Date:09.09.2022 18:17:01 seeking, inter-alia, termination of the mandate of the Arbitral Tribunal („Tribunal‟ hereinafter) and appointment of a substitute Tribunal.
2. According to the petitioner, the Tribunal is de jure and de facto unable to perform its functions, as the fee being charged by the Tribunal is in complete disregard of the agreement between the parties which provides for Arbitration as per the Rules of Arbitration of the International Centre for Alternative Dispute Resolution, New Delhi („ICADR Rules‟, for short). The respondent is a special purpose vehicle incorporated to carry out rehabilitation and upgradation of the Piprakothi-Motihari-Raxaul Section of National Highway (NH) 28A from KM 0.600 to KM 62.064 and for construction of two-lane link road from KM 62.064 to ICP Raxaul Section of the said National Highway in the State of Bihar on Design, Build, Finance, Operate and Transfer (DBFOT) basis.
3. A Concession Agreement („CA‟, hereinafter) was signed between the petitioner and the respondent on April 15, 2011 for two- laning with paved shoulder of Piprakothi to Raxaul Section of NH - 28A from KM. 0.600 to KM. 62.064 in the State of Bihar. Clause 44.3.1 of the CA provided as under:-
"a. Arbitration shall be held in accordance with the Rules of Arbitration of the International Centre for Alternative Dispute Resolution, New Delhi. b. Or such other rules as may be agreed by the Parties and shall be subject to the provisions of the Arbitration Act.
c. The venue of such arbitration shall be Delhi."Signature Not Verified Digitally Signed By:ASHEESH
KUMAR YADAV O.M.P. (T) (COMM.) 45/2022 Page 2 Signing Date:09.09.2022 18:17:01
4. Later, certain disputes arose between the parties and it was mutually agreed to refer the disputes to arbitration in accordance with ICADR Rules in terms of Clause 44.3.1 reproduced above, and accordingly a three-member Tribunal was appointed.
5. On May 27, 2018, the Tribunal stated that it would fix its own fees as per the judgment of this Court in National Highway Authority of India v. Gayatri Jhansi Roadways Ltd., 2017 SCC OnLine Del 10285. Accordingly, the fee was fixed as per Fourth Schedule of the Act. Relevant part of the order dated May 27, 2018 is reproduced as under:-
"10 .... Fees payable to each of the Arbitrators shall be as per Fourth Schedule to the Arbitration and Conciliation Act, 1996 (as amended) which, depending upon the claim shall be paid to each arbitrator towards establishment cost and administrative charges.
xxx xxx xxx 11.4 The venue of arbitration will be generally at Delhi unless situation arises to hold at Kolkata, Patna or any other place or places."
6. The petitioner filed an application on July 18, 2018 for modification of the order dated May 27, 2018 with respect to fees and venue. The Tribunal dismissed the application vide order dated September 20, 2018 by stating as under:-
"11 . .. We are of the view that the application is liable to be rejected and accordingly rejected vide this order particularly on the basis of the order passed by two members of the Tribunal being common in arbitration between North Bihar Highways Ltd and National Highways Authority of India vide order no. 5 dated 08.08.2018.Signature Not Verified Digitally Signed By:ASHEESH
KUMAR YADAV O.M.P. (T) (COMM.) 45/2022 Page 3 Signing Date:09.09.2022 18:17:01
12. So far the second limb of the application with regard to venue is concerned, it will be held at Delhi in usual course excepting for some reasons which are contemplated u/s 20(3) of the Arbitration and Conciliation Act, 1996, names of the other places are mentioned in the order.
13. So far as the order which we have passed following the other order of the other Tribunal as aforesaid, the fees of each Arbitrator is fixed at Rs. 49,87,500/-.for each arbitrator plus the fee of their researcher cum assistant /associates is now fixed taking into account perusal fees, Claim and Counter Claim amounts. ...."
As is clear from the above, the Tribunal fixed the fees at ₹ 49,87,500/- per arbitrator.
7. Sometime at the end of the year 2020, the then Presiding Arbitrator passed away and a substitute Presiding Arbitrator was appointed. The cross-examination of CW-2 (the last witness of respondent/claimant) was concluded on January 06, 2020. On January 25, 2021, the Tribunal proceeded to direct as under:-
"The parties had initially deposited Rs. 10, 00,000/- with each of the Arbitrators and thereafter they deposited Rs. 5, 00,000/- with each of the Arbitrators in compliance with direction given in order no. 2 dated 27.05.2018. They have also deposited Rs. 1,50,000/- with each arbitrator towards administrative expenses. Consequently, they must now deposit Rs. 16,50,000 with the presiding arbitrator. ..."
8. It is stated that the cross-examination of RW-1 remained inconclusive even as on February 10, 2020. Cross-examination was Signature Not Verified Digitally Signed By:ASHEESH KUMAR YADAV O.M.P. (T) (COMM.) 45/2022 Page 4 Signing Date:09.09.2022 18:17:01 conducted during various sittings from February 11, 2020 to April 09, 2021.
9. The Tribunal, vide order dated March 19, 2021 directed the parties to deposit ₹5 lakh each and administrative expenses with the Presiding Arbitrator within two weeks. The parties were also directed to deposit ₹2 lakh and administrative expenses with the other two arbitrators. On May 23, 2021, RW-1 expired whereupon the Tribunal proceeded to retain the evidence of RW-1 and the petitioner was directed to produce another officer for the remaining cross- examination on the affidavit of the deceased RW-1 on remaining points. Thereafter, vide order dated July 26, 2021 directed as under:-
"2. The Parties are directed to deposit further Rs. 3 Lacs each and administrative expenses with the presiding arbitrator within 3 weeks. Both the Parties are further directed to deposit Rs. 2 lacs each and administrative expenses with the two learned arbitrators. ..."
10. Further, vide order dated August 16, 2021, the following observations were made:-
"Neither party has complied with directions made for deposit of fees and expenses made on 12.07.2021 and reiterated on 12.08.2021 . ... We may also indicate that under the circumstances owing to the sad demise of the Respondent's witness, the proceedings are getting protracted. Therefore, as at present advised, fees payable to the members of the Tribunal requires reconsideration, which will be done on the next date."
11. Thereafter cross-examination of RW-2 commenced and due to the limited time for which the Tribunal was holding the proceedings, Signature Not Verified Digitally Signed By:ASHEESH KUMAR YADAV O.M.P. (T) (COMM.) 45/2022 Page 5 Signing Date:09.09.2022 18:17:01 only 11 questions could be put to the said witness on October 18, 2021. The matter was scheduled for cross-examination on October 19, 2021 to October 22, 2021 and the witness had come to Delhi from Patna only for that purpose. But the matter was adjourned without any cross-examination because the counsel for the respondent was not ready to cross-examine and he took a frivolous excuse that he wanted to do physical cross-examination even though on most of the dates before and even after, the cross-examination took place virtually. Similarly, on November 24, 2021, only 14 questions were put, on November 25, 2021 only 9 questions were put, on December 09, 2021 only 15 questions were put, on January 31, 2021 only 12 questions were put and on February 01, 2022 only 19 questions were put to him. The Tribunal would sit only at 4.30 PM and rise early (after 45 minutes to 90 minutes) and was not carrying out its functions with due dispatch, thus delaying the proceedings.
12. It is stated that the Tribunal, in complete disregard to the terms between the parties, the ICADR Rules and the Fourth Schedule of the Act, vide order dated November 24, 2021, proceeded to direct as under:-
"3. It is therefore decided by the members of the Tribunal that after tomorrow's hearing the members of the Tribunal will be paid Rs. 1,50,000/- each per sitting to be shared equally by the parties. Mr. Santosh Kumar has some objections to this saying that there are judgments which he is not citing and says he will do so tomorrow. ..."Signature Not Verified Digitally Signed By:ASHEESH
KUMAR YADAV O.M.P. (T) (COMM.) 45/2022 Page 6 Signing Date:09.09.2022 18:17:01
13. It is the case of the petitioner that this direction of the Tribunal to pay ₹1,50,000/- per sitting per arbitrator after the sitting to be held on November 25, 2021 was over and above the lump sum fee already fixed by the Tribunal vide order dated May 27, 2018 and reiterated vide order dated September 20, 2018. The petitioner vide correspondence dated November 24, 2021 objected to the unilateral fixation of fee by the Tribunal by relying upon the judgment of this Court in the case of Gayatri Jhansi Roadways Ltd. (supra), which held that the fee is governed by the agreement between the parties.
14. Thereafter, vide order dated November 25, 2021 the Tribunal directed as under:-
"3. In the procedural order of yesterday it is recorded in para 3 about fees payable to the members of the Tribunal. Shri Santosh Kumar had mentioned about some judgments yesterday. He sent these judgments for our perusal by email last evening. We have gone through those judgments and it only needs to be clarified by us that the fees payable to the members of the Tribunal will be as per law in this regard."
15. The counsel for the petitioner before the Tribunal, vide email dated December 03, 2021, submitted the judgments of this Court in Gayatri Jhansi Roadways Limited (supra) and NHAI v. North Bihar Highway Limited, OMP (T) (COMM.) 104/2018 decided on October 10, 2018, to the Tribunal to demonstrate that the Tribunal could not fix its own fees disregarding the Agreement. On December 08, 2021, an entire hearing of 90 minutes was spent on the application of the petitioner where the petitioner merely said that the respondent had full right to cross-examine petitioner witness. The Tribunal after spending Signature Not Verified Digitally Signed By:ASHEESH KUMAR YADAV O.M.P. (T) (COMM.) 45/2022 Page 7 Signing Date:09.09.2022 18:17:01 the entire 90 minutes hearing the application stated that it would decide the application later.
16. On January 31, 2022, the following order was passed:-
"In the procedural order dated 24.11.2021, the decision of the members of the Tribunal it is recorded to the effect that from the hearings thereafter, i.e., after 25.11.2021 each member of the Tribunal will be paid Rs. 1.5 Lacs per sitting to be shared equally by the parties. Therefore, now the parties are directed to pay each of the Arbitrators Rs. 3 lacs for four hearing that have already taken place on 08.12.2021, 09.12.2021 as well as the hearing that has taken place today and will take place tomorrow. This payment should be made within two weeks."
17. Thereafter, on March 01, 2022, the following direction was made:-
"It is noticed that by order dated 20.09.2018 passed by the Tribunal, as then constituted, fees payable to each of the Arbitrators was fixed at Rs. 49,87,500/-. This was to be paid in equal share by each of the parties. The parties seem to have accepted this without demur. Till the end of January 2022, the Claimant had paid Rs. 12.90 lacs to the presiding arbitrator and Rs. 18.90 to each of the two arbitrators. Pursuant to the direction given on 31.01.2022, the Claimant deposited Rs. 3 lacs with the three arbitrators.
Till 09.12.2021, the Respondent had paid to each of the Arbitrators gross amount of only Rs. 15 lacs less TDS. Thereafter, the Respondent has not even paid Rs. 3 lacs to any members of the Tribunal as directed on 31.02.2022. It is pointed out by the Ld. Co-Arbitrators that the Respondent has also not deposited the full amount of charges for administrative expense and that Signature Not Verified Digitally Signed By:ASHEESH KUMAR YADAV O.M.P. (T) (COMM.) 45/2022 Page 8 Signing Date:09.09.2022 18:17:01 Rs. 50,000/- is due and payable by the Respondent to each of the two Co-Arbitrators.
In the record of proceedings dated 25.01.2021 it was noted that the parties had deposited, with the Ld. CoArbitrators various amounts adding up toRs. 16,50,000. This was a mistake because the deposit fees made till then was as noted above. On 25.01.2021, direction was also given to the parties to make good shortfall of fees payable to the Ld. Co-Arbitrators. This has not been complied with so far.
In view of the above, it has become imperative to pass a specific order with regard to payment of fees by the parties to the Arbitrators. The Claimant is directed to make good the shor(fall of Rs. 6 Lacs as compared to the Respondent and pay the same to the presiding arbitrator. Further, the Respondent has been remiss and negligent in paying its share of fees and administrative expenses to the three arbitrators. They are now specifically directed to pay to each of the Arbitrators Rs. 3.9 lac to match the payment made by the Claimant as noticed above. Further, they must comply with the direction made on 31.01.2022 about payment of Rs. 3 lacs to each of the three arbitrators. All these payment, as directed above, must be made by parties within two weeks from today, i.e., by 15.03.2022.
The Respondent will be well advised to pay the fees as directed, failing which the Tribunal will be constrained to hold that the counter claim of the Respondent will not be considered and/or adjudicated upon . ..."
SUBMISSIONS
18. Mr. Parag P Tripathi, learned Senior Counsel appearing on behalf of the petitioner has submitted at the outset that the directions Signature Not Verified Digitally Signed By:ASHEESH KUMAR YADAV O.M.P. (T) (COMM.) 45/2022 Page 9 Signing Date:09.09.2022 18:17:01 of the Tribunal are not in consonance with the Fourth Schedule of the Act or the ICADR Rules and the directions to pay amounts over and above the same cannot be permitted. That apart, the Tribunal has also failed to proceed with due dispatch, inasmuch as, it has failed to conduct the arbitral proceedings efficiently and expeditiously. Thus the Tribunal, as such, has become de jure incapable of performing its functions and its mandate need to be terminated.
19. It is his submission that the Tribunal is a creation of the Arbitration Agreement and derives its power from it. The parties are the appointing authority and fee, if provided in the Arbitration Agreement is part of the terms of appointment and is binding. The Supreme Court in NHAI v. Gayatri Jhansi Roadways Ltd, (2020) 17 SCC 626, while considering two conflicting judgments passed by two co-ordinate benches of the this Court in Gayatri Jhansi Roadways Ltd. (supra) (relied upon by the Tribunal to fix its own fee) and NHAI v. Gammon Engineers and Contractors Ltd, 2018 SCC OnLine Del 10183, held that the law laid down by the Single Judge of this Court in Gayatri Jhansi Roadways (supra) is not a correct view of the law. The Supreme Court held that the Tribunal was bound to charge fee as per the agreement between the parties and cannot charge anything contrary to it. It was held that the arbitrator‟s fees may be a component of costs to be paid but it is a far cry thereafter to state that Section 31 (8) and 31-A of the Act would directly govern contracts in which fee structure has already been laid down. When the Agreement lays down the fee to be paid or the rules to be followed, in the present case, the ICADR Rules, then the same forms an integral part of the Signature Not Verified Digitally Signed By:ASHEESH KUMAR YADAV O.M.P. (T) (COMM.) 45/2022 Page 10 Signing Date:09.09.2022 18:17:01 terms of appointment. The Tribunal is bound by the arbitration agreement between the parties, which is the source of its power. The Tribunal cannot accept the appointment in part and rewrite the arbitration agreement between the parties. This Court in the matter of NTPC v. Amar India OMP (T) (Comm.) No. 13/2020, held where a Tribunal decides to charge a higher fee which is not as per the Arbitration Agreement, then the Tribunal has not accepted its appointment and has in fact varied the terms of the appointment and is thus, de jure unable to perform its functions.
20. He has referred to Russel on Arbitration, 24th Edition, wherein it has been observed as follows:-
"The appointment of an arbitrator is a matter of contract subject to mandatory provisions of the Act. An arbitrator will not usually be entitled to increase his fees and expenses unless his agreement with the parties allows him to do so. Previously, attempts to increase fee have led to allegations of bias and of what used to be called misconduct, and could, if pursued unreasonably, lead to an application to remove the arbitrator and even to challenge of any award made by him because of breach of the duty to avoid unnecessary expenses"
He has also submitted that Gary B Born in International Commercial Arbitration (Second Edition, 2014) states that the amount of an arbitrator‟s remuneration is a matter of contract, which the parties and arbitrator should negotiate and agree upon. Accordingly, once an arbitrator has accepted an assignment pursuant to an arbitration agreement between the parties and the said agreement provides for the fee payable to such arbitrator or the Rules to be followed, the same is Signature Not Verified Digitally Signed By:ASHEESH KUMAR YADAV O.M.P. (T) (COMM.) 45/2022 Page 11 Signing Date:09.09.2022 18:17:01 binding and the arbitrator cannot unilaterally charge higher fee than agreed upon and accepted by the arbitrator. In this regard, he has also placed reliance upon the judgment of this Court in Delhi State Industrial Infrastructure Development Corporation v. Bawana Infra Development (P) Ltd., 2018 SCC OnLine Del 9241 and Jivanlal Jotiram Patel v. National Highways Authority of India, 2022 SCC OnLine Del 703, and a judgment of the Court of Appeals (Civil Division), England and Wales, in K/S Norjarl A/S v. Hyundai Heavy Industries Co. Ltd., (1991) 3 All ER 211.
21. In the present case, the arbitration clause provides that the arbitration is to be held in accordance with the ICADR Rules. The ICADR Rules provide for the fee payable to the Tribunal and the fee prescribed by the ICADR Rules is binding on the Tribunal. As per ICADR Rules, the maximum fee payable to each of the arbitrator is ₹30,00,000/- for both claims and counter claims taken together. This Court in NHAI v. North Bihar Highway Limited, OMP (T) (Comm.) No. 104/2018, has also held that the maximum fee required to be paid as per the ICADR Rules cannot exceed ₹30,00,000/-.
22. Mr. Tripathi has submitted that a party cannot be forced to pay higher fee than the one stated in the arbitration agreement. The Supreme Court in Union of India v. Singh Builders Syndicate, (2009) 4 SCC 523, observed ".......if a high fee is claimed by the arbitrator and one party agrees to pay such fee, the other party, who is unable to afford such fee or reluctant to pay such high fee, is put to an embarrassing position. He will not be in a position to express his reservation or objection to the high fee, owning to an apprehension Signature Not Verified Digitally Signed By:ASHEESH KUMAR YADAV O.M.P. (T) (COMM.) 45/2022 Page 12 Signing Date:09.09.2022 18:17:01 that refusal by him to agree for the fee suggested by the arbitrator, may prejudice his case or create a bias in favour of the other party which readily agreed to pay the high fee". Similarly, the High Court of Madras in Madras Fertilizers Limited v. SICGIL India Limited, 2007 SCC OnLine Mad 748 held that a party should not be forced to pay a higher fee which they are not capable of paying. In the said case the Court further held that if the arbitration is allowed capable to continue then the party, who is not capable of paying the higher fee would not be in a proper frame of mind to proceed with the arbitration and it will definitely have some doubt as to the conduct of the arbitrator. Accordingly, the High Court terminated the mandate of the arbitrator. It is also submitted that attempts by an arbitrator to renegotiate his contract after appointment can easily undermine the confidence of one or more of the parties in the arbitrator‟s ability to perform the task he has agreed and is being paid to perform. To buttress his contention, he has referred to the judgment of the New South Wales Court of Appeal in Sea Containers Ltd. v. ICT PTY Ltd., 2002 NSWCA 84.
23. He has further submitted that the Tribunal, illegally and unilaterally, vide order dated November 24, 2021 revised the fee and directed that the it shall be paid a fee of ₹ 1,50,000/- per hearing, to be shared equally by both parties. The said fee was over and above the lump sum fee, which had been fixed by the Tribunal. The petitioner objected to the same by highlighting the judgment of the Supreme Court in Gayatri Roadways (supra) and of this Court in North Bihar (supra) which held that the fee structure is to be governed by the Signature Not Verified Digitally Signed By:ASHEESH KUMAR YADAV O.M.P. (T) (COMM.) 45/2022 Page 13 Signing Date:09.09.2022 18:17:01 agreement between the parties. On one hand, vide order dated November 25, 2021, the Tribunal clarified that after having gone through the said judgments, the fees payable to members of the Tribunal will be as per law in this regard. On the other hand, vide the order dated January 31, 2022, the Tribunal issued further directions to the parties to pay ₹3 lakh @ ₹ 1,50,000 per sitting per arbitrator (for the hearing held on December 08, 2021, December 09, 2021, January 31, 2022 and one hearing which was to take place on February 01, 2022) to each arbitrator pursuant to the order dated November 24, 2021. The Tribunal vide order dated March 01, 2022 reiterated their demand of deposit of fees (@ ₹1,50,000/- per sitting) in terms of order dated January 31, 2022 and directed the petitioner to pay each arbitrator ₹ 3.9 lakh (towards the lump sum fee) to match the payment made by the claimant/respondent and further directed the petitioner to pay ₹3 lakhs to each of the three arbitrators (fee @ ₹ 1,50,000/- per sitting), within two weeks from the said order "failing which the Tribunal will be constrained to hold that the counter claim of the Respondent will not be considered and/or adjudicated upon". In the order dated April 04, 2022, the Tribunal held that the petitioner herein is unrelenting and has not paid its share of fees and expenses to the arbitrators and the consequence of such intransigence will follow as recorded in earlier procedural orders.
24. He has further submitted that the respondent herein, after supporting the Tribunal in their illegal demand of ₹1.5 Lakhs per hearing per arbitrator over and above the lump sum fee, is making a shockingly unfair argument that although the Tribunal vide order Signature Not Verified Digitally Signed By:ASHEESH KUMAR YADAV O.M.P. (T) (COMM.) 45/2022 Page 14 Signing Date:09.09.2022 18:17:01 dated November 24, 2021 has revised its fee and fixed it at ₹1,50,000/- per sitting w.e.f. the sitting/hearing dated November 25, 2021, however, the cap/ceiling is still ₹ 49,87,500/- and once the said ceiling is reached no more fee is payable to the Tribunal. Mr. Tripathi has stated that this is an absurd argument since if this was the intention of the Tribunal, no revision of fee would have been required. It is submitted that a bare perusal of the orders dated November 24, 2021, November 25, 2021, January 12, 2022, January 31, 2022 and March 01, 2022 would demonstrate that the Tribunal has unilaterally revised its fee, after agreeing a lump sum fee as per fourth schedule, at ₹ 1,50,000/- per sitting over and above the lump sum fee. The Tribunal revised its fee vide order dated November 24, 2012 ; thereafter vide order dated November 25, 2021 directed the parties to make good the shortfall of fees payable to the arbitrators (this was towards the lump sum amount); thereafter vide order dated January 12, 2022 the Tribunal again directed the parties to make good the shortfall of fee which was towards the lump sum amount; thereafter vide order dated January 31, 2022 the Tribunal directed the parties to deposit ₹3 lakh each to the Arbitrators, the said fee was calculated at revised fee for four hearings (sittings dated January 08, 2022, January 09, 2022, January 31, 2022 and for the sitting to be held on February 01, 2022); and thereafter vide order dated March 01, 2022 directed the respondent to pay ₹ 3.9 lakhs (towards lump sum fee) to each arbitrator to match the payment made by the claimant and thereafter, further, directed the respondent to pay ₹ 3 lakhs (fee @ ₹ 1,50,000/-
Signature Not Verified Digitally Signed By:ASHEESHKUMAR YADAV O.M.P. (T) (COMM.) 45/2022 Page 15 Signing Date:09.09.2022 18:17:01 per sitting over and above the lump sum fee) to each arbitrator in terms of the order dated January 31, 2022.
25. Further, the Tribunal, vide order dated March 01, 2022 noted that the claimant had paid ₹ 12.90 lakh to the presiding arbitrator and ₹ 18.90 lakh to the co-arbitrators. The Tribunal directed the claimant to make good the short fall of ₹6 lakh to be paid to the presiding arbitrator. This direction was towards the lump sum fee. Since the petitioner had paid ₹ 15 lakh to each arbitrator and the claimant had paid ₹ 18.90 lakh towards each arbitrator, the respondent was directed to pay ₹ 3.9 lakh to each arbitrator to match the payment made by the claimant. The Tribunal further noted that in terms of order dated January 31, 2022 the claimant had deposited ₹ 3 lakh to each arbitrator (this being claimant‟s share of the revised fee @ ₹1.5 lakh per arbitrator per sitting). It directed the respondent to comply with the directions issued on January 31, 2022 and deposit ₹ 3 lakh to each arbitrator. Therefore, according to him, it is clear that the Tribunal is demanding the lump sum fee and the revised fee. The fee paid by the parties till date is detailed in the table below:
Amount paid by Amount paid by
Claimant till date Petitioner/NHAI
Lump sum fee ₹ 18.90 lakh to each ₹15 lakh to each
(₹49,87,500) to each arbitrator [Claimant‟s arbitrator [NHAI share
arbitrator share of fee is of fee is ₹24,93,750/-
₹24,93,750/- per per arbitrator as per
arbitrator as per Tribunal lump sum
Tribunal lump sum order dated
order dated 27.05.2018 (objected
27.05.2018] to by NHAI on the
ground that ceiling as
Signature Not Verified
Digitally Signed By:ASHEESH
KUMAR YADAV O.M.P. (T) (COMM.) 45/2022 Page 16
Signing Date:09.09.2022
18:17:01
per Fourth Schedule is
₹30 lakh]
Fee @ Rs. 1.5 lakh ₹3 lakh to each NIL
per arbitrator per arbitrator
sitting
26. It is submitted that after the per hearing fee fixation on November 24, 2021, which was made applicable from the hearing to be held after November 25, 2021, nine sittings have been held i.e., on December 08, 2021, December 09, 2021, January 31, 2022, February 01, 2022, March 01, 2022, March 15, 2022, April 04, 2022, April 28, 2022 and May 16, 2022. The fee payable for the nine sittings @ ₹ 1.5 lakh per arbitrator per sitting comes out ₹13.5 lakh per arbitrator and for each party it would be ₹6.75 lakh per arbitrator. Since, the respondent has already paid ₹18.90 lakh to each arbitrator towards lump sum and ₹6.75 lakh is payable by it towards per hearing fee the total whereof comes to ₹ 25,65,000/- (paid ₹ 21.9 lakh so far) the threshold of ₹49,87,500/-. In other words, ₹ 24,93,750/-, being the one party share of fee per arbitrator, has been crossed w.e.f. the hearing dated May 16, 2022. It is stated that accordingly, the arguments sought to be raised by the respondent is liable to be rejected.
27. Without prejudice to the afore mentioned submissions, Mr. Tripathi has also submitted that as soon as it revised the fee payable to the arbitrators vide order dated November 24, 2021, the Tribunal, at that very instant became de jure incapable to perform its functions and its mandate is liable to be terminated.
28. That apart, Mr. Tripathi has also submitted that the initial fixation of fee by the Tribunal at ₹ 49,87,500/- (plus 10% towards Signature Not Verified Digitally Signed By:ASHEESH KUMAR YADAV O.M.P. (T) (COMM.) 45/2022 Page 17 Signing Date:09.09.2022 18:17:01 their research associates) for each arbitrator by and ignoring fee prescribed under the ICADR Rules (which is made applicable to the arbitration) was illegal and contrary to law. Moreover, it is also the case of the petitioner as put forth by Mr. Tripathi that even under the Fourth Schedule of the Act, which is pari materia to the Fee Schedule of ICADR, the maximum fee payable is ₹ 30,00,000/-. He has pointed out that the issue qua the ceiling limit under the Fourth Schedule is pending before the Supreme Court in the case of Oil and Natural Gas Corporation Ltd. v. Afcons Gunanusa JV, Arbitration Petition (Civil) 05/2022 and connected matters which included the case of Rail Vikas Nigam Ltd. v. Simplex Infrastructure, SLP(C) No. 10358/2020, where the petitioner herein, i.e., the NHAI has filed an impleadment application and argued for the ceiling of ₹ 30,00,000/-. To buttress his argument that the ceiling is in fact ₹30,00,000/-, he has relied upon a judgment of the High Court of Patna in the case of State of Bihar and Ors. v. Bihar Sugarcane Corporation Ltd. and Ors., MANU/BH/0720/2020; a judgment of the High Court of Allahabad at Lucknow in State of UP and Ors., v. GVK EMRI (UP) Pvt. Ltd. and Ors., MANU/UP/1313/2021, and the 246th Law Commission Report dated August 2004. He has also referred to the judgments of the Supreme Court in the cases of OS Singh and Anr. v. Union of India and Anr. (1996) 7 SCC 37; Mithilesh Kumari and Anr. v. Prem Behrari Khare, (1989) 2 SCC 95 and Shrimant Shamrao Suryavanshi and Anr. v. Prahlad Bhairoba Suryavanshi (Dead) by LRs and Ors., (2002) 3 SCC 676, to contend that the provision in the sixth entry of the Fourth Schedule of the Act should be interpreted to Signature Not Verified Digitally Signed By:ASHEESH KUMAR YADAV O.M.P. (T) (COMM.) 45/2022 Page 18 Signing Date:09.09.2022 18:17:01 mean that the maximum ceiling of fee payable is ₹ 30,00,000/- and not ₹49,87,500/-. Further, as per the agreement and the ICADR Rules applicable to the arbitration, the arbitrator‟s fee is capped at ₹30,00,000/- and the petitioner has paid its share of ₹15,00,000/-.
29. Another contention put forth by Mr. Tripathi is that there has been a failure on the part of the Tribunal to proceed with due dispatch. According to him, this failure is clear from the following facts:-
i. Pleadings were complete by the end of 2018. In the year 2019 end (and 4-5 days of January next), the petitioner finished cross examination of all three witness of the claimant. ii. The petitioner has only one witness, whose cross examination started on February 10, 2020, and has not been concluded even after 27 months, i.e., 34 hearings.
iii. From January 2021, when the new presiding arbitrator was appointed, the sitting starts at 4.30 PM and goes on for a maximum of 45 to 90 minutes. Hearings are never fixed for Saturday or Sunday iv. During proceeding on February 22, 2021 only 18 questions were asked.
v. During proceeding on March 19, 2021 only 10 questions were asked.
vi. During proceeding dated April 04.2021 only 14 questions were asked.
vii. During proceedings dated October 18, 2021 only 11 questions were asked.Signature Not Verified Digitally Signed By:ASHEESH
KUMAR YADAV O.M.P. (T) (COMM.) 45/2022 Page 19 Signing Date:09.09.2022 18:17:01 viii. During proceedings dated November 24, 2021 only 14 questions asked.
ix. During proceedings dated November 25, 2021 only 9 questions asked.
x. During proceeding dated December 09, 2021 only 15 questions asked.
xi. During proceeding dated January 31, 2022 only 11 questions asked.
xii. The witness came from Patna for most of the cross-examination because the respondent cast certain insinuations, even though cross-examination was also held in virtual mode. xiii. Furthermore, on the applications filed by the petitioner, the Tribunal spent an entire session hearing the parties. However, after the entire hearing, it proceeded to direct that they will decide the applications later.
In support of his plea that for these reasons as well, the mandate of the Tribunal is liable to be terminated, he has placed reliance on the judgment of this Court in the matter of Ariba India Pvt. Ltd. v. M/s Ispat Industries Ltd., OMP No. 358/2010 wherein this Court terminated the mandate of the arbitrator who did not proceed with the arbitration expeditiously and efficiently.
30. On the other hand, Mr. Gourab Banerji, learned Senior Counsel appearing on behalf of the respondent has submitted that the petitioner has in their Written Submission and on May 18, 2022 during the course of hearing, completely changed its case from its case before the Tribunal as well as in its pleading before this Court. As a matter of Signature Not Verified Digitally Signed By:ASHEESH KUMAR YADAV O.M.P. (T) (COMM.) 45/2022 Page 20 Signing Date:09.09.2022 18:17:01 fact, the case of petitioner has consistently being that the Tribunal cannot claim a fee above ₹ 30.00.000/- and that the Tribunal's setting of a cap of fee of ₹ 49,87,500/ was alleged to be against the law and contract. This was the averment raised by petitioner before the Tribunal, as well as the case set up in its pleadings. The submission that the Tribunal is claiming amounts over and beyond ₹49,87,500/-, which is a ground for termination of the mandate of the Tribunal, was made de novo after the petition has been filed. He has submitted further that the Tribunal had capped the fee of ₹ 49,87,500/- as far as back in 2018, vide orders dated May 27, 2018 and September 20, 2018 and the petitioner did not raise any objection to same until it was asked to comply with the same in 2021-22. Accordingly, he submitted that this petition merits summary dismissal.
31. Further, Mr. Banerji has submitted that the Tribunal has not sought for any amount over and above the amount of ₹ 49,87,500/- (per arbitrator). This is clear and evident from a perusal of the order dated March 01, 2022 wherein the Tribunal has clearly recorded as under:
"by the order dated 20.09.2018 passed by the Tribunal, as then constituted, fees payable to each of the Arbitrators was fixed at Rs.49.87,500/-. This was to be paid in equal share by each of the parties. The parties seem to have accepted this without demur. Till the end of January, 2022 the Claimant had paid Rs. 12.90 lakhs to the Presiding Arbitrator and Rs. 18.90 lakhs to each of the two Arbitrators. Pursuant to the direction given on 31.01.2022, the Claimant has deposited Rs.3 lakhs with the three Arbitrators.Signature Not Verified Digitally Signed By:ASHEESH
KUMAR YADAV O.M.P. (T) (COMM.) 45/2022 Page 21 Signing Date:09.09.2022 18:17:01 Till 9.12.2021, the Respondent had paid to each of the Arbitrators gross amount of only Rs.15 lakhs less TDS. Thereafter, the Respondent has not even paid Rs.3 lakhs to any member of the Tribunal as directed on 31.01.2022. It is pointed out by the two Ld. Co- Arbitrators that the Respondent has also not deposited the full amount of charges for administrative expenses and that Rs.50.000/- is due and payable by the Respondent to each of the two Co- Arbitrators. In the record of the proceedings dated 25.01.2021 it was noted that the parties had deposited, with the Ld. Co-Arbitrators various amounts adding up to Rs. 16.50,000/-. This was a mistake because the deposit of fees made till then was as noted above. On 25.01.2021, direction was also given to the parties to make good the shortfall of fees payable to the Ld. Co-Arbitrators. This has not been complied with so far.
In view of the above, it has become imperative to pass a specific order with regard to payment of fees by the parties to the Arbitrators. The Claimant is directed to make good the shortfall of Rs 6 lakhs as compared to the Respondent and pay the same to the Presiding Arbitrator. Further, the Respondent has been remiss and negligent in paying its share of fees and administrative expenses to the three Arbitrators. They are now specifically directed to pay to each of the Arbitrators Rs.3.9 lakhs to match the payment made by the Claimant as noticed above. Further, they must comply with the direction made on 31.02.2022 about payment of Rs. 3 lakhs each of three Arbitrators."
32. It is submitted that as is evident and clear from a perusal of the above mentioned order, the cap of ₹49,87,500/- (per arbitrator) has not been modified by the Tribunal. The said amount of ₹ 49,87,500/- (per arbitrator) is enshrined in both the arbitral agreement as well the earlier order of the Tribunal setting the fee.
Signature Not Verified Digitally Signed By:ASHEESHKUMAR YADAV O.M.P. (T) (COMM.) 45/2022 Page 22 Signing Date:09.09.2022 18:17:01
33. He has submitted that pertinently, the petitioner has not challenged the initial orders dated May 27, 2018 and September 20, 2018, which fixed the fee payable to each arbitrator at ₹ 49,87,500/-.
34. Mr. Banerjee has contested the submission of Mr. Tripathi that the order dated November 24, 2021 has sought an amount over and above ₹49, 87, 500/- by stating that nowhere has it been stated the said order that the fee payable the Tribunal shall exceed the amount of ₹49,87,500/ (per arbitrator). It merely talks about the frequency of the payment of the fee. In any case, the order of the Tribunal dated March 01, 2022 makes it clear that the cap of ₹49,87,500/- remains in force.
35. That apart, it is his submission that neither parties have paid the full amount of ₹49,87,500/- to the Tribunal. The calculation of the amounts already paid and to be paid, as per Mr. Banerji is as below:-
Member of the Fees paid Fees to be paid Total Amount Tribunal as per order dated 01.03.2022 Justice M. L. 15,00,000/- (by 3,90,000/- + 30,90,000/- + Verma (Retd.) Petitioner) 3,00,000/- (By 12,90,000 (the Presiding Petitioner) Arbitrator) 15,90,000/- (by 6,00,000/- (By Respondent) Respondent) TOTAL 30,90,000/- 12,90,000/- 43,80,000/-
Mr. R. K. 15,00,000/- (by 3,90,000/- +
Srivastava, IAS Petitioner) 3,00,000/- (by
(Retd.) (Co- Petitioner)
Arbitrator) 21,90,000/- (by
Respondent)
TOTAL 36,90,000/- 6,90,000/- 43,80,000/-
Justice S. K. 15,00,000/- (by 3,90,000/- +
Katriar (Retd.) Petitioner) 3,00,000/- (by
(Co-Arbitrator) Petitioner)
Signature Not Verified
Digitally Signed By:ASHEESH
KUMAR YADAV O.M.P. (T) (COMM.) 45/2022 Page 23
Signing Date:09.09.2022
18:17:01
21,90,000/- (by
Respondent)
TOTAL 36,90,000/- 6,90,000/- 43,80,000/-
36. He has submitted that it is a settled principle, which has also been admitted by the petitioner, as is clear from the order of this Court dated May 18, 2022, that the proper construction of Fourth Schedule of the Act is that each arbitrator can claim an amount of up to ₹49,87,500/- from each party as held in Rail Vikas Nigam Ltd.
(supra). He has reiterated that the Tribunal has not claimed anything over and above ₹49,87,500/-, which both the parties are liable to pay to the Tribunal considering the fact that the claim amount is ₹941 crore and the counter claim amount is ₹251.38 crore. It is also submitted that the ICADR Rules are, admittedly, in-line with the Fourth Schedule and accordingly, the cap of ₹49,87,500/- applies to the instant arbitration as well. His plea is that this limit has not been breached at any stage, and as such the petition is premature and deserves summary dismissal.
37. As regards the submission of Mr. Tripathi regarding delay on the part of respondent and/or the Tribunal, Mr. Banerji has stated that the table annexed to his Written Submissions would show that it is actually the petitioner which has sought to delay the proceedings and that there may have been some events beyond the control of any of the parties which have lead to inordinate delays. He seeks the dismissal of the petition.
38. Having heard the learned counsel for the parties and perused the record, the short question which arises for consideration is whether the Signature Not Verified Digitally Signed By:ASHEESH KUMAR YADAV O.M.P. (T) (COMM.) 45/2022 Page 24 Signing Date:09.09.2022 18:17:01 mandate of the Arbitral Tribunal needs to be terminated on the grounds that;(i) the fee being charged by the members of the Tribunal is in disregard to the agreement between the parties; and (ii) the Tribunal has failed to proceed with due dispatch.
39. In the present case, the arbitration clause provides that the arbitration shall be in terms of the ICADR Rules. The ICADR Rules provides the following:-
II. Arbitrator's fee referred to in rule 28 Amount of fee Amount in dispute For one Arbitrator (in rupees) (in rupees)
(i) where the total amount in dispute Rs. 45,000 does not exceed Rs. 5 lakh
(ii) where the total amount in dispute Rs.45,000/- plus exceeds Rs. 5 lakh but does not exceed 3.5 per cent of the Rs. 20 lakh amount by which the total amount in dispute exceeds Rs.5 lakh
(iii) where the total amount in dispute Rs.97,500/- plus 3 exceeds Rs.20 lakh but does not exceed per cent of the Rs.1 crore amount by which the total amount in dispute exceeds Rs.20 lakh
(iv) where the total amount in dispute Rs.3,37,500/- plus exceeds Rs.1 crore but does not exceed 1 per cent of the Rs.10 crore amount by which the total amount in dispute exceeds Rs.1 crore Signature Not Verified Digitally Signed By:ASHEESH KUMAR YADAV O.M.P. (T) (COMM.) 45/2022 Page 25 Signing Date:09.09.2022 18:17:01
(v) where the total amount in dispute Rs.12,37,500/-
exceeds Rs.10 crore but does not exceed plus 0.75 per cent Rs.20 crore of the amount by which the total amount in dispute exceeds Rs.10 crore
(vi) where the total amount in dispute Rs.19,87,500/-
exceeds Rs.20 crore plus 0.5 per cent of
the amount by
which the total
amount in dispute
exceeds Rs.20 crore
with a ceiling of
Rs.30 lakhs
40. It may be stated here, the ICADR Rules are pari-materia to Schedule IV of the Act including entry No. 6 in the Fourth Schedule to the Act in respect of fee payable to the Tribunal except, the entry 6 of Schedule refers to claim amount and reads as under:
6. Above Rs. 20,00,00,000 Rs.19,87,500 plus 0.5 per cent of the claim amount over and above Rs.20,00,00,000 with a ceiling of Rs.30,00,000
41. I may also state here, the issue whether the arbitration fee is capped at ₹30,00,000/- or ₹49,87,500/-, was pending consideration before the Supreme Court at the time I heard the present matter finally, in the case Oil and Natural Gas Corporation Ltd. (supra) and connected matters which included the case of Rail Vikas Nigam Ltd.
Signature Not Verified Digitally Signed By:ASHEESHKUMAR YADAV O.M.P. (T) (COMM.) 45/2022 Page 26 Signing Date:09.09.2022 18:17:01 (supra), wherein the petitioner NHAI had also sought its impleadment on the ground that in no case can the fee of the members of the Arbitral Tribunal exceed ₹30,00,000/- under Entry No. 6 of the Fourth Schedule. The SLP and the connected matters have since been decided vide judgment dated August 30, 2022, wherein the Court held that the fee for claims and counter claims has to be fixed separately and the fee regards entry No. 6 in the Fourth Schedule of the Act fee has been capped at ₹30 lakh per arbitrator, including both the base amount of ₹19,87,500/- and the variable amount over and beyond it, to be applicable to claims and counter claims separately.
42. Having said that, the submission of Mr. Tripathi is primarily in relation to the fact that the Tribunal in its hearing dated September 20, 2018, having fixed the fee as ₹49,87,500/- taking into account the claims and counter claims which are for ₹941 crore and ₹251.38 crore respectively, it could not have directed payment of fee over and above ₹49,87,500/-.
43. It is his submission that in fact the Tribunal by passing various orders has increased the fee payable to each of the members of the Tribunal beyond ₹49,87,500/-. In support of his submission, Mr. Tripathi had relied upon the orders passed by the Tribunal on May 27, 2018, September 20, 2018, August 16, 2021, November 24, 2021, November 25, 2021, January 31, 2022 and March 01, 2022. The reading of the orders on the dates mentioned above, would reveal that the Tribunal fixed the fee of each Arbitrator for both claims and counter claims taken together as ₹49,87,500/-. It also held as the proceedings are protracted the fee payable to members of the Tribunal Signature Not Verified Digitally Signed By:ASHEESH KUMAR YADAV O.M.P. (T) (COMM.) 45/2022 Page 27 Signing Date:09.09.2022 18:17:01 required reconsideration and had directed each of the member of the Tribunal be paid an amount of ₹1.5 lakh per sitting to be shared equally.
44. Additionally, Mr. Tripathi‟s submission was also that in terms of directions of the Tribunal that the members of the Tribunal shall be paid an amount of ₹1.5 lakh per sitting and nine sittings having taken place between December 8, 2021 to May 16, 2022, the additional fee payable @ ₹ 1.5 lakh per arbitrator per sitting comes out at ₹13.5 lakh per arbitrator and for each party it would be ₹6.75 lakh per arbitrator. Since, the respondent has already paid ₹18.90 lakh to each arbitrator towards lump sum and ₹6.75 lakh is payable by it towards per hearing fee, the total whereof comes to ₹ 25,65,000/- which is beyond the 50% fee payable by each party by taking the threshold as ₹49,87,500/-, i.e., ₹ 24,93,750/-.
45. The submission of Mr. Tripathi is appealing, inasmuch as the Tribunal despite fixing the fee of ₹49,87,500/- on September 20, 2018 by taking into account both the claims and counter claims, could not have re-fixed the fee beyond the said figure. This I say so, as it is settled law that the arbitrator can charge the fee only as has been agreed by the parties. The Supreme Court in Oil and Natural Gas Corporation Ltd (supra) and connected matters, which judgment also included the decision in Rail Vikas Nigam Ltd. (supra), has held that the Arbitral Tribunal cannot deviate from the terms of reference, the same being a tripartite agreement between the parties and Tribunal, and any amendments, revisions, additions may only be made with the consent of the parties. The orders dated August 16, 2021 and Signature Not Verified Digitally Signed By:ASHEESH KUMAR YADAV O.M.P. (T) (COMM.) 45/2022 Page 28 Signing Date:09.09.2022 18:17:01 November 24, 2021 would show that the Tribunal, observing that the proceedings are becoming protracted, decided that the fee payable to the members of the Tribunal required reconsideration and had fixed, the per sitting fees as ₹1.5 lakh per arbitrator. The Tribunal did not clarify, that, the amount of ₹1.5 lakh shall only be paid till the cap of ₹49,87,500/- is reached. The Tribunal not having said that, the intent of the order of the Tribunal was to go beyond the figure of ₹49,87,500/-. But one document on which much reliance has been placed by Mr. Banerji is the order dated November 25, 2021 i.e., the date fixed by the Tribunal on November 24, 2021 when Mr. Santosh Kumar, learned counsel for the petitioner herein, raised an objection to the Tribunal ordering fee to be paid at ₹1.5 lakh per sitting to be shared equally by the parties. He stated, there are judgments which he is not citing but shall produce the next day, i.e., November 25, 2021. He in fact, submitted the judgments to the Tribunal and in the order of November 25, 2021, the Tribunal inter-alia has stated as under:
"We have gone through those judgment and it only needs to be clarified by us that the fee payable to the members of the Tribunal will be as per law in this regard."
46. The above order passed by the Tribunal was on a consideration of the judgment(s) that the fee to be charged by the Tribunal shall be "as per law". The Tribunal has not clarified what it meant by the words "as per law". It can be inferred that the intent of the order dated November 25, 2021 was to say that the Tribunal cannot exceed the figure as permissible in law. The law that existed was that, the Tribunal could not have charged the fee beyond ₹49,87,500/-. So, the Signature Not Verified Digitally Signed By:ASHEESH KUMAR YADAV O.M.P. (T) (COMM.) 45/2022 Page 29 Signing Date:09.09.2022 18:17:01 benefit of the expression "as per law" would accrue in favour of the Tribunal for the reason that the order dated November 24, 2021 had not attained finality as the counsel for the respondent had objected to the Tribunal fixing the fee @ ₹1.5 lakh per hearing and wanted to show certain judgment(s) and on consideration of the judgment(s), on November 25, 2021, the Tribunal clarified that the fee payable will be as per law. As such, this Court is not inclined to agree with the submission of Mr. Tripathi that the Tribunal has fixed the fee beyond ₹49,87,500/- and as such, the mandate of the Tribunal need to be terminated. In view of my above conclusion, the judgments relied upon by Mr. Tripathi in the cases of Singh Builders Syndicate (supra); Madras Fertilizers Ltd. (supra); NTPC (supra); Delhi State Industrial Infrastructure Development Corporation (supra); Jivanlal Jotiram Patel (supra); Sea Containers Ltd. (supra) and K/S Norjarl (supra) are clearly distinguishable on facts. Mr. Tripathi has also relied upon the Judgment in the case of Gayatri Jhansi Roadways Ltd. (supra), wherein the Supreme Court after considering two judgments of Coordinate Benches of this Court in Gayatri Jhansi Roadways (supra) and Gammon Engineers and Contractors Pvt. Ltd. (supra) held as under:
"However, the learned Single Judge's conclusion that the change in language of Section 31 (8) read with Section 31-A which deals only with the costs generally and not with arbitrator's fees is correct in law. It is true that the arbitrator's fees may be a component of costs to be paid but it is a far cry thereafter to state that Sections 31(8) and 31-A would directly govern contracts in which a fee structure has already been laid down. To this extent, the learned Single Judge is correct. We Signature Not Verified Digitally Signed By:ASHEESH KUMAR YADAV O.M.P. (T) (COMM.) 45/2022 Page 30 Signing Date:09.09.2022 18:17:01 may also state that the declaration of law by the learned Single Judge in Gayatri Jhansi Roadways Ltd. [NHAI v. Gayatri Jhansi Roadways Ltd. 2017 (SCC) OnLine Del 10285] is not a correct view of the law."
The above judgment is also distinguishable in view of the issue which falls for consideration and in view of my above conclusion.
47. The plea of Mr. Tripathi that as nine sittings have taken place after the order of November 24, 2021, the additional fee payable @ ₹1.5 lakh per arbitrator per sitting would take the amount beyond ₹49,87,500/- and 50% thereof to be paid by each party shall be ₹25,65,000/- which is more than 24,93,750/-, i.e., 50% of ₹49,87,500/-, is also not appealing in view of my conclusion above that the order of the Tribunal stating the fee shall be as per law, would mean that the same shall be ₹49,87,500/- and not beyond that. I also find no order of the Tribunal to pay the fee for nine sittings, as has been sought to be contended by him. It may also be stated that direction of the Tribunal for payment of fees in the manner depicted in the orders dated January 31, 2022 and March 01, 2022 would also not have had the effect of taking the fee per Arbitrator beyond ₹49,87,500/-.
48. Now, coming to the second submission of Mr. Tripathi that there has been a failure on the part of the Tribunal to proceed with due dispatch resulting in undue delay in completing the proceedings by highlighting the fact that though the petitioner had, in the year 2019 finished the cross examination of all the three witnesses of the claimant but the only witness of the petitioner whose cross Signature Not Verified Digitally Signed By:ASHEESH KUMAR YADAV O.M.P. (T) (COMM.) 45/2022 Page 31 Signing Date:09.09.2022 18:17:01 examination had started on February 10, 2020 has not been completed even after 27 months, i.e., after 34 hearings.
49. According to him, on the days on which cross-examination was held, the proceedings started at 4.30 PM and were held for 45 to 90 minutes and only few questions were asked and no attempt was made to complete the cross examination of the sole witness of the respondent.
50. During the course of arguments, the respondent along with their submissions, has filed a list of dates detailing the orders passed by the Tribunal since the beginning. The relevant part of list of dates, the events that took place during the hearings and the orders passed in the proceedings held after December 4, 2020, i.e., when the present Tribunal was constituted reads as under:
Date Particulars 25.01.2021 The matter was fixed for cross examination of RW-1 but due to bereavement of RW-1‟s sister, RW-1 could not attend the hearing.
22.02.2021 Cross examination of RW-1 was conducted via video conferencing.
23.2.2021 Cross examination of RW-1 was conducted via video conferencing and the dates already fixed were cancelled and it was decided to hold physical hearing in March. 19.3.2021 Conducted via video conferencing due to rise in COVID-19 cases.
Notice under Section 66 of the Evidence Act served by the respondent herein to the petitioner to which the petitioner was to reply within two weeks.
8.4.2021 Reply to Section 66 notice filed by the petitioner.
Cross examination of RW-1 continued.
Signature Not Verified Digitally Signed By:ASHEESHKUMAR YADAV O.M.P. (T) (COMM.) 45/2022 Page 32 Signing Date:09.09.2022 18:17:01 9.4.2021 Cross examination of RW-1 continued.
Fixed the date for haring for 13.4.2021.
Note: due the increase in COVID-19 cases parties sought adjournment on 13.4.2021.
23.5.2021 RW-1 succumbed to COVID-19.
Note: Email dated 28.6.2021 was sent on behalf of the respondent herein for resumption of further proceedings. 1.7.2021 Tribunal fixed the haring on 12.7.2021 for argument on Section 66 notice.
12.7.2021 Suggestion by both the counsel that the petitioner NHAI may file an affidavit adopting the averment in the affidavit of the deceased witness only to the extent to which the earlier witness was not subjected to cross examination. Tribunal accepted the suggestion.
Counsel for NHAI sought four weeks time to file the affidavit of another officer on points not covered by the cross examination of the previous witness on the affidavit that he filed. Tribunal granted time till 9.9.2021.
The Tribunal fixed 16.8.2021 to 20.8.2021 as the next dates for cross examination.
Tribunal fixed 26.7.2021 as the date for hearing arguments on notice under Section 66 of the Evidence Act.
26.7.2021 Arguments on Section 66 notice were heard. Tribunal reiterated the dates from 16.8.2021 to 20.8.2021 as the next date for cross examination.
7.8.2021 Order passed on Section 66 notice. Tribunal directed NHAI to furnish notifications under Section 3E, 3F, 3G and 3H of the National Highways Act.
12.8.2021 On 11.8.2021 email from NHAI was received by the Tribunal seeking adjournment on already fixed dates from 16.8.2021 to 20.8.2021. Since fresh evidence affidavit could not be filed by NHAI.
Signature Not Verified Digitally Signed By:ASHEESHKUMAR YADAV O.M.P. (T) (COMM.) 45/2022 Page 33 Signing Date:09.09.2022 18:17:01 Note: NHAI failed to file the fresh evidence affidavit and sought adjournment on the dates of 16.8.2021 to 20.8.2021.
16.8.2021 Tribunal did not consider the compilation of judgments and the short note sent by NHAI vide email dated 7.8.2021 since the order in Section 66 notice was already passed and the arguments advanced during the oral hearing did not refer to any of the contentions mentioned in the short note. No direction was passed to file any such note.
NHAI sought time till 25.9.2021 to file evidence affidavit and documents as directed in the order dated 7.8.2021 which was allowed by the Tribunal.
Tribunal fixed the date for hearing for 18.10.2021 to 22.10.2021 for cross examination.
25.9.2021 Documents filed by NHAI pursuant to direction issued on 16.8.2021.
Note: 891 pages documents filed by NHAI most of which were illegible and in Hindi.
30.9.2021 Affidavit filed by RW-2 Amresh Kumar Sharma deposing only paragraphs of the affidavit of RW-1 on which questions were not asked by counsel for the respondent herein.
14.10.2021 Documents filed by NHAI after a delay of 20 days.
Note: 86 pages documents filed by NHAI, mostly illegible and in Hindi and hand written.
18.10.2021 Documents filed by NHAI on 14.10.2021 were taken on record by payment of Rs.20,000/- as costs.
Cross examination of RW-2 commenced.
19.10.2021 Affidavit filed by RW-2 asserting that the documents filed by NHAI are documents under Section 3E, 3F, 3G and 3H of the National Highways Act and evidences compensation paid to land loser by CALA.
Two applications were filed by NHAI:-
A. Seeking declaration that cross examination in respect of paragraphs of the affidavit filed by RW-1 on which Signature Not Verified Digitally Signed By:ASHEESH KUMAR YADAV O.M.P. (T) (COMM.) 45/2022 Page 34 Signing Date:09.09.2022 18:17:01 RW-1 has been cross examined as listed in paragraph 3 of the affidavits of RW-2 has been concluded.
B. Application to take on record supplementary affidavit filed by RW-2 affirming those paragraph of affidavit of RW-1 on which he has not been cross examined.
Tribunal granted two weeks time to the respondent herein to file its reply to both the applications.
Parties agreed to do physical arbitration. Tribunal fixed hearing for 24.11.2021 to 26.11.2021. 24.11.2021 Cross examination of RW-2 continued. Due to non availability of the members on 26.11.2021 the Tribunal fixed the date of hearing on 8.12.2021 and 9.12.2021. 25.11.2021 Cross examination of RW-2 continued.
6.12.2021 NHAI filed another application dated 6.12.2021 along with supplementary affidavit.
8.12.2021 Hearing on the application of NHAI dated 30.9.2021 (corrected as 19.10.2021) to which the respondent herein filed its reply on 3.11.2021.
Arguments were heard and the application was kept pending and to be decided at the final hearing.
NHAI‟s application dated 6.12.2021 was not accepted by the Tribunal but was taken on record which was to be decided at the final hearing.
9.12.2021 Cross examination of RW-2 continued.
12.1.2022 On 10.1.2022 an email from the counsel for the petitioner NHAI was received which stated that RW-2 has COVID-19 and is not available on the date fixed for cross examination.
The dates were fixed for 30.1.2022 and 1.2.2022 for cross examination.
Signature Not Verified Digitally Signed By:ASHEESHKUMAR YADAV O.M.P. (T) (COMM.) 45/2022 Page 35 Signing Date:09.09.2022 18:17:01 31.1.2022 Cross examination of RW-2 continued.
Application filed by NHAI dated 30.1.2022 and 31.1.2022 but was withdrawn during the hearing after some arguments between the parties. (25 pages document taken on record) 1.2.2022 Cross examination of RW-2 continued. Tribunal fixed the hearing on 16.2.2022.
Note: on the request of the respondent herein the Tribunal fixed the date of hearing on 1.3.2022 since counsel of the respondent herein had undergone surgery and was medically unfit.
1.3.2022 NHAI‟s counsel stated that due to some miscommunication in their office the date was wrongly noted as 8.3.2022 and since the witness is not present adjournment may be granted.
Voluminous documents running into 635 pages were filed by NHAI which were in Hindi and partly handwritten / illegible. The documents were with an application to take on record the documents.
The respondent herein was directed to file reply by 2.3.2022. The same was fixed for hearing on 15.3.2022. 15.3.2022 The arguments on NHAI‟s application to take on record documents running into 635 pages was heard by the Tribunal and order was reserved.
04.04.2022 Application filed by NHAI was rejected. Tribunal fixed next date of hearing as 28.4.2022.
51. The above, reveals the proceedings were adjourned because of filing of applications by parties, completion of pleadings thereof, bereavement in the family of the petitioner‟s witness RW-1, the sole witness of the petitioner succumbing to the COVID-19, hearing Signature Not Verified Digitally Signed By:ASHEESH KUMAR YADAV O.M.P. (T) (COMM.) 45/2022 Page 36 Signing Date:09.09.2022 18:17:01 arguments on the applications, pronouncement of orders, directions to file documents etc.
52. Mr. Tripathi may be right in contending that the cross examination of the sole witness of the respondent was very brief and only a few questions were put to him; he may also be right in stating that the Tribunal should have held more detailed proceedings and endeavoured to complete the cross examination of the witness, but looking at the list of dates, except the brief cross examination conducted by the Tribunal on certain dates, the proceedings have been adjourned for reasons not attributable to the Tribunal.
53. Hence, it cannot be said that the delay in protracting the proceedings was on the Tribunal, which can be a ground for this Court to terminate its mandate. This plea of Mr. Tripathi is also not convincing. As such the reliance placed by Mr. Tripathi on the judgment in the case of Ariba India Pvt. Ltd. (supra) is misplaced.
54. Hence, in the facts of this case, the Court is of the view that the prayers as made by the petitioner cannot be granted. The petition is dismissed. No costs.
55. But before parting, I must state, given the nature of issues raised on the aspect of fee/conduct of proceedings, to which objections were raised by the petitioner, resulting in the filing of the present petition seeking termination of the mandate of the Tribunal, it is left open for the Members of the Tribunal to consider, whether they would like to continue as Members of the Tribunal in the arbitration proceedings.
Signature Not Verified Digitally Signed By:ASHEESHKUMAR YADAV O.M.P. (T) (COMM.) 45/2022 Page 37 Signing Date:09.09.2022 18:17:01 I.A. 6265/2022 (for stay) In view of the order passed in the writ petition, the present application has become infructuous and is dismissed as such.
V. KAMESWAR RAO, J.
SEPTEMBER 09, 2022/aky Signature Not Verified Digitally Signed By:ASHEESH KUMAR YADAV O.M.P. (T) (COMM.) 45/2022 Page 38 Signing Date:09.09.2022 18:17:01