Kerala High Court
Jacob Mathew vs M/S. P.T.C. Builders on 25 August, 2025
1
O.P.(C) NO.1661 OF 2025
2025:KER:64796
'CR'
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT
THE HONOURABLE MR. JUSTICE K. NATARAJAN
MONDAY, THE 25TH DAY OF AUGUST 2025 / 3RD BHADRA, 1947
O.P.(C) NO.1661 OF 2025
(AGAINST THE ORDER DATED 29.03.2025 IN CMA(Arb) NO.567 OF 2022
OF ASSISTANT SESSIONS COURT/I ADDITIONAL SUB COURT, ERNAKULAM)
PETITIONER/PETITIONER:
JACOB MATHEW, AGED 75 YEARS, S/O. LATE M.JACOB,
RESIDING AT MULAKKELATHU HOUSE, PATHANAMTHITTA P.O.,
PATHANAMTHITTA, PIN - 689 645
BY ADVS.
SRI.V.PHILIP MATHEWS
SMT.ATHULYA SEBASTIAN
SMT.LAKSHMI S.
RESPONDENTS/RESPONDENTS:
1 M/S. P.T.C. BUILDERS, PTC TOWERS, S. S. KOVIL ROAD,
THAMPANOOR, THIRUVANANTHAPURAM,
REPRESENTED BY ITS MANAGING PARTNER, PIN - 695 001
2 BIJU JACOB, STYLING HIMSELF AS MANAGING PARTNER,
P.T.C. BUILDERS, PTC TOWERS, S. S. KOVIL ROAD,
THAMPANOOR, THIRUVANANTHAPURAM, PIN - 695 001
2
O.P.(C) NO.1661 OF 2025
2025:KER:64796
3 HONOURABLE JUSTICE MR.B.KEMAL PASHA,
FORMER JUDGE, HIGH COURT OF KERALA, SOLE ARBITRATOR,
PALLIPPATTU BUNGLOW, KANNANTHODATHU ROAD,
EDAPALLY P.O., KOCHI, PIN - 682 024
BY ADVS.
SRI.SIDHARTH A.MENON - FOR R1 & R2
SHRI.V.AJAKUMAR - FOR R1 & R2
SMT.VINITHA S.T. - FOR R1 & R2
SMT.SANDRA ANN T. JOSEPH - FOR R1 & R2
SHRI.M.P.RAMNATH - FOR R3
SRI.K.J.SEBASTIAN - FOR R3
SEI.M.VARGHESE VARGHESE - FOR R3
SMT.UMA R.KAMATH - FOR R3
SMT.S.SANDHYA - FOR R3
SHRI.BEPIN PAUL - FOR R3
SRI.SHALU VARGHESE - FOR R3
SRI.ANTONY THARIAN - FOR R3
SMT.SHANTHI JOHN - FOR R3
SMT.POOJA VENKAT - FOR R3
THIS OP (CIVIL) HAVING FINALLY HEARD ON 18.08.2025, THE COURT ON
25.08.2025 DELIVERED THE FOLLOWING:
3
O.P.(C) NO.1661 OF 2025
2025:KER:64796
'CR'
JUDGMENT
(Dated: 25th August, 2025) This original petition is filed by the petitioner, being aggrieved by the order passed by the Commercial Court-1, Ernakulam, in M.A. (Arb.) No.567 of 2022 dated 29.03.2025, for having rejected the application.
2. Heard the arguments of Sri.V.Philip Mathews, learned counsel for the petitioner, and Sri.V.Ajakumar, Sri.Sidharth A.Menon, counsel for respondents 1 and 2, as well as Sri.M.P.Ramnath, counsel appearing for the 3rd respondent.
3. The case of the petitioner is that the petitioner raised 4 O.P.(C) NO.1661 OF 2025 2025:KER:64796 the arbitration proceedings before the 3rd respondent/arbitrator, namely, Hon'ble Justice Mr. B. Kemal Pasha, former Judge of the High Court of Kerala (hereinafter referred to as 'the Arbitrator'), and respondents 1 and 2 appeared and filed a counterclaim in the proceedings. During the proceedings, both petitioner and respondent Nos.1 and 2 came to a settlement, and an interim award came to be passed by the Arbitrator. The Arbitrator also passed a final award in the proceedings on 28.07.2021. Subsequently, he has demanded an arbitration fee of Rs.27,59,375/-, after deducting Rs.3,00,000/- each, already paid by both parties, and the balance payable was Rs.21,59,375/-, and 50% of the petitioner's share of the fee demanded was Rs.10,79,680/-.
5O.P.(C) NO.1661 OF 2025 2025:KER:64796
4. The petitioner, being the claimant before the Arbitrator, was not satisfied with the award passed by the sole arbitrator, as well as the fee demanded by him, which was exorbitant, and according to him, the fee for the claim was already paid, and the settlement had already arrived, therefore, the question of passing the final award does not arise. Hence, the award passed by the 3rd respondent/Arbitrator was illegal; he wants to challenge the same before the District Judge under Section 34 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as 'the Act').
5. Further case of the petitioner is that in order to challenge the arbitration award, he has to pay the fees and costs of the arbitration before the District Court. For which, he has 6 O.P.(C) NO.1661 OF 2025 2025:KER:64796 to produce a copy of the award before the District Court, but the Arbitrator did not supply the copy of the Arbitration Award due to non-payment of the Arbitration fees. Therefore, the petitioner filed a petition in A.R.No.60 of 2021, before the High Court for fixing the Arbitration fees and costs, and also challenged that the arbitration fees demanded by the Arbitrator as exorbitant. This Court directed the petitioner to approach the District Court for fixing the arbitration fees, and then, the award shall be delivered to the petitioner without demanding any fees more than what is fixed by the District Judge.
6. Subsequently, respondents 1 and 2 filed Review Petition No.490 of 2022 before the High Court, for review of the order, the High Court passed in A.R. No.60 of 2021. Once 7 O.P.(C) NO.1661 OF 2025 2025:KER:64796 again, this Court dismissed the Review Petition filed by respondents 1 and 2. Subsequently, the 3rd respondent/ sole arbitrator filed another Review Petition No.787 of 2022, by reviewing the order of this Court, contending that the petitioner shall deposit the arbitration fees demanded by the Arbitrator, and without depositing, he cannot invoke the provisions of Section 39 of the Act, without payment of the charges demanded by the Arbitrator. Therefore, this Court has modified the order, permitting the petitioner to offer a bank guarantee for the arbitration fees payable by the petitioner vide order dated 17.10.2022. Subsequent to the orders passed by this Court, the petitioner filed an application before the District Judge for fixing the arbitration fees by filing an application 8 O.P.(C) NO.1661 OF 2025 2025:KER:64796 under Section 39(2) of the Arbitration and Conciliation Act. In the application, the Commercial Court in M.A.(Arb.) No.567 of 2022 dismissed the application on 29.3.2025. Being aggrieved by the same, the petitioner is before this court.
7. Learned counsel for the petitioner strenuously contended that the Commercial Court committed an error in dismissing the application, filed by the petitioner, for fixing the arbitration fees as it was exorbitant. But the court below has stated that it lacks jurisdiction, which is not correct. The Commercial Court has having power to deal with the matter and fix the arbitration fees in accordance with the law in the schedule produced therein in the Act, and the demand made by the 3rd respondent/Arbitrator was exorbitant and there is no 9 O.P.(C) NO.1661 OF 2025 2025:KER:64796 such claim made by the parties in the proceedings.
8. The specific case of the petitioner is that the claim made by the petitioner is for Rs.83,85,000/-. Whereas the defendant also made a counterclaim, which is also a meager amount, is more than his claim/ i.e., Rs.1,29,00,000/-, and there is no claim either by the petitioner or the respondent regarding the amount of Rs.24,40,00,000/- as stated by the Arbitrator in his award for fixing the fees as Rs.27,59,375/- The matter has been settled between the parties for registering the document, and once the award has been passed, the Arbitrator has no authority to pass one more arbitral award; he becomes "Functus-Officio". Therefore, the petitioner challenged the award before the District Judge, and the award 10 O.P.(C) NO.1661 OF 2025 2025:KER:64796 has already been set aside by the District Judge; the matter is now pending before the High Court in the appeal filed by respondent Nos.1 and 2. Therefore, it is contented that there is no claim of either petitioner or respondent in respect of Rs.24,40,00,000/- valued by the Arbitrator in the arbitral award. Therefore, the fees demanded by him for the claim of Rs.24,40,00,000/- are exorbitant, and there is no such claim. Such being the case, it is necessary to fix the fees by the Commercial Court under Section 39(2) of the Arbitration and Conciliation Act, but the Commercial Court dismissed the application without referring to the documents and without going to the merits of the case. Therefore, prayed for setting aside the order or remanding the matter for fresh consideration. 11 O.P.(C) NO.1661 OF 2025 2025:KER:64796
9. The counsel for the respondents Nos.1 and 2 has seriously objected to the petition and contended that the claim made by the petitioner is not only for Rs.83,85,000/-, but there were 8 claims made by the petitioner before the Arbitrator in respect of execution of document, cancelling the GPA, and the worth of the construction of the building. The share of the petitioner was 14 flats, which cost more than one crore per flat. Respondent Nos. 1 and 2 have put up 65 apartments, and the respondent has entitled 52 apartments. There were 8 claims made by the petitioner, which were not properly valued; therefore, the Arbitrator fixed the fees by relying upon the valuation made by the parties before the 'RERA' Court. Therefore, half of the fees demanded by the Arbitrator have 12 O.P.(C) NO.1661 OF 2025 2025:KER:64796 been paid by respondent Nos.1 and 2, therefore, the petitioner is required to pay the remaining fee, even otherwise when he claimed the costs, he has claimed only Rs.10,00,000/- before the District Court after passing the judgment by setting aside the award by the District Judge and he has not claimed the amount demanded by the Arbitrator, therefore the counsel has supported the order passed by the Commercial Court and prayed for dismissing the petition.
10. The counsel appearing for the sole Arbitrator/3rd respondent has seriously objected to the petition mainly on the ground that the Tribunal has gone against the claim made by the Arbitrator regarding fees, and the petition made under Article 227 of the Constitution of India is not maintainable. It 13 O.P.(C) NO.1661 OF 2025 2025:KER:64796 is further contended that once the award has been passed, it is the duty of the claimant or the counterclaimant to deposit the fee and costs while it is challenged, and the Arbitrator or the Tribunal has a lien over the arbitral award under Section 39(1) of the Arbitration and Conciliation Act. It is also contended that the application filed by the appellant is maintainable only when there is no reference in the award regarding payment of the arbitration fee as per Schedule-IV, then only he has to approach the Commercial Court for fixing the arbitration fees. When the Arbitrator has mentioned the grounds for fixing the fees in the award at issue Nos.117, 118, and 119 of the award. Therefore, when the award itself contains the grounds for fixing the fee, the same cannot be challenged before the 14 O.P.(C) NO.1661 OF 2025 2025:KER:64796 District Court under Section 39(2) of the Arbitration and Conciliation Act; therefore, prayed for dismissing the petition.
11. Having heard the arguments and perused the records.
The points that arise for consideration are:
(i) Whether the original petition filed by the petitioner under Article 227 is not maintainable, as against the order passed by the Commercial Court under Section 39(2) of the Arbitration and Conciliation Act in view of Section 13(1) of Commercial Court Act?
(ii) Whether the impugned order under challenge passed by the Commercial Court under Section 39(2) of the Arbitration and Council Act called for interference?
12. Upon hearing the arguments and perusing the records, which reveal, the petitioner raised the arbitration proceedings before the 3rd respondent/sole arbitrator, making 15 O.P.(C) NO.1661 OF 2025 2025:KER:64796 various claims, and respondents 1 and 2 made a counterclaim. Thereafter, there was some settlement between the parties, and an interim award was passed on 25.11.2019. Subsequently, the 3rd third respondent/Arbitrator has passed the final award, and after passing the final award, arbitration fee has been demanded, the petitioner wants to file the petition before the District Court under Section 34 of the Arbitration and Conciliation Act, and prior to that, he has to deposit the cost of the award, as there was lien over the award regarding costs and fees demanded by the Arbitral Tribunal. The petitioner approached the High Court for reducing the costs and fees, this Court in A.R. No.60 of 2021, permitted the petitioner to raise the contention and challenge the award under Section 34 of the 16 O.P.(C) NO.1661 OF 2025 2025:KER:64796 Act and directed the petitioner to approach the District Court/Competent Court under Section 39 of the Act for fixing the costs and fees. Accordingly, the petitioner approached the Commercial Court under Section 39(2) of the Arbitration and Conciliation Act for fixation of the fee for the cost of the arbitration, which came to be dismissed, hence the petition.
13. The 3rd respondent/Arbitrator has strenuously contended that any order passed by the Commercial Court is appealable to the Commercial Appellate Court under Section 13(1) of the Commercial Courts Act. Therefore, by bypassing the Commercial Appellate Court, by filing the Original Petition under Article 227 of the Constitution of India, this Original Petition is not maintainable; and prayed for the 17 O.P.(C) NO.1661 OF 2025 2025:KER:64796 dismissal of the petition.
14. Second contention of the Arbitrator, as well as respondents 1 and 2, is that there were 8 claims made by the petitioner in the arbitration proceedings. Therefore, the award has been passed by the Arbitrator based upon the claim and counter claim made by both the parties, and the value of the total claim as 24.40 Cores, the same was made as a ground in issue No.11 at paragraph 118 to 120 in the award and fixed the arbitration charges as per the Kerala High Court Fee Payable to Arbitrators Rules, 2017, and 4th schedule to the Arbitration and Conciliation Act, 1996, amended in the year 1999. As per the explanatory memorandum, the said amendment, which came into force on 23.10.2015 and fixed the claim amount as 18 O.P.(C) NO.1661 OF 2025 2025:KER:64796 Rs.24,40,00,000/-, by obtaining the total project cost report from RERA Court and the income tax department.
15. On the other hand, the case of the petitioner is that the claim is only Rs.83,85,000/-, and the respondent's claim is also nearly Rupees Two crores, and there is no case of both parties claiming Rs.20.40 Crores. Therefore, fixing the fees is not in accordance with Schedule-IV of the Arbitration and Conciliation Rules. Therefore, the District Judge is required to fix the fee and costs of the Arbitration Tribunal as per Section 39(2) of the Act.
16. The 1st contention of the respondent is that an order passed by the Commercial Court is appealable to the Commercial Appellate Court under Section 13(1) of the 19 O.P.(C) NO.1661 OF 2025 2025:KER:64796 Commercial Courts Act. In this regard, it is necessary to refer to Section 13(1) of the Commercial Court Act, which reads as follows:
"Appeals from the decree of Commercial Courts and commercial divisions. - (i) any person aggrieved by the judgment or order of the Commercial Court, below the level of a District Judge, may appeal to the Commercial Appellate Court within a period of 60 days from the date of judgment or order".
17. Admittedly, the petitioner filed an Application under Section 39(2) before the Commercial Court, which is the Sub Judge, Ernakulam. If any order passed under Section 39 of the Arbitration and Conciliation Act, or any order passed by the Commercial Court, which is Sub Court, then it is an appealable order before the District Judge under Section 13(1) of the 20 O.P.(C) NO.1661 OF 2025 2025:KER:64796 Commercial Court Act. It is worth mentioning as per the Kerala Gazette, G.O.(Ms.)No.51/2020/Home, dated Thiruvananthapuram, 24th February, 2020, by Home (C) Department, as follows:
S. R. O. No. 175/2020
(1) In exercise of the powers conferred by sub-sections (1) and (2) of section 3 of the Commercial Courts Act, 2015 (Central Act 4 of 2016), the Government of Kerala in consultation with the High Court of Kerala, hereby constitute the Commercial Courts for the districts specified in column (3) in the Schedule below and designate the Subordinate Judges' Courts mentioned in column (2) of the Schedule as Commercial Courts for the purpose of exercising jurisdiction and powers conferred on those Courts under the said act, namely:-
SCHEDULE Sl.No. Name of the Court Area of jurisdiction (Judicial district) (1) (2) (3) Xx xx xx S. R. O. No. 177/2020 In exercise of the powers conferred by section 3A of 21 O.P.(C) NO.1661 OF 2025 2025:KER:64796 the Commercial Courts Act, 2015 (Central Act 4 of 2016), the Government of Kerala, in consultation with the High Court of Kerala, hereby designate the Principal District Courts in each district as Commercial Appellate Courts with jurisdiction over the respective Judicial Districts for the purpose of exercising the jurisdiction and powers conferred upon such courts under the said Act.
Explanatory Note (This does not form part of the Notification, but is intended to indicate its general purport.) Sub-section (3A) of section 3 of the Commercial Courts Act, 2015 (Central Act 4 of 2016) provides that except the territories over which the High Courts have ordinary original civil jurisdiction. The State Government may, after consultation with the concerned High Court, by notification, designate such number of Commercial Appellate Courts at District Judge level, as it may deem necessary, for the purposes of exercising the jurisdiction and powers conferred on those courts under the said Act Government have therefore, after consultation with the High Court of Kerala, decided to designate the Principal District Court in each district as Commercial Appellate Courts with jurisdiction over the respective judicial district for the purposes of the said Act The notification is intended to achieve the above object.
18. The Coordinate Bench of this Court in (2025 (5) KHC 153) Sethulakshmi V.R. (Dr.) v. Canara Bank, 22 O.P.(C) NO.1661 OF 2025 2025:KER:64796 Kottayam, held that, both the civil revision under Section 115 of C.P.C. as well as petition under Article 227 of Constitution of India is maintainable, as against the order passed by the Commercial Appellate Court under Section 13 of the Commercial Court Act. Wherein, this court has also held that Article 227 of the Constitution of India or Section 115 of C.P.C. is maintainable, as against the order passed by the Commercial Appellate Court under Section 13. But here in this case, the order was passed by the Commercial Court under Section 39 of the Act, which is Sub Court, and hence the appeal lies to the Commercial Appellate Court under Section 13(1) of the Commercial Court Act. The respondent counsel also relied upon the judgment of the Hon'ble Supreme 23 O.P.(C) NO.1661 OF 2025 2025:KER:64796 Court in [(2020) 15 SCC 706] Deep Industries Limited v. Oil and Natural Gas Corporation Ltd. And Ors., wherein, the Hon'ble Apex Court had held that when a statutory remedy is available under Section 115 of C.P.C., the High Court should not entertain the Original Petition under Article 227 of the Constitution of India.
19. In another case, [(2022) 1 SCC 75] Bhaven Construction v. Executive Engineer Sardar Sarovar Narmada Nigam Ltd and Ors., at paragraph 17, which reads as follows:
17. In any case, the hierarchy in our legal framework, mandates that a legislative enactment cannot curtail a Constitutional right. In Nivedita Sharma v. Cellular Operators Association of India, MANU/SC/1538/2011: (2011) 14 SCC 337, this Court referred to several judgments and held:
11. We have considered the respective arguments/submissions. There cannot be any dispute that the 24 O.P.(C) NO.1661 OF 2025 2025:KER:64796 power of the High Courts to issue directions, orders or writs including writs in the nature of habeas corpus, certiorari, mandamus, quo warranto and prohibition Under Article 226 of the Constitution is a basic feature of the Constitution and cannot be curtailed by parliamentary legislation L. Chandra Kumar v. Union of India, MANU/SC/0261/1997: (1997) 3 SCC 261. However, it is one thing to say that in exercise of the power vested in it Under Article 226 of the Constitution, the High Court can entertain a writ petition against any order passed by or action taken by the State and/or its agency/instrumentality or any public authority or order passed by a quasi-judicial body/authority, and it is an altogether different thing to say that each and every petition filed Under Article 226 of the Constitution must be entertained by the High Court as a matter of course ignoring the fact that the aggrieved person has an effective alternative remedy. Rather, it is settled law that when a statutory forum is created by law for redressal of grievances, a writ petition should not be entertained ignoring the statutory dispensation.
20. Therefore, when an alternative remedy is available before the Commercial Appellate Court under Section 13(1) of the Commercial Court Act, the petitioner shall approach the Commercial Appellate Court within 60 days from the date of 25 O.P.(C) NO.1661 OF 2025 2025:KER:64796 the order passed by the Commercial Court/Sub Court. Therefore, directly filing the petition under Article 227 of the Constitution of India is not maintainable when an alternative efficacious remedy is available to the petitioner under Section 13(1) of the Commercial Court Act. Hence, the answer to point No.1 against the petitioner stated that the petition is not maintainable.
21. As regarding to the order under challenge passed by the Commercial Court, point No.2, wherein the Commercial Court has stated, it has no jurisdiction to entertain the petition and it lacks jurisdiction, in a considered view, the Commercial Court has having power to determine the costs and fees of the Arbitrator under Section 39(2) of the Arbitration and 26 O.P.(C) NO.1661 OF 2025 2025:KER:64796 Conciliation Act. For the convenience, Section 39 of the Arbitration and Conciliation Act, 1996 reads as follows:
39. Lien on arbitral award and deposits as to costs (1) Subject to the provisions of sub-section (2) and to any provision to the contrary in the arbitration agreement, the arbitral Tribunal shall have a lien on the arbitral award for any unpaid costs of the arbitration.
(2) If in any case an arbitral Tribunal refuses to deliver its award except on payment of the costs demanded by it, the court may, on an application in this behalf, order that the arbitral Tribunal shall deliver the arbitral award to the applicant on payment into court by the applicant of the costs demanded, and shall, after such inquiry, if any, as it thinks fit, further order that out of the money so paid into court there shall be paid to the arbitral Tribunal by way of costs such sum as the court may consider reasonable and that the balance of the money, if any, shall be refunded to the applicant.
(3) An application under sub-section (2) may be made by any party unless the fees demanded have been fixed by written agreement between him and the arbitral Tribunal, and the arbitral Tribunal shall be entitled to appear and be heard on any such application.
(4) The court may make such orders as it thinks fit respecting the costs of the arbitration where any question arises respecting such costs and the arbitral award contains no sufficient provision concerning them. 27 O.P.(C) NO.1661 OF 2025 2025:KER:64796
22. On a careful reading of sub Section 2 of Section 39, wherein the Arbitral Tribunal refused to deliver its award, except on payment of the costs demanded by it, and the aggrieved person can file application under Section 39(2) before the Court, and the Court shall make an enquiry and then pass an order for fixing the arbitration fees. However, prior to challenging the arbitration fees or award, the concerned parties approaching the court shall deposit the amount demanded by the Arbitration Tribunal as per Section 39(1) of the Arbitration and Conciliation Act, the Arbitrators having a lien over the award under payment fees and costs. Therefore, the 3rd respondent/sole Arbitrator rightly demanded the fees and costs, and before challenging the award under Section 34(2) of 28 O.P.(C) NO.1661 OF 2025 2025:KER:64796 the Act; the petitioner shall deposit the costs and fees demanded by the Arbitrator. However, the amount was not deposited, and as per the direction of this court in R.P. No.490 & 787 of 2022, the petitioner was permitted to furnish security by modifying the earlier order dated 30.03.2022 passed by this Court. However, there is no amount of fees or costs deposited by the petitioner, and it is required by law to deposit the costs and fees demanded by the Arbitrator. Of course, the award passed by the Arbitrator has been set aside by the District Judge under Section 34 of the Act. However, whether the demand for a fee is in accordance with the provisions or not, it has to be considered.
23. The arbitrator has stated at paragraphs 118, 119, and 29 O.P.(C) NO.1661 OF 2025 2025:KER:64796 120 of the award, which is stated as follows:
118. The total project cost as reported before RERA as well as before the Income Tax Department is Rs.24,40,00,000/-
(twenty four crores and forty lakhs), and therefore, the fee payable to the Arbitrator has to be computed on the said amount. The Hon'ble High Court of Kerala had formulated the Kerala High Court (Fee Payable to Arbitrators) Rules, 2017. But the same has been superseded by the introduction of the Fourth Schedule to the Arbitration and Conciliation Act, 1996, in the year 2019. As per the Explanatory Memorandum, the said amendment has come into force with effect from 23.10.2015
119. As per serial No.6 of the amended Fourth Schedule, the fee payable to the Arbitrator is Rs 22,07,500/- (twenty-two lakhs seven thousand five hundred). As per the "Note" to the said Fourth Schedule, in the event the arbitral Tribunal is a sole arbitrator, he shall be entitled to an additional amount of twenty-five percent on the fee payable as per the above. Therefore, being a sole arbitrator, this arbitral Tribunal is entitled to a total fee of Rs.27,59,375/- (twenty-seven lakhs fifty-nine thousand three hundred and seventy-five). The Arbitrator had inspected the project twice by travelling from Kochi to Pathanamthitta at the own expense of the Arbitrator, for which the Arbitrator is not claiming any further amount. Therefore, the total amount of fee comes to Rs.27,59,375/- (twenty-seven lakhs fifty-nine thousand three hundred and seventy-five), which is payable by both the parties in equal shares.
120. The parties have so far paid an amount of Rs.3,00,000/- each. The total balance amount payable is Rs.21,59,375/- (twenty-one lakhs fifty-nine thousand three hundred and 30 O.P.(C) NO.1661 OF 2025 2025:KER:64796 seventy-five). Therefore, the parties have to pay the said amount in equal shares, i.e. Rs. 10,79,680/-(ten lakhs seventy-nine thousand six hundred and eighty) each, within seven days from the date of receipt of the intimation of the passing of this award. In case of failure of the Claimant to pay the amount, the Respondents shall pay the said amount also and in such case, the Respondents can recover it from the Claimant and the 13 apartments earmarked towards his share. The same will be applicable on such failure, if any, from the part of the Respondents as well.
24. The 4th schedule of the Arbitration and Consultation Act prescribed fees and costs chargeable by the Arbitration Tribunal.
Sl.No. Sum in dispute Model fee
(1) (2) (3)
1. Up to Rs.5,00,000 Rs.45,000
2. Above Rs.5,00,000 and up Rs.45,000 plus 3.5 per cent of the claim
to Rs.20,00,000 amount over and above Rs.5,00,000
3 Above Rs.20,00,000 and up Rs.97,500/- plus 3 per cent of the claim
to Rs.1,00,00,000 amount over and above Rs.20,00,000
4. Above Rs.1,00,00,000 and Rs.3,37,500/- plus 1 per cent of the claim
up to Rs.10,00,00,000 amount over and above Rs.1,00,00,000
5. Above Rs.10,00,00,000 and Rs.12,37,500/- plus 0.75 per cent of the up to Rs.20,00,00,000 claim amount over and above Rs.10,00,00,000
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 31 O.P.(C) NO.1661 OF 2025 2025:KER:64796 Note:- In the event the arbitral tribunal is a sole arbitrator, he shall be entitled to an additional amount of twenty-five per cent on the fee payable as per the above.
25. In view of the 4th schedule as per Serial No.6, the Arbitrator calculated the project cost of Rs.24,40,00,000/-, and concluded that this was the claim made by the parties; therefore, the fees have been demanded. It has been calculated for Rs. 27,59,375/-, and earlier the parties had paid Rs.3,00,000/- each, so Rs.6,00,000/- has been deducted, and the balance of Rs.21,59,375/- was the final fee, and the half share of the petitioner was Rs.10,79,680/-.
26. Admittedly, these costs and fees have not been deposited, and if the said amount is deposited by the petitioner, then he can recover the cost of the arbitration expenditure or 32 O.P.(C) NO.1661 OF 2025 2025:KER:64796 fees when the award has been set aside by the District Court under Section 34.
27. It is also brought to the notice that he has calculated the cost claimed by the petitioner by filing the cost memo, claiming only Rs.10,00,000/- and now coming back to Section 39(2) of the Arbitration and Conciliation Act, where the application required to be considered only if there is no fees/arbitration charge mentioned /agreed by the parties or it is not as per Schedule-IV of the Arbitration Conciliation Act. If the amount demanded is more than the claim amount, then the court has to fix the arbitration fees, and the remaining excess amount is repayable to the petitioner/claimant. Therefore, as per sub-section 4, when the arbitration award itself contains 33 O.P.(C) NO.1661 OF 2025 2025:KER:64796 costs of the arbitration, when the amount demanded is excessive, then only the Commercial Court has to interfere and fix the cost. In this case, as per the submission made by the respondent counsel, the claim amount is more than Rs.99 Crores, as there are 65 plots/a high-rise building constructed under the project. The petitioner is the owner of the land, and respondent Nos.1 and 2 are the builders; 14 plots fell to the share of the plaintiff/petitioner. If this amount is calculated, it will be more than 24 crores. Therefore, I am of the view that, this Court is not inclined to interfere with the order, however, it is justified to observe, the matter need not go before the Commercial Court once again for fixing the costs and the fees of the Arbitrator.
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28. It is unfortunate that the sole Arbitrator, being a former judge of the High Court of Kerala, has struggled to get the fee after passing the award, and the petitioner cleverly mentioned only one figure in the claim i.e. is Rs.83,85,000/-, but the remaining 7 claims, he has not mentioned the value of those claims. Whereas, the Arbitrator obtained the project costs from the RERA Court as well as the Income Tax Authority, where it was declared by the parties and fixed the fees/costs. Therefore, it cannot be said that it is an exorbitant and excessive fee demanded by the 3rd respondent/Arbitrator. It is worth mentioning that respondents 1 and 2 already paid their half share of fees, whereas the petitioner claimant was reluctant to pay the fees and filed an application after 35 O.P.(C) NO.1661 OF 2025 2025:KER:64796 applications to this court and the commercial court by denying the legal entitlement of the respondent/Arbitrator.
29. The Hon'ble Supreme Court in [(2024) 4 SCC 481] Oil and Natural Gas Corporation Ltd., v. Afcons Gunanusa JV, held that, regarding fees of the Arbitrator, it must be fixed at the inception to avoid unnecessary allegations and conflicts between the parties and the Arbitrator at a later stage. Issue some directives to the Government proceedings and fix the fees also in accordance with the 4th schedule of the Arbitration and Conciliation Act, wherein the highest fee fixed in serial No.6 of the 4th schedule was Rs.30,00,000/-.
Here, in this case, the claim was not more than Rs.30 lakhs. Therefore, the fees and charges demanded by the 36 O.P.(C) NO.1661 OF 2025 2025:KER:64796 Arbitrator/3rd respondent cannot be said to be exorbitant in order to interfere.
Therefore, the Commercial Court rightly observed the petition filed by the petitioner under Section 39(2) of the Arbitration and Conciliation Act, and this court does not find any error in interfering with the order. Therefore, I am of the view, the petition is devoid of merit and is liable to be dismissed on both counts.
Accordingly, this Original Petition is dismissed.
Sd/-
K. NATARAJAN, JUDGE ss 37 O.P.(C) NO.1661 OF 2025 2025:KER:64796 APPENDIX OF OP(C) 1661/2025 PETITIONER EXHIBITS Exhibit P1 TRUE COPY OF THE ORDER DATED 05-11-2018 BY THIS HON'BLE COURT IN A.R. NO. 67/2018 Exhibit P2 A TRUE COPY OF THE AWARD DATED 25-11-2019 (MISTAKENLY DESCRIBED AS INTERIM AWARD) PASSED BY THIRD RESPONDENT Exhibit P3 COPY OF I.A.NO.1/2020 IN A.R.NO.67/2018 Exhibit P4 COPY OF ORDER DATED 9.3.2020 IN I.A.NO.1/2020 IN A.R.NO.67/2018 Exhibit P5 COPY OF (READABLE COPY) THE ORDER SHEET IN A.R.NO.67 OF 2018 RECORDED BY THE THIRD RESPONDENT Exhibit P6 A COPY OF NOTICE DATED 28.7.2021 ADDRESSED TO PETITIONER AND RESPONDENTS ONE AND TWO Exhibit P7 A COPY OF REPLY DATED 30.7.2021 SENT BY THE PETITIONER Exhibit P8 COPY OF LETTER DATED 2.8.2021 SENT BY COUNSEL FOR PETITIONER TO THE THIRD RESPONDENT Exhibit P9 COPY OF INTERIM ORDER DATED 6.8.2021 IN A.R.NO.60/2021 Exhibit P10 A COPY OF NOTICE DATED 6.8.2021 FROM THE THIRD RESPONDENT TO PETITIONER AND RESPONDENTS ONE AND TWO Exhibit P11 COPY OF ORDER DATED 30.3.2022 IN A.R. NO. 60 OF 2021 Exhibit P12 COPY OF ORDER DATED 21.7.2022 IN R.P.NO.490 OF 2022 Exhibit P13 COPY OF ORDER DATED 17.10.2022 IN R.P.NO.787/2022 (FILING NO.) Exhibit P14 COPY OF C.M.A.(ARB) NO.567/2022 ON THE FILE OF COMMERCIAL COURT-I, ERNAKULAM (WITHOUT ANNEXURES AS RELEVANT ANNEXURES ARE SEPARATELY PRODUCED) Exhibit P15 COPY OF OBJECTION DATED 31.8.2023 FILED BY THIRD RESPONDENT TO C.M.A.(ARB.) NO.567/2022 Exhibit P16 COPY OF REPLY DATED 23.6.2024 FILED BY PETITIONER AGAINST EXHIBIT P15 OBJECTION 38 O.P.(C) NO.1661 OF 2025 2025:KER:64796 Exhibit P17 COPY OF FINAL AWARD DATED 28.7.2021 IN A.R.NO.67/2018 ENGROSSED IN STAMP PAPERS, RECEIVED FROM THE COMMERCIAL COURT Exhibit P18 COPY OF ORDER DATED 29-03-2025 IN M.A.(ARB) NO.567/2022 PASSED BY THE COMMERCIAL COURT-I, ERNAKULAM Exhibit P19 A COPY OF I.A.NO.23/2025 IN C.M.A.(ARB.) NO.567/2022 FILED BY THIRD RESPONDENT BEFORE THE COMMERCIAL COURT Exhibit P20 COPY OF COUNTER AFFIDAVIT DATED 28.6.2025 FILED BY PETITIONER AGAINST EXHIBIT P19 BEFORE COMMERCIAL COURT 1,ERNAKULAM Exhibit P21 TRUE COPY OF THE CLAIM STATEMENT BY THE PETITIONER FILED BEFORE THE 3RD RESPONDENT ARBITRATOR Exhibit P22 TRUE COPY OF THE COUNTER STATEMENT AND COUNTER CLAIM FILED BY RESPONDENT 1 AND 2 BEFORE THE THIRD RESPONDENT Exhibit P23 TRUE COPY OF THE ORDER DATED 06/07/2023 IN CMA(ARB) NO. 567/2022 PASSED BY COMMERCIAL COURT - I, ERNAKULAM Exhibit P24 TRUE COPY OF IA NO. 11/2023 IN CMA(ARB) NO. 567/2022 Exhibit P25 TRUE COPY OF THE ORDER DATED 29/03/2025 IN OP(ARB) NO. 5/2023