ARBITRATOR’S FEES: INCONSISTENCIES IMPINGING ON REMEDIES

Abstract

Arbitration is the alternative panacea of long-standing litigations. The defining traits and particularities of arbitration include a combination of procedural and substantive laws, with party autonomy forming the basis of such laws and a preferable choice among parties to resolve their dispute amicably. Even as the market of arbitration continues to flourish, the dispute resolution mechanism has a long way to go, owing to the complexities in its present-day implementation, such as the challenges faced in the exorbitant fees of the arbitrators, enforcement of awards, et al. Repeated efforts have been made by various amendments in the law to make the mechanism more efficient, but lexical inconsistencies have created larger complexities. One such contentious loophole in the present regime is the diverse inferences drawn by arbitral tribunals and courts, which is the detrimental conclusion of fixing the ‘Arbitrator’s fee’, where the fee is not pre-determined in the arbitration agreement. The 1996 Act hardly provides any concrete guidance as to how the arbitral tribunal should determine its fee. The exorbitant fee charged by the arbitrator(s) on a per-sitting basis without much clarity, has been a major reason for litigants to disregard this mechanism. However, this long drawn debate has been relieved to some extent by the 2015 Amendment with the introduction of the Fourth Schedule. This Schedule lays down a model fee structure for deciding the arbitrator’s fee, based on the ‘sum in dispute’. Further amendments concerning the arbitrator’s fee were made by the 2019 Amendment but the tangible benefits of the amendments are still questionable.