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Partner in the Disputes Practice at the Delhi NCR office of Cyril Amarchand Mangaldas. Omar specialises in dispute resolution, including domestic and international arbitration, writ petitions/regulatory matters and commercial litigation. He also specialises in matters relating to white collar crime and economic offences. He can be reached at omar.ahmad@cyrilshroff.com.

Reinstating Party Autonomy in Ad Hoc Arbitrations

The Supreme Court in Oil and Natural Gas Corporation Limited (“ONGC”) Afcons Gunanusa JV (“Afcons”),[1] while deciding on four cases, inter alia held that:

(i) arbitrators cannot unilaterally decide their own fees but can exercise discretion to apportion the costs, demand deposit, and exercise lien over the delivery of the arbitral award if payments to it remain outstanding;

(ii) the fees of the arbitrator must be fixed at the inception to avoid unnecessary litigation and conflicts between parties at a later stage;

(iii) the term ‘sum in dispute’, which is the header of the first column of the Fourth Schedule to the Arbitration and Conciliation Act, 1996 (“the Arbitration Act”), refers to the sum in dispute in a claim and counter-claim separately and not cumulatively. Consequently, arbitrators are entitled to charge separate fees for the claim and the counter-claim in an ad hoc arbitration proceeding;

(iv) the highest fee payable in an arbitration proceeding governed by the Fourth Schedule is INR 30,00,000, which is a ceiling applicable on a per-arbitrator basis and subject to a sole arbitrator’s entitlement of an additional amount of 25% on the fee payable as per the Fourth Schedule;

(v) the Fourth Schedule is to have a mandatory effect on the stipulation of fees by arbitrators appointed by arbitral institutions designated for such purpose in terms of Section 11 of the Arbitration Act in the absence of an arbitration agreement governing the fee structure; and

(vi) as regards court-appointed arbitrators, the Supreme Court held that the Fourth Schedule is by itself not mandatory in the absence of rules framed by the High Court concerned, and issued directives for fixing of fees in ad hoc arbitrations where arbitrators are appointed by courts.Continue Reading Reinstating Party Autonomy in Ad Hoc Arbitrations

Supreme court draws lakshman rekha on powers of a court under section 34: no power to modify an award

  1. The Supreme Court handed down a significant judgment[1] on the scope of power of a Court hearing a challenge to an arbitral award under Section 34 of the Arbitration and Conciliation Act, 1996 (“Arbitration Act”). The Supreme Court reiterated that there is no power under Section 34 to modify or vary an arbitral award.

Continue Reading Supreme court draws lakshman rekha on powers of a court under section 34: No power to modify an award

Indian Courts continue with the pro-enforcement approach

INTRODUCTION

1. On June 18, 2021, the Delhi High Court, in proceedings seeking enforcement of arbitral awards against foreign states, has reiterated the principle of restrictive immunity and upheld the basic tenets of International Commercial Arbitration – flexibility, stability, efficiency, and its legally binding nature. The Court held that prior consent of the Central Government under Section 86 of the Code of Civil Procedure, 1908 (“Code”), is not required for enforcement of arbitral awards against a foreign state. Importantly, it also held that foreign state cannot claim sovereign immunity for the purpose of stalling enforcement of an arbitral award rendered against it, and which arises out of a commercial transaction.Continue Reading Indian Courts continue with the pro-enforcement approach: Delhi HC reiterates principle of restrictive immunity in enforcement of arbitral awards against foreign states