Amendments made by Arbitration Amendment Act, 2019 have been somewhat a non-starter.
Fourth Schedule came into effect on 23.10.2015. Fourth Schedule is not applicable to International Commercial Arbitrations and where Arbitrators’ Fees are to be determined in accordance with Rules of Arbitral Institutions.
Arbitrator’s Fees must be fixed at inception to avoid unnecessary litigation and conflicts. It is open to parties to specify modalities for determining same. There is no enabling provision under Arbitration Act empowering an Arbitrator to unilaterally fix its remuneration. It is unrequired of parties to pay costs they believe to be unreasonable.
In ad hoc Arbitrations, ideally, Arbitrators’ Fees should be decided through an arrangement between parties and Arbitrators. When unable to reach a consensus, it is open for Arbitral Tribunal to charge as stipulated in Fourth Schedule. We currently deal with instances of ad hoc Arbitrations where Fourth Schedule has been made applicable.
– Hon’ble Justice Dr. D.Y. Chandrachud, Oil and Natural Gas Corporation Limited v. Afcons Gunanusa JV, [Arbitration Petition (Civil) No. 05 of 2022].