[ONGC arbitrator fee dispute] "Should we ask arbitrators to work without remuneration?" CJI NV Ramana

Chief Justice of India NV Ramana on Tuesday expressed the need for changes to the system of arbitration in India, specifically in the area of arbitrators' fees..The Court was hearing a matter concerning an arbitrator's fee dispute between Oil and Natural Gas Corporation (ONGC) and Afcons.The case is before a three member arbitral tribunal presided by Justice GN Ray and the co-arbitrators are Justices Gyan Sudha Mishra and Mukul Mudgal. .When the matter was taken up for hearing, CJI Ramana said,"We may have to close arbitration system in India!" Appearing for ONGC, Attorney General KK Venugopal agreed to this notion. The CJI then said,"So we should ask the arbitrators to work without remuneration? Okay we will ask them.".On the demands of the arbitrators in the ongoing arbitration, the AG said,"They want ₹80 lakh per arbitrators, then separate reading charges. There are three arbitrators. We want Fourth Schedule arbitration set up in the Act. There needs to be uniformity in this."He also pointed out that the issue was a contractual one, since the arbitrators' remuneration under the Fourth Schedule was agreed upon. However, they later differed on conference fees, reading fees, etc, the AG argued..At this point, Senior Advocate Dr Abhishek Manu Singhvi, representing Afcons, said that there is a clause in the contract which stated that no interest is payable by ONGC howsoever long the delay was."30 lakh is the cap in the Fourth Schedule. If it is 100 sittings, do you want arbitrators who are retired Supreme Court judges to appear for ₹30,000 per sitting? Please ask ONGC to say how much they are paying their lawyers, let us be very frank about this," he added..CJI Ramana then said that he would constitute a Bench to hear and resolve this issue. The Court proceeded to issue notice in the matter, and listed it for March 23. In the interim, there will be no stay on the arbitration proceedings. On a parting note, CJI Ramana told the AG,"At the time of appointing arbitrators itself, you had to say 'sorry we don't agree with the fees.' If you are not agreeable, then you would have said so."Dr. Singhvi was briefed by law firm Jaitley and Bakshi. .In a similar matter heard in December last year, CJI Ramana said that while PSUs with a lot of money like ONGC keep filing frivolous petitions, they raise issue over payment of arbitrator's fees."Public sector undertakings have so much money, they keep filing frivolous proceedings. Then you have issue in paying the arbitrators," the Court remarked while cautioning the PSU of contempt of court action..That matter, concerning the arbitration between ONGC and Schlumberger Asia Services, was listed pursuant to a letter written to the Court by one of the arbitrators, retired Bombay High Court judge Justice SC Dharmadhikari.The Supreme Court had on January 4, 2021 appointed former Chief Justice of the Calcutta High Court Justice Jai Narayan Patel and former Chief Justice of the Punjab and Haryana High Court, Justice Shivax Jal Vazifdar to the panel of arbitrators. They were then asked to select the third arbitrator.Justice Vazifdar had expressed his inability to take up the assignment and Justice Dharmadhikari replaced him. Justices Dharmadhikari and Patel then appointed Justice Anil Dave as the presiding arbitrator.However, Justice Dave recused when the fee dispute arose with ONGC. Subsequently, Justices Patel and Dharmadhikari also recused due to the same reason, after which the latter wrote to the top court..ONGC gets into fee dispute with retired judges arbitrating its dispute, Supreme Court warns of contempt

[ONGC arbitrator fee dispute] "Should we ask arbitrators to work without remuneration?" CJI NV Ramana

Debayan Roy

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