A Scheme for Fixing Fees in Indian Ad Hoc Domestic Arbitrations

The fixation of fees in ad hoc domestic arbitrations has become a subject of conflicting opinions and judgments, that are advocating different perspectives and advancing corroborative arguments, for interpretation of the Schedule IV of the Arbitration and Conciliation Act 1996. The conundrum in interpreting and applying the Schedule stems from lack of clarity in the import of the wordings of the schedule. Confusions have arisen due to absence of certain specifications in the Schedule and disagreements in accepting a particular interpretation of the fee schedule. This short piece details conflicting interpretations in 3 circumstances along with varying arguments that have been made to justify and substantiate the adoption of one method of interpretation over the other. The three issues of conflict have been identified as follows - The first issue pertains to whether separate fees should be calculated for counter-claim, or, should fees be calculated for the value obtained upon clubbing the values of the claims and counter claims together or, should the fees be dependent, solely, on the value of the claim. The second point of conflict is, whether the fee ceiling is for the claim fee, paid in addition to the standard base fee or whether the fee ceiling is to apply to the cumulative sum of base and claim fees. The third issue is whether the fee stipulated in the Schedule is the fee to be given to the entire tribunal or each individual arbitrator in the tribunal. Further, this article analyzes the features of the Schedule, in light of the objectives with which it has been made, for identification of that interpretation and Schedule construction, which provides for an equitable and just method for fees determination