India: SC Rules That Arbitrators Cannot Unilaterally Fix Fee As It Violates Party Autonomy

The SC in Oil and Natural Gas Corporation Ltd NGC v. Afcons Gunanusa JV¹ has held that arbitrators do not have the power to unilaterally issue binding orders determining their own fees since this inter alia violates the principle of party autonomy. The Court clarified that the arbitral tribunal has the discretion to apportion the costs (including arbitrators' fees and expenses) between the parties and demand a deposit (advance on costs). If while fixing costs or deposits, the arbitral tribunal makes any finding relating to arbitrators' fees (in the absence of an agreement between the parties and arbitrators), it cannot be enforced in favour of the arbitrators.

Footnote

1. Oil and Natural Gas Corporation Ltd NGC v. Afcons Gunanusa JV, 2022 SCC OnLine SC 1122.

Originally published 30 September, 2022

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