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Separate court fee is required to be paid on the amount of counter claim except where the fees has been fixed by the Court: High Court of Delhi

Proviso to Section 38(1) of the Act carves out a specific exception providing for Arbitral Tribunal to fix a separate fee for claims and counter claims. Where the fees has been fixed by the Court in terms of 4th Schedule to the Arbitration and Conciliation Act, 1996, Sections 38(1) would have no application. The term “sum in dispute” provided in the 4th Schedule to the Act has to be interpreted so as to include the aggregate value of the claims as well as counter claims and the same was upheld by High Court of Delhi through the learned bench led by JUSTICE AMIT BANSAL in the case of JIVANLAL JOITARAM PATEL vs. NATIONAL HIGHWAYS AUTHORITY OF INDIA [FAO (OS)(COMM) 70/2017] on 08.03.2022.

The facts of the case that the parties to dispute agreed that claims of the respondent, and counter claims of the appellant would be adjudicated afresh, and that a sole Arbitrator may be appointed instead of a three-member Arbitral Tribunal, in order to save time and costs. At the hearing before the Arbitral Tribunal, the counsels were requested to address the Arbitral Tribunal on the issue whether counter claim(s) are to be included in the expression “sum in dispute” appearing in the 4th Schedule of the Arbitration and Conciliation Act, 1996, or the amount thereof is to be separately considered in terms of proviso to Section 38(1) of the Act.

The senior counsels contended that the Sum in dispute includes both claim and counter claim amounts. If the legislature intended to have the Arbitral Tribunal exceed the ceiling limit by charging separate fee for claim and counter claim amounts, it would have provided so in the Fourth Schedule.

The Court held that the Sections 31(8) and Section 31A would have no application where the fees of the arbitral tribunal has been fixed by agreement between the parties. Similarly, where the fees has been fixed by the Court in terms of 4th Schedule to the Act, as in the case at hand, Sections 38(1), 31(8) and Section 31A would have no application. The term “sum in dispute” provided in the 4th Schedule to the Act has to be interpreted so as to include the aggregate value of the claims as well as counter claims.

The Court observed, “Proviso to Section 38(1) of the Act carves out a specific exception providing for Arbitral Tribunal to fix a separate fee for claims and counter claims. Counter claim would mostly be founded upon an independent cause of action, and can continue even if the main suit fails, or is withdrawn. Separate court fee is required to be paid on the amount of counter claim. Even in terms of Rule 3 of Delhi International Arbitration Centre and Rule 30 of Indian Council of Arbitration’s Rules of Domestic and Commercial Arbitration and Conciliation, claims and counter claims are assessed separately for calculation of arbitral fee.”

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Judgment reviewed by – Shristi Suman

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